Gevo Inc, the renewable fuels company, has announced a new fuel sales agreement with Aer Lingus, the Irish flag carrier that is owned by International Airlines Group (IAG).
Under the deal, Aer Lingus will purchase 6.3 million gallons per year of sustainable aviation fuel (SAF) for five years from Gevo's future commercial operations.
The airline has pledged to achieve net-zero carbon emissions by 2050 and has committed to powering 10% of its flights using SAF by 2030.
It expects to start fuelling its aircraft with SAF from Gevo in 2026. The expected value of the agreement is deemed to be $173 million, including the value from environmental benefits for Gevo.
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The Aer Lingus deal further increases Gevo's global impact by adding to its range of airline partners, which include oneworld alliance members Finnair and Japan Airlines.
"Gevo's sustainable aviation fuel delivers renewable energy to a transportation sector that is actively seeking to reduce its carbon intensity," said Dr Patrick R Gruber, Gevo's chief executive officer, in a statement.
"Because our fuel is fungible and drop-in ready, it's expected to have an immediate impact to help our partner airlines achieve their sustainability targets ahead of schedule."
Aer Lingus CEO Lynne Embleton added: "This agreement with Gevo marks an exciting and critical step on our journey to net-zero carbon emissions and underlines our commitment to powering 10% of flights using sustainable aviation fuel by 2030.
“The sustainable aviation fuel produced by Gevo will be used to power our flights from Los Angeles and San Francisco and, from 2026, 50% of fuel purchased by Aer Lingus from California will be sustainable aviation fuel."
Gevo said the agreement with Aer Lingus 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.
The company said it expects to continue to pursue its stated goal of producing and commercializing one billion gallons of SAF by 2030.
Gevo is a next-generation low-carbon fuel company focused on the development and commercialization of renewable alternatives to petroleum-based products.
Contact the author at jon.hopkins@proactiveinvestors.com