Southwest Airlines enters sustainable aviation fuel deal with Valero
Oct 17 (Reuters) -Southwest Airlines LUV.N has entered into a deal with a unit of Valero Energy VLO.N for the supply of sustainable aviation fuel (SAF) to the Chicago Midway International Airport, the carrier said on Thursday.
The U.S. Energy Information Administration expects domestic production of biofuels to increase by about 50% in 2024, led by rising production of SAF, which can help decarbonize the aviation sector.
Under the two-year agreement, Illinois' largest SAF supply deal, Southwest will purchase a minimum of 3.6 million gallons of neat SAF for use in its operations as early as in the current quarter, the company said in a statement.
The carrier will also have the option to purchase up to 25 million gallons of neat SAF over the agreement's term.
Southwest said the neat SAF is expected to be produced from waste-based feedstocks, including used cooking oil, animal tallow, and distiller's corn oil.
Diamond Green Diesel, a joint venture between the unit of Valero and Darling Ingredients DAR.N, will supply the neat SAF, which will be blended with Valero's conventional jet fuel and delivered through existing fuel delivery infrastructure.
Reporting by Tanay Dhumal in Bengaluru; Editing by Shailesh Kuber
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