Gevo SAF deal with American Airlines expected to bring in $2.75 billion

Gevo, Inc. revealed a new sales deal with American Airlines, Inc, the company announced.

Gevo will sell 100 million gallons of sustainable aviation fuel (SAF) to the airline annually for a period of five years.

According to the terms of this deal, Gevo is set to begin delivering the SAF in 2026. Over the course of five years, the arrangement should bring in about $2.75 billion in income, including the value of environmental benefits, Gevo predicts.

The agreement with American Airlines represents the single-largest gasoline sales contract Gevo has ever signed with a client, according to the press release.

Oneworld® Global Alliance (oneworld), of which American Airlines is a member, and Gevo signed a memorandum of understanding (MoU) earlier this year. The MoU set the path for the 14 top-tier airlines in the alliance to purchase 200 million gallons of SAF annually from the future commercial operations of Gevo. The addition of more airline partners through the agreement aids Gevo in achieving its stated objective of generating and commercializing 1 billion gallons of SAF by 2030.

Gevo recently announced an agreement with oneworld airline Aer Lingus, as we reported.

“The expansion of the global development of the SAF marketplace has reached an exciting point,” Gevo’s Chief Executive Officer Dr. Patrick R. Gruber stated.

oneworld revealed its plan for long-term sustainability for the industry by adopting a target of carbon neutrality by 2050 in September 2020, making it the first global airline alliance to do so. The alliance’s interim goal is having member airlines use SAF at a rate of 10% by 2030.

“Today’s announcement is a historic step forward for American and our industry as we work to reduce our carbon footprint,” American Vice President of Sustainability Jill Blickstein said.

“The use of SAF is a cornerstone of our strategy to decarbonize air travel. While this landmark investment represents meaningful action by American Airlines, driving progress at the scale and pace we need requires critical policy action in Washington and at the State level. Alongside our oneworld partners, we’re proud to lead the way in the shift to SAF and make progress toward our shared climate goals.”

A number of conditions must be met before the agreement with American Airlines may go into effect, including Gevo planning, funding, building, and running one or more production facilities to create the SAF that is intended under the agreement, the press releases concludes.

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