California legislation ‘levels the playing field’ for DME

Oberon Fuels, a producer of low-carbon dimethyl ether (DME) transportation fuel, is hailing the signing of California Assembly Bill 2663 into law.

The bill, which received bipartisan support and passed unanimously through the California State Legislature, effectively lowers the tax on DME when used as a diesel replacement or to blend with propane to the same rate as other alternative fuels – from 18 cents per gallon to 6 cents per gallon.

“AB 2663 levels the playing field for DME and removes a barrier to adoption for fleets seeking ways to reduce their carbon footprint,” says Rebecca Boudreaux, president and CEO of Oberon Fuels, in a press release.

DME is a clean-burning, non-toxic, renewable fuel that shares similar properties with propane.

Oberon Fuels says its renewable dimethyl ether (rDME) fuel is a cost-effective, low-carbon, zero-soot alternative to petroleum diesel that can help U.S. and global transportation sectors find pathways to zero-emission transportation.

Renewable DME is a cost-effective carrier for hydrogen, the company says, making it easy to deliver this renewable fuel for the growing hydrogen fuel-cell vehicle industry. In addition, when blended with propane, rDME can significantly reduce LPG’s carbon intensity.

Oberon Fuels is upgrading its plant in Brawley, California, from pilot to demonstration scale thanks in part to a $2.9 million grant last summer from the California Energy Commission. The company recently added nine full-time jobs to the Imperial Valley facility. The plant is expected to produce 1.6 million gallons of DME from more than 5,500 metric tons of waste material when operating at full capacity.

Oberon Fuels says the state funding helped it obtain additional private funding. In 2020, Oberon announced a strategic partnership with SHV Energy, as well as Suburban Propane’s acquisition of a 39 percent stake in the company.

Featured photo courtesy of Oberon Fuels