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Delta Air Lines pushes SAF goal forward with new off-take deal

US-headed biofuels- and biochemicals producer and process developer Gevo Inc. has announced that it has signed a “take-or-pay” agreement with Delta Air Lines, Inc. (Delta) to supply 75 million (US) gallons (≈ 283.9 million litres) of sustainable aviation fuel (SAF) per year for seven years.

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Gevo Inc. has signed a “take-or-pay” agreement with Delta Air Lines, Inc. (Delta) to supply 75 million (US) gallons (≈ 283.9 million litres) of sustainable aviation fuel (SAF) per year for seven years (photo courtesy Delta).

The Agreement replaces the existing agreement signed with Delta in 2019 to purchase 10 million gallons (≈ 37.8 million litres) per year and bolsters Delta’s commitment to incorporating SAF into its operations.

Based on current assumptions, including those around future pricing of commodities and the future values of certain environmental benefits, Gevo estimates that the Agreement should generate approximately US$2.8 billion of revenue, inclusive of the value from environmental benefits, for Gevo over the seven-year term of the Agreement.

On behalf of the entire team at Gevo, I want to congratulate our partners at Delta for their leadership in continuously pushing the aviation industry towards net-zero emissions. Delta makes for a great customer, recognizing that big change is needed. I also appreciate their faith in what we are doing at Gevo. Net-zero jet fuels matter. We expect production from our first Net-Zero plant to begin in 2025. To meet the demand that we now have under contract, we need to develop and build more than one Net-Zero plant. This is a happy problem to have, said Dr Patrick R. Gruber, CEO of Gevo.

The Agreement 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.

Right policies and incentives needed

Through the agreement, Delta expects to receive roughly 75 million gallons (≈ 283.9 million litres) of SAF annually for seven years, anticipated to start mid-2026.

SAF is a critically important lever we have available today to help our industry reduce the lifecycle carbon emissions from aviation fuel. That’s why we are working to develop the market and a broader understanding of the effectiveness of SAF, which can reduce lifecycle emissions up to 80 percent when used in pure form compared to fossil jet fuels said Kelly Nodzak, Delta’s Director of Global Jet Fuel Procurement.

Delta will need to secure 400 million gallons (≈ 1.51 billion litres) annually by the end of 2030 to meet its 10 percent SAF procurement commitment and approximately 4 billion gallons (≈ 15.14 billion litres) annually if it were to fly solely on SAF.

However, the market remains nascent due to limited supply and high costs. Today, there is only enough SAF available on the market to support one day of Delta’s operations at pre-pandemic levels.

In 2021, Delta purchased over 300 000 gallons (≈ 1.14 million litres) of SAF, collaborating with its corporate partners to help grow the underdeveloped SAF market.

But the industry needs this technology to grow and develop as, according to Delta, it is the “most meaningful solution” to reducing aviation’s carbon emissions.

SAF can leverage existing technology and infrastructure, such as fuel delivery pipelines, and work with current fleet models. SAF is blended with conventional jet fuel to reduce overall emissions while meeting Federal Aviation Administration (FAA) regulations.

With the right policies and incentives in place, we can unlock a future where sustainable aviation fuel is a viable climate solution that benefits air travel and beyond. SAF production creates good-paying jobs in manufacturing, improves the environmental quality for all, and fosters rural economic opportunity for feedstocks and pathways. It will help us protect the planet we share and the places we call home, said Amelia DeLuca, Delta’s VP of Sustainability.

Two Alcohol-to-Jet pathways

Gevo has remained focused on sustainability at every stage of production. Gevo has developed two alcohol-to-jet pathways that can utilize various low-carbon feedstocks grown using sustainable agriculture.

These feedstocks can then be converted, in some cases, to high-value nutritional products and energy-dense liquid hydrocarbons, including SAF.

Net-Zero Fuels are made by using low-carbon feedstocks produced with climate-smart agricultural practices and by eliminating fossil-based energy from the business system as much as possible. In addition, our customers depend on us to count carbon at every step of the process, said Dr Paul D. Bloom, Gevo’s Chief Carbon Officer, and Chief Innovation Officer.

Gevo’s production processes will incorporate renewable energy, including wind turbines, biogas, and combined heat and power CHP) systems to increase efficiency and reduce carbon intensity (CI) to net-zero levels, which the customer can then pass on through the fuel.

By accurately accounting for carbon emissions using the Argonne National Laboratories GREET model along with our Verity Tracking platform we will provide confidence to our customers like Delta that scientifically robust and transparent methods are used to meet and measure their sustainability goals. We want to create a win-win value proposition for every participant in the SAF supply chain by tracking all carbon intensity benefits in our SAF, ended Dr Paul D. Bloom.

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