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Union Pacific issues $600 million in green bonds for investments that will reduce emissions

A Union Pacific merchandise train ascends California’s Cajon Pass on the Palmdale Cutoff in September 2021. (Bill Stephens)

OMAHA, Neb. – Union Pacific has issued $600 million in green bonds to support investments that will reduce the railroad’s carbon footprint, including battery electric locomotives.

The bond deal was finalized on Sept. 9, UP said on Monday.

Proceeds will be directed to the purchase of battery electric locomotives, locomotive modernizations, expansion of intermodal terminals, new and extended passing sidings, and the development of onsite and offsite solar and wind farms for the generation and distribution of renewable energy.

UP already has announced the purchase of 20 battery electric locomotives from Wabtec and Progress Rail that will be used to test the technology in yard service. The railroad also is in the midst of a 600-unit locomotive modernization program with Wabtec that will reduce emissions from the upgraded units.

UP says the intermodal terminal projects will help shift truck traffic to rail, which reduces overall carbon emissions by up to 75%. The longer sidings allow UP to increase train length and reduce dwell time.

The railroad said the bond offering underscores its commitment to reduce greenhouse gas emissions from locomotive operations 26% by 2030 compared to 2018 and net zero by 2050.

“When it comes to finding ways to decarbonize our footprint, every idea is on the table,” CEO Lance Fritz said in a statement. “We are acting now on our most promising avenues to make progress toward reducing greenhouse gas emissions and investing in technology to support future initiatives.”

Infrastructure and rolling stock for routes dedicated to the transportation of fossil fuels do not qualify for proceeds from the green bonds, UP said.