United invests in new ethanol sustainable aviation fuel venture

2 Feb 2023 by Tom Otley

United Airlines, Tallgrass, and Green Plains Inc have announced a new joint venture – Blue Blade Energy – to develop and then commercialise Sustainable Aviation Fuel (SAF) technology that uses ethanol as its feedstock. The partners will invest up to a combined $50 million in the joint venture to develop the technology. If it is successful, Blue Blade is expected to proceed with the construction of a pilot facility in 2024, followed by a full-scale facility that could begin commercial operations by 2028.

United has entered into an offtake agreement with the joint venture for up to 135 million gallons of ethanol based SAF annually and up to 2.7 billion gallons in total. The airlines says that this could provide for enough SAF to fly more than 50,000 flights annually between United’s hub airports in Chicago and Denver (assuming that current regulations requiring SAF to be blended with conventional jet fuel are removed to allow for the use of unblended SAF.)

United-Airlines SAF

Tallgrass is an energy infrastructure company, majority owned by an investor group led by Blackstone Infrastructure Partners. Green Plains a biorefining company focused on the development and utilization of fermentation, agricultural and biological technologies in the processing of annually renewable crops into sustainable value-added ingredients.

Blue Blade’s new SAF technology was developed by researchers at the U.S. Department of Energy’s Pacific Northwest National Laboratory (PNNL).

What is SAF?

“The production and use of SAF is the most effective and scalable tool the airline industry has to reduce carbon emissions and United continues to lead the way,” said United Airlines Ventures President Michael Leskinen. “This new joint venture includes two expert collaborators that have the experience to construct and operate large-scale infrastructure, as well as the feedstock supply necessary for success. Once operational, Blue Blade Energy has the potential to create United’s largest source of SAF providing up to 135 million gallons of fuel annually.”

The arrangement between the joint venture partners means that

  • Tallgrass will manage research and development of the technology, including pilot plant development, and will manage the construction of the production facility.
  • Green Plains will supply the low-carbon ethanol feedstock, and use its ethanol industry expertise to manage operations once the pilot facility is constructed.
  • United Airlines will assist with SAF development, fuel certification and into-wing logistics, and has also agreed to purchase up to 2.7 billion gallons of SAF produced from the joint venture.

If the technology is commercialized, the location of Blue Blade’s initial plant would allow easy access to low-carbon feedstock from Green Plains’ Midwest ethanol production facilities. While the initial SAF facility intends to use ethanol, the technology has the capability to work with any alcohol-based feedstock as its fuel source.

Blue Blade Energy is a direct investment by United Airlines Ventures (UAV), United’s corporate venture arm. UAV launched in 2021 and targets startups, upcoming technologies, and sustainability concepts that will complement United’s goal of net zero emissions by 2050 without relying on traditional carbon offsets. Investments have included SAF producers, carbon capture, hydrogen-electric engines, electric regional aircraft and air taxis.

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