Delta’s reworked aviation biofuel supply deal delays delivery to 2026

Source: By Kelly Yamanouchi, The Atlanta Journal-Constitution • Posted: Thursday, March 31, 2022

A member of a Delta ground crew prepares a jet for departure at Hartsfield-Jackson International Airport in this February file photo. HYOSUB SHIN / HSHIN@AJC.COM

Credit: HYOSUB SHIN / AJC

Sustainable aviation fuel remains in short supply

Delta Air Lines is aiming to reduce its carbon footprint, but a reworked agreement with biofuel maker Gevo pushes back by at least three years the start date for deliveries of sustainable aviation fuel.

Atlanta-based Delta struck a deal in 2019 to buy 10 million gallons of biofuels a year from Gevo, at the time saying it would be produced at a facility in Luverne, Minn. and be ready for use by Delta between 2022 and 2023.

That deal has been replaced with a new Delta-Gevo agreement that would push the date for the start of deliveries to mid-2026. Delta expects to get about 75 million gallons annually from Gevo in the new pact, up from 10 million gallons under the earlier agreement.

The Gevo deal is a big part of an effort by Delta to fuel 10% of its flights with sustainable aviation fuel by the end of 2030. But the delay is the latest example of the significant challenges to developing and supplying biofuels for airlines.

Right now, there’s only enough sustainable aviation fuel on the market to supply one day of Delta’s operations.

Englewood, Colo.-based Gevo had to shut down its Luverne biofuel facility early in the pandemic, as demand for fuel plummeted when millions of people stayed home and stopped commuting.

The Luverne facility didn’t reopen until August 2021, when Gevo said it would use production from the plant to test operations for a new facility planned for Lake Preston, South Dakota. Production from the new plant is now not expected to start until 2025.

The aviation industry is under pressure to decarbonize amid pushes for change by investors, corporate customers, government, passengers and society, according to consulting firm ICF and others.

Sustainable aviation fuel is “our best opportunity today for meaningful reductions in emissions from air travel,” said Delta chief sustainability officer Pam Fletcher in a written statement.

But Delta would need 400 million gallons of sustainable aviation fuel a year by the end of 2030 to meet its 10% goal, a heavy lift in a market that “remains nascent due to limited supply and high costs,” the airline acknowledges.

The airline last year partnered with other companies to buy 300,000 gallons of sustainable aviation fuel in a three-year deal with the idea of growing the market.

Delta also has agreements with other sustainable aviation fuel companies, including with Northwest Advanced Bio-fuels LLC to potentially get 60 million gallons a year starting in 2025, if a facility can be built to produce it, and with Aemetis for 250 million gallons of blended fuel over 10 years starting in 2024 from a plant under development.

And Delta is using an agreement with sustainable aviation fuel maker Neste for commitments with corporate customers to reduce emissions. Neste has been supplying San Francisco International Airport with sustainable aviation fuel, which is blended with fossil jet fuel before use.

Separately, Delta said it will work in an advisory capacity with Airbus, which is working to develop a hydrogen-powered aircraft.

 

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