CN Expands Foray Into Sustainability Through Electric Locomotives, Renewable Diesel

Canadian railway CN is delving into two sustainability initiatives that seek to reduce greenhouse gas emissions from a locomotive's power sources.

First, CN (NYSE:CNI) and Wabtec (NYSE:WAB) announced Thursday that CN has purchased Wabtec's FLXdrive battery-electric locomotive. CN plans to partner with Wabtec to put into service the next-generation technology, which CN says can reduce fuel consumption and emissions by up to 30%.

The acquisition was awarded financial support via the marine and rail freight movers grant program established by Pennsylvania's Department of Environmental Protection.

"As part of our sustainability strategy to reduce freight transportation emissions through innovation, we plan to continue to lead the sector by deploying low and no-carbon technologies," CN President and CEO JJ Ruest said in a release. "At CN, we believe rail has a tremendous potential to reduce the environmental impact of transportation. As a mover of the economy, CN is committed to playing a key role in the transition to a low-carbon economy."

Meanwhile, CN announced Wednesday that it and Caterpillar (NYSE:CAT) subsidiary Progress Rail are partnering with Renewable Energy Group to test high-level renewable fuel blends, including both biodiesel and renewable diesel.

CN said these tests are an important step in reducing greenhouse gas emissions from CN's existing locomotive fleet while alternative propulsion locomotive technologies are being developed.

"This program will allow CN and Progress Rail to better understand the long-term durability and operational impacts of renewable fuels on locomotives, especially in cold weather and plan needed modifications to fully leverage their usage over the next decade," CN said.

Progress Rail is also testing renewable fuel blends with western U.S. Class I railroad Union Pacific (NYSE:UNP).

CN's partnerships with Wabtec, Progress Rail and Renewable Energy Group support CN's efforts to reduce scope 1 and 2 greenhouse gas emissions by 43% per million gross ton-miles by 2030 from a 2019 base year. CN established this target in April as part of the global Science-Based Target Initiative.

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