Companies also consider five future biofuel projects, negotiate long-term supply agreement.
Chicago-based United Airlines is investing $30 million in the U.S.-based alternative fuels developer Fulcrum BioEnergy, Inc., a developer and operater of facilities designed to convert municipal solid waste into fuels based in Pleasanton, California.
The airline claims it is the single largest investment by a U.S. airline in alternative fuels, and that it is the first U.S. airline to invest in a biofuel company.
In addition to the equity investment, United and Fulcrum have entered into an agreement that contemplates the joint development of up to five projects located near United’s hubs expected to have the potential to produce up to 180 million gallons of fuel per year.
"We know alternative fuels is an emerging industry that is vital to the future of aviation and this is just one of our initiatives to help make these fuels saleable and scalable,” says United’s Executive Vice President and General Counsel Brett Hart. “Investing in alternative fuels is not only good for the environment, it's a smart move for our company as biofuels have the potential to hedge against future oil price volatility and carbon regulations.”
United also has negotiated a long-term supply agreement with Fulcrum and reports the company may have the opportunity to purchase at least 90 million gallons of sustainable aviation fuel a year for a minimum of 10 years at a cost that is competitive with conventional jet fuel.
United reports that this alternative fuel will be a drop-in fuel that meets all of the airline’s technical requirements and specifications, and will power the aircraft in the same way as conventional jet fuel. Fulcrum expects its first alternative fuels plant to begin commercial operation in 2017.
Fulcrum's technology uses a thermochemical process to convert municipal solid waste (MSW), into renewable jet fuel. The company says its renewable jet fuel is expected to provide a greater than 80 percent reduction in lifecycle carbon emissions when compared to conventional jet fuel.
United says its agreement with Fulcrum is expected to decrease the airline’s carbon footprint through the use of sustainable aviation biofuel, while also diverting waste from landfills and creating new jobs in the communities where new Fulcrum facilities are sited. Fulcrum’s projects have also received support and participation from the U.S. Air Force and U.S. Navy for the future production of fuel that meets military specifications.
"This partnership underscores United's efforts to be a leader in alternative fuels as well as our efforts to lead commercial aviation as an environmentally responsible company," says United's managing director for environmental affairs and sustainability Angela Foster-Rice. "From our carbon offset program to our fuel saving winglet technology, this investment in Fulcrum represents yet another example of our Eco-Skies commitment to a more sustainable future."
"United Airlines just demonstrated why they are one of the leaders in commercial aviation," said E. James Macias, Fulcrum's president and chief executive officer. "United's investment and participation in our projects is a tremendous boost to our program. Their support, commitment and backing accelerate our schedule to bring large volumes of competitively-priced, sustainable fuels to United and the rest of the aviation industry."