Union Pacific Corporation UNP has partnered with Wabtec Corporation WAB as it aims to reduce emissions by increasing the use of different types of renewable diesel and biofuel. The company aims to reduce 26% of its greenhouse gas emissions by 2030 before reaching its net-zero emissions goal by 2050.

As part of the partnership, UNP plans to start using a higher biodiesel blend in locomotives it acquired from Wabtec. The partnership will help the company increase the percentage of low-carbon fuel consumed to 10% of its total diesel consumption by 2025 and 20% by 2030.

Union Pacific's executive vice president – sustainability and strategy, Beth Whited, said, "Increasing the use of renewable diesels and biofuels currently represents the most promising avenue to help Union Pacific meets its environmental goals."

Union Pacific Corporation Price

Union Pacific Corporation price | Union Pacific Corporation Quote

During the second quarter, Union Pacific, carrying a Zacks Rank #2 (Buy), will start testing with B20 biodiesel and R55 renewable diesel in trains powered by Wabtec FDL engines operating in California. With time, higher percentages of biofuel are expected to be used in the testing.

Wabtec, carrying a Zacks Rank #3 (Hold), is a provider of locomotives, value-added, technology-based equipment, systems and services to the freight rail and passenger transit industries across the globe. The company’s locomotives have been previously approved for B5 R30 (5% biodiesel and 30% renewable diesel) for locomotive engines.

Wabtec's Fleet Innovation and Transformation division group vice president, Bob Bremmer, said, "Union Pacific has a comprehensive ESG initiative, which includes the exploration of alternative fuels and emerging technologies." Bremmer added, "Biodiesel and renewable diesel are important sustainable solutions for the rail industry both in the near-term and in the future."

Key Picks

Some top-ranked stocks within the broader Transportation sector are as follows:

Trinity Industries TRN sports a Zacks Rank #1 (Strong Buy). The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missing in one), the average beat being 60.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Trinity have gained more than 10% in the past six months.

USA Truck USAK carries a Zacks Rank #1. The company’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters (in-line in one), the average beat being 64.4%.

Shares of USA Truck have rallied more than 60% in the past six months.

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