Written by Doyinsola Oladipo
NEW YORK (Reuters) – The sustainable fuel startup Air has multi-year agreements to sell carbon-reserved jet fuel to JetBlue Airways (NASDAQ:): Corp and Britain’s Virgin Atlantic, the two companies said on Thursday.
Financial terms were not disclosed.
Under the MoUs, the airline said in a statement confirmed by the carriers that JetBlue will purchase 25 million gallons of the airline’s sustainable aviation fuel between 2027 and 2032. Virgin Atlantic will buy up to 100 million gallons of SAF over 10 years.
The New York-based Air Company said it uses carbon dioxide from a variety of sources, such as ethanol plants, to make SAF.
The global aviation industry is under pressure to reduce carbon emissions and find ways to meet the 2050 net-zero emissions target set by the International Air Transport Association (IATA) in 2021.
“We are excited to be working with Air to reach our 10% target in SAF by 2030,” said Holly Boyd Poland, Vice President of Corporate Development at Virgin Atlantic.
The industry, which contributes about 2% of global carbon dioxide emissions, faces enormous challenges in reaching this goal as technologies such as electric and hydrogen-powered aircraft remain unproven.
Global airlines and airlines are betting on SAF, which is made with tiny amounts of feedstocks such as cooking oils and animal waste, and can cost two to five times more than conventional jet fuel.
Global investment is expected to increase annual production of SAF from more than 33 million gallons to more than 1.3 billion by 2025, according to the International Air Transport Association.
The Biden administration aims to increase SAF production to at least 3 billion gallons per year by 2030.