United Airlines’ investment in biofuels gets big boost this week

Source: By Lewis Lazar, The Business Journal • Posted: Friday, May 18, 2018

United Airlines has for several years trumpeted its belief in developing environmentally-friendly biofuels and its determination to be in the forefront of using biofuels to power its fleet of hundreds of jet aircraft.

Toward that end, the carrier was one of only two airlines (the other being Cathay Pacific) to become minority investors in Fulcrum BioEnergy.

On Wednesday, Fulcrum broke ground in Reno, Nevada on the first of several plants the company intends to build that will convert landfill and household garbage into renewable low-carbon fuel for jets.

That Reno plant is expected to come on line in early 2020. When fully operational, the it will covert approximately 175,000 tons of household garbage into more than 10.5 million gallons of biofuel each year.

When United announced its investment in Fulcrum in 2015, the carrier said the plan was for the biofuel company to construct future plants near some of United’s key hub airports.

Now sources are reporting that Chicago, where United has its largest hub at O’Hare International Airport, might be where Fulcrum comes to build out one of its first additional biofuel production facilities after Reno.

A United spokesman would not confirm Fulcrum’s game plan, but suggested an announcement about future Fulcrum plants could be forthcoming.

In the meantime, a United spokesman was only too pleased to talk up the financial and environmental advantages of biofuels and United’s investment in them as the airline industry once again confronts rising prices for traditional jet fuel: “This (biofuel) is going to help us hedge against the volatility of traditional fuel. You see now that fuel prices are increasing. We will know what we will pay for the fuel, and most importantly, it will help us reduce the impact on the environment.”

Fulcrum CEO Jim Macias also talked up biofuel’s environmental benefits compared to traditional fuel: “It is the same fuel but much cleaner. It is going to reduce carbon that is impacting greenhouse gases and climate change.”

According to the United spokesman, all United planes operating out of its Los Angeles hub now use a mix of traditional fuel and biofuel. As Fulcrum facilities come online, United’s use of biofuels is expected to increase accordingly.

United Airlines is a unit of United Continental Holdings (NYSE: UAL).