Delta Air Lines inks SAF agreement with Gevo
Gevo has signed a “take-or-pay” agreement with Delta Air Lines, to supply 75 MMg of sustainable aviation fuel (SAF) per year for seven years. Based on current assumptions, including those around future pricing of commodities and the future values of certain environmental benefits, Gevo estimates that the agreement should generate approximately $2.8 B of revenue, inclusive of the value from environmental benefits, for Gevo over the seven-year term of the Agreement.
The agreement replaces the existing agreement signed with Delta in 2019 to purchase 10 MMgpy and bolsters Delta’s commitment to incorporating SAF into its operations.
“On behalf of the entire team at Gevo, I want to congratulate our partners at Delta for their leadership in continuously pushing the aviation industry towards net-zero emissions. Delta makes for a great customer, recognizing that big change is needed. I also appreciate their faith in what we are doing at Gevo. Net-zero jet fuels matter. We expect production from our first Net-Zero plant to begin in 2025. To meet the demand that we now have under contract, we need to develop and build more than one Net-Zero plant. This is a happy problem to have,” said Patrick R. Gruber, Ph.D., Gevo’s Chief Executive Officer.
“Net-Zero Fuels are made by using low-carbon feedstocks produced with climate-smart agricultural practices and by eliminating fossil-based energy from the business system as much as possible. In addition, our customers depend on us to count carbon at every step of the process,” said Paul D. Bloom, Ph.D., Gevo’s Chief Carbon Officer, and Chief Innovation Officer. Dr. Bloom. “By accurately accounting for carbon emissions using Argonne National Laboratories GREET model along with our Verity Tracking platform we will provide confidence to our customers like Delta that scientifically robust and transparent methods are used to meet and measure their sustainability goals. We want to create a win-win value proposition for every participant in the SAF supply chain by tracking all carbon intensity benefits in our SAF.”
“SAF is a critically important lever we have available today to help our industry reduce the lifecycle carbon emissions from aviation fuel,” said Kelly Nodzak, Delta’s Director of Global Jet Fuel Procurement. “That’s why we are working to develop the market and a broader understanding of the effectiveness of SAF, which can reduce lifecycle emissions up to 80% when used in pure form compared to fossil jet fuels.”
The agreement is subject to certain conditions precedent, including Gevo developing, financing and constructing one or more production facilities to produce the SAF contemplated by the agreement. A copy of the agreement between Delta and Gevo has been filed with the U.S. Securities and Exchange Commission on Form 8-K.
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