Southwest Airlines signs SAF supply deal with USA BioEnergy

Dallas, Texas-based Southwest Airlines Co (NYSE:LUV) has sealed a long-term deal to buy sustainable aviation fuel (SAF) from a new biorefinery being built by USA BioEnergy LLC near Bon Wier, Texas.

The 20-year agreement concerns up to 680 million gallons (2.57 million litres) of neat SAF. The contracted amount will be enough to produce the equivalent of 2.59 billion gallons of net-zero fuel when blended with conventional jet fuel, according to a statement. First deliveries from the site in Texas to Southwest Airlines are expected as early as 2028.

In addition, the signed deal also gives Southwest an option to buy an additional amount of 180 million gallons of SAF annually from future planned production facilities.

"This offtake agreement with USA BioEnergy marks important progress in the development of our SAF portfolio and furthers our goal to replace 10 percent of our total jet fuel consumption with SAF by 2030," said Michael AuBuchon, managing director of fuel strategy and management at Southwest Airlines.

USA BioEnergy’s Bon Wier facility is expected to convert one million tons of wood waste into 34 million gallons of clean transportation fuel annually, including SAF, renewable diesel and renewable naphtha. The project is expected to be completed in late 2025.

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