Southwest Airlines [LUV:US] has announced the foundation of Southwest Airlines Renewable Ventures (SARV), a new subsidiary to manage the airline’s sustainable aviation fuel (SAF) investments, as reported by ESG Today on March 8. The new subsidiary works to secure scalable SAF for achieving Southwest’s clean fuel target of replacing 10% of its total jet fuel consumption with SAF by 2030. Meanwhile, Southwest also announced a USD30m investment in SAF technology startup LanzaJet, which owns patented ethanol-to-SAF technology and the world’s first ethanol-to-SAF commercial plant. As part of the deal, LanzaJet plans to build an ethanol-to-SAF facility to produce SAF primarily for Southwest. The new facility will be able to produce SAF using cellulosic ethanol supplied by SAFFiRE Renewables, which had received equity investments from Southwest to convert corn stover into cellulosic ethanol.

Southwest Airlines aims to lower its carbon emissions intensity from 2019 levels by 25% by 2030 and 50% by 2035, ultimately reaching net-zero emissions by 2050. Under its sustainability strategy, high-quality andaffordable SAF plays a pivotal role in achieving these goals, as such fuel could reduce up to 80% of lifecycle carbon emissions compared to traditional jet fuels. The investments in LanzaJet’s ethanol-to-SAF technologyalign with Southwest’s efforts to scale up and diversify the production of SAF. In November 2023, the company also signed a two-decade agreement with USA BioEnergy LLC to procure as much as 680 million gallons of renewable jet fuel, capable of avoiding 30 million tons of carbon dioxide emissions once blended with conventional aviation fuel.

Sources:

https://www.esgtoday.com/southwest-airlines-launches-sustainable-aviation-fuel-venture-investment-business/

https://www.bloomberg.com/news/articles/2023-11-02/southwest-inks-20-year-jet-fuel-deal-with-hopes-of-going-green