JetBlue signs with SG Preston in one of the largest ever airline renewable jet fuel offtake agreements
Tue 20 Sept 2016 – JetBlue has signed a 10-year binding deal with bioenergy company SG Preston in what it describes as one of the airline industry’s largest ever renewable jet fuel offtake agreements. The carrier plans to purchase more than 33 million gallons of blended jet fuel per year over the period. The blend is to be made up of 30% HEFA-derived renewable fuel produced from sustainable non-food plant oils that is targeted to achieve a 50% or higher reduction in greenhouse gas emissions on a per gallon life-cycle basis compared to the fossil equivalent. JetBlue is looking to supply the fuel to New York metropolitan area airports from 2019 and the amount purchased is equal to around 20% of the airline’s annual fuel consumption at New York JFK International. This is a first entry into the aviation market for Philadelphia-based SG Preston, which has ambitions for five 120 million gallon per year renewable jet and diesel facilities in the US and Canada.
“The future of aviation relies in part on renewable energy sources. We’re taking a leadership role in technology and other advancements including renewable jet fuel,” said JetBlue CEO Robin Hayes. “JetBlue is preparing for a world where we must reduce our production of greenhouse gases. With this in mind, we have executed one of the largest renewable jet fuel purchase agreements. This is just one step of many in our work towards a lower carbon future.”
The HEFA (hydro-processed esters and fatty acids) fuel is expected to meet the Environmental Protection Agency’s (EPA) qualification for renewable fuel standards, as well as the Roundtable on Sustainable Biomaterials (RSB) certification standard for sustainable production of biofuels. In June, JetBlue became the first US airline to join the RSB (see article). The HEFA-SPK fuel to be produced by SG Preston was approved by fuel standards body ASTM International for commercial airline use in 2011 and to date has been used to power more than 2,200 revenue flights by 22 airlines.
In 2015, JetBlue signed a White House climate pledge to reduce emissions from commercial air travel and last year began actively exploring the potential to purchase renewable jet fuel. The deal with SG Preston is the largest long-term binding commitment by any airline for HEFA-based jet fuel, it claimed.
“This is the first of many steps towards a slowly evolving change,” said Hayes. “With our partner, SG Preston, we are pursuing renewable jet fuel production from feedstock systems with the ability to lower CO2 emissions by 50% or more per gallon before blending. This is a proactive step to address customer demand and protect our business and the future of our industry.”
Founded in 2012, SG Preston says it is not a technology company but instead relies on licensing technologies proven at commercial scale “and backed by significant balance sheet guarantees.”
It announced in October 2015 the signing of a multi-facility programme with a Houston-based engineering, procurement and construction subsidiary of IHI Corporation for series of commercial volume, advanced biofuels manufacturing plants, initially in the US Midwest and Canada.
“The plants will use proven, commercial-scale technologies for the production of renewable diesel and jet fuel targeting US and global industries seeking a volume-based, competitively-priced solution to their environmental sustainability mandates,” said the company, which is looking at building five plants initially, each producing 120 million gallons of renewable fuel per year. It added it would provide “immediate partnering solutions to the global aviation industry, with targeted, competitive value-added market offerings.”
Commenting on the JetBlue agreement, SG Preston founder and CEO Randy Delbert LeTang said: “This strategic relationship with JetBlue is a continuation of our commitment to develop reliable products from renewable resources at commercial scale and volume for stakeholders who recognise renewable fuel has transcended buzzword status and is a critical component of responsible growth. Our strategy is to address demand versus supply gaps in the industry and align development and delivery mechanisms to meet our customers’ demand in the least disruptive way.”
The offtake agreement was welcomed by the wider aviation sector. “JetBlue is joining a group of industry-leading airlines which are taking the bold, but smart choice to put themselves at the forefront of our sector’s climate action. They should be warmly congratulated for making that choice,” said Michael Gill, Executive Director of the cross-industry Air Transport Action Group.
“Following eight years of exhausting testing and certification processes, in February this year Oslo Airport became the first to supply airlines with alternative fuels for regular daily flights. Los Angeles soon followed and today’s news will ensure that JFK and other New York airports also come on stream from 2019. The industry anticipates further similar announcements in the near future.
“The airlines that have signed substantial offtake agreements on alternative fuels are helping the whole industry by kick-starting this move to renewable energy.”
Added Nancy Young, VP Environmental Affairs for trade group Airlines for America (A4A): “With this announcement, US airlines continue to lead the way to a more secure and environmentally friendly future. Sustainable alternative aviation fuels help our members build on their already strong environmental record and help reduce price volatility and enhance energy security by providing a competitor for petroleum-based jet fuel.”
Other A4A airline members in the US that have purchase agreements in place for alternative fuels include United, FedEx, Southwest and Alaska, with United already receiving supply for aircraft operations at Los Angeles International.
