FedEx agrees to buy renewable jet fuel

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, July 22, 2015

A FedEx Corp. subsidiary has agreed to purchase 3 million gallons of renewable jet fuel a year from Red Rock Biofuels LLC, a company supported by a multi-agency federal biofuels initiative.

The contract between FedEx Express and Red Rock will run through 2024. It calls for the first delivery of fuel in 2017.

Red Rock last September received $70 million from the Departments of Agriculture, Energy and the Navy through the Defense Production Act biofuels initiative. It was one of three companies receiving grants to construct biofuels facilities (Greenwire, Sept. 19, 2014).

Shortly after the grant announcement, Red Rock inked a deal with Southwest Airlines Co. to sell 3 million gallons of jet fuel annually beginning in 2016 (Greenwire, Sept. 25, 2014).

Red Rock is aiming to convert wood waste into renewable jet fuel at its planned 15-million-gallon refinery. The company uses technology that converts wood waste into a synthetic gas by heating it in the absence of oxygen. The mixture of hydrogen and carbon is refined through the use of a catalyst to produce clear synthetic crude that can be used in jet fuel, diesel and naphtha.

Red Rock CEO and co-founder Terry Kulesa said the company will sell its total jet fuel capacity at the plant through the deals with FedEx and Southwest.

“We are building a suite of powerful, global customers that continue to commit to the future of alternative fuels in a market where oil prices are low, providing true validation of our business model and mission,” he said in a statement.

The refinery is expected to cost about $200 million. In March, Red Rock announced that it had also received private funding from Flagship Ventures, a venture firm that finances new technologies.