United Airlines is teaming up with a corn ethanol maker in a bid to ramp up production of green jet fuel to deal with carbon credits and climate change.
United Airlines Holdings Inc., biofuels producer Green Plains Inc. and energy infrastructure firm Tallgrass Energy Partners LP are jointly investing up to $50 million to form Blue Blade Energy. The venture seeks to bring to market technology that would simplify making sustainable aviation fuel (SAF) from ethanol and other alcohol-based ingredients, also known as feedstocks.
United plans to buy as many as 2.7 billion gallons of the fuel, its biggest SAF agreement by volume, as the airline works to reach net zero emissions by 2050. The venture centers around the idea that ethanol will beat out other commodities, like vegetable oil, as a preferred ingredient for making green jet fuel.
“The trouble with SAF is the lack of feedstock,” United Airlines Ventures President Michael Leskinen said in an interview with Bloomberg. “Blue Blade has the potential to be very consequential in moving the needle in how much SAF is actually produced in the United States.”
The initial investment is for testing development. If that’s a success, then hundreds of millions in financing would be needed to build an initial production plant, according to Leskinen. The next step would be to build a test plant in 2024, followed by a facility that could start operating by 2028.
The offtake agreement could provide for enough SAF to fly more than 50,000 flights annually between United’s hub airports in Chicago and Denver.
EDITOR’S TAKE:
This would be a game changer for the ethanol industry and corn growers in particular. It is interesting from a historical perspective that ethanol was barely on the radar screen forty years ago. Today, it is responsible for approximately 1/3 of the total corn crop. The development and commercialization of SAF would require a huge bump in corn production. Once again, farmers would be in a prime position to cash in on a new, emerging market. This would put a great deal more money in their pockets to purchase those trucks you have in inventory. Be sure to utilize AgTruckTrader.com – the only website selling trucks aimed specifically at farmers and ranchers, who should be at the top of your customer prospect list these days!
