Gevo Inc (NASDAQ:GEVO) said it has signed an agreement with Japan Airlines Co. Ltd (JAL) to sell it 5.3 million gallons of sustainable aviation fuel (SAF) per year for five years with deliveries expected to begin in 2027.
The Colorado-based company said the agreement falls under the memorandum of understanding it signed in March 2022 with the oneworld airline alliance, of which JAL is a member, to lay the groundwork for associated world-class airlines in the alliance to purchase up to 200 million gallons of SAF from Gevo.
The agreement with JAL will enhance Gevo’s global footprint for its sustainable fuel products, and also support Gevo’s efforts to pursue its stated goal of producing and commercializing a billion gallons of SAF by 2030, the company added.
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“Our sustainable aviation fuel is a drop-in fuel that delivers renewable energy where it’s needed,” said Dr Patrick R. Gruber, Gevo’s CEO, in a statement. “Our process is a model of efficiency, designed to allow the same acre of farmland to produce SAF from corn using atmospheric carbon while simultaneously adding high-value nutritional products to the food chain.”
Gevo noted that the airline industry has worked to reduce carbon dioxide emissions by cutting the quantity of fuel used, as well as acknowledging that in order to reduce emissions further, it will need to change the type of fuels too, which will see the use of SAF become more widespread towards 2030.
JAL and oneworld have the common ultimate goal of net-zero emission by 2050, with an intermediate target of replacing 10% of conventional jet fuel to SAF by 2030, Gevo said, adding that the company is a vital part of achieving that goal.
“JAL sees the value in reducing its dependence on fossil fuels while still being able to continue to use its existing aircraft,” noted Gruber. “Our agreement will empower the company to achieve carbon-emissions reductions now as it explores other technologies to manage its energy transition.”
The agreement with JAL is subject to certain conditions precedent, including Gevo developing, financing and constructing one or more production facilities to produce the SAF contemplated by the agreement.
Gevo’s mission is to transform renewable energy and carbon into energy-dense liquid hydrocarbons. These liquid hydrocarbons can be used for drop-in transportation fuels such as gasoline, jet fuel and diesel fuel, that when burned have the potential to yield net-zero greenhouse gas emissions when measured across the full life cycle of the products.
The company uses low-carbon renewable resource-based carbohydrates as raw materials and is in an advanced state of developing renewable electricity and renewable natural gas for use in production processes, resulting in low-carbon fuels with substantially reduced carbon intensity.
Contact the author at jon.hopkins@proactiveinvestors.com