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Southwest Air Boosts Bet on Corn Jet Fuel With LanzaJet Deal

Southwest Airlines Co. is teaming up with biofuels company LanzaJet Inc. as part of a launch of a renewable fuel arm, boosting the carrier’s effort to secure cleaner jet fuel made from corn crops and other materials.

Southwest Airlines Renewable Ventures will focus on finding affordable sustainable aviation fuel, or SAF. The portfolio includes a $30 million investment in LanzaJet, a sustainable fuels producer that last month unveiled the world’s first SAF commercial plant that will use ethanol as its ingredient.

Pressure for US airlines to cut greenhouse-gas emissions is rapidly increasing, including from the White House. That’s creating a flurry of alliances between aviation and agriculture. Biofuel producers are looking to expand into new markets and take advantage of government incentives for cleaner-burning fuel, while US farmers are hoping to gain from future demand for SAF, which can be made a variety of ways, including corn ethanol.

Carbon dioxide emissions from aviation, an industry difficult to electrify, are expected to surge by 94% from pre-pandemic levels, exceeding 2 gigatons by mid-century, according to BloombergNEF.

“We continue to march toward our goal of net zero by 2050,” Southwest Chief Executive Officer Bob Jordan said in a statement.

As part of the alliance, LanzaJet and Southwest will team up to build a SAF plant in the US. LanzaJet CEO Jimmy Samartzis said the goal is to use US ethanol, which currently is nearly all made from corn, as opposed to other types such as sugarcane-based ethanol out of Brazil and other regions.

“We are trying to send a clear signal to the market that there is a significant opportunity for US ethanol,” Samartzis said in an interview.

The potential of a lucrative ethanol-based SAF industry could be a major boon to US corn ethanol. The biofuel faces an existential threat from the growth of electric vehicles as consumption of liquid motor fuel declines. Yet for US corn ethanol to widely qualify as an ingredient for SAF, producers and farmers must do more to slash emissions or risk being eclipsed by more sustainable crops from Brazil and other key areas.

LanzaJet expects the plant to be built over three to four years in a location to be determined. The company didn’t disclose the estimated cost of construction or production capacity except to say it would be a large-scale operation.

LanzaJet overall aims to use its technology to produce 1 billion gallons of SAF annually by 2030. If realized, this would represent a third of President Joe Biden’s goal for the US to make at least 3 billion gallons a year and reduce aviation emissions by 20% by 2030.

Southwest and LanzaJet also pledged to work together to advance the work of Saffire Renewables LLC, in which Southwest is invested. Saffire, funded in part by the US government, seeks to produce SAF from ethanol made from corn residue.


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