United Airlines has taken a $30 million stake in a US-based alternative fuels developer as it seeks an option to regular jet fuel.
Fulcrum BioEnergy is described as a pioneer in the development and commercialisation of converting municipal solid waste into low-cost sustainable aviation bio-fuel.
Up to five projects to be jointly developed near United’s hubs as part of the deal are expected to have the potential to produce up to 180 million gallons of fuel a year.
The airline has also negotiated a long-term supply agreement with Fulcrum.
United will 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.
This alternative will be a ‘drop-in’ fuel that meets all of the airline’s technical requirements and specifications, and will power aircraft in the same way as conventional jet fuel, according to the carrier.
Fulcrum expects its first alternative fuels plant to begin commercial operation in 2017.
The agreement is claimed as the single largest investment by a US airline in alternative fuels and sets United apart in the aviation industry in the advancement of aviation biofuels and carbon emissions reductions.
United’s executive vice president and general counsel, Brett Hart, said: “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.
“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.”