DALLAS – Gevo announced this week that it will now sell sustainable aviation fuel (SAF) to American Airlines (AA). In accordance with the conditions of the deal, Gevo will sell 100 million gallons of SAF annually for a period of five years.
Under the terms of this contract, Gevo will start delivering SAF in 2026. Gevo predicts that over the course of five years, the arrangement should bring in about US$2.75bn in income, including the value of environmental benefits. The agreement with AA represents the single, largest fuel sales contract Gevo has ever signed with a client.
The airline is a member of the oneworld Global Alliance, with whom Gevo signed a memorandum of understanding (MoU) earlier in 2022. This SAF deal is covered by the MoU, which paves the way for the 14 top-tier airlines in the alliance to buy 200 million gallons of SAF annually from Gevo’s future commercial operations.
The addition of more committed airline partners through this SAF purchase agreement is conducive to Gevo’s objective of generating and commercializing one billion gallons of SAF by 2030.
Oneworld announced its commitment to long-term sustainability for the industry by announcing a target of carbon neutrality by 2050 in September 2020, making it the first global airline alliance to do so. After making that pledge, the alliance set an interim objective of having member airlines employ SAF at a rate of 10% by 2030.
Comments from Gevo, American Airlines
“The expansion of the global development of the SAF marketplace has reached an exciting point,” said Dr. Patrick R. Gruber, Gevo’s Chief Executive Officer.
“While there is a tremendous amount of work to complete to bring all the critical elements of net-zero carbon SAF to the marketplace, our memoranda of understanding with oneworld alliance members and this subsequent commitment from American Airlines demonstrates the important momentum that is building for these types of products. I’m thrilled that Gevo is poised to continue to provide leadership for this product development.”
“Today’s announcement is a historic step forward for American and our industry as we work to reduce our carbon footprint,” said Jill Blickstein, AA’s Vice President of Sustainability.
“The use of SAF is a cornerstone of our strategy to decarbonize air travel. While this landmark investment represents meaningful action by American Airlines, driving progress at the scale and pace we need requires critical policy action in Washington and at the State level. Alongside our oneworld partners, we’re proud to lead the way in the shift to SAF and make progress toward our shared climate goals.”
American Airlines’ Push for Zero Emission Operations
During the Farnborough International Airshow, zero emissions aircraft manufacturer Vertical Aerospace secured delivery slots and pre-delivery payments from AA.
In its initial conditional pre-order of up to 250 aircraft, with an option for a further 100, announced in June 2021, AA set aside delivery slots for the first 50 VX4 aircraft. With the new agreement, the parties will expand on their current joint working group to study the future of advanced air mobility and get ready for the VX4’s eVTOL introduction into service.
The agreement to make pre-delivery payments and confirm slot reservations for the first Vertical 50 aircraft is the first of its kind for a major airline in the eVTOL sector, and it represents a key turning point in their collaboration.
N834AA American Airlines Boeing 787-9. Photo: Tony Bordelais/Airways