Sustainable aviation fuel effort launched by United Airlines

A venture capital fund is being established by United Airlines and five business partners with the goal of funding the development and expansion of the market for sustainable aviation fuel, or SAF.

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United Airlines, Air Canada, Boeing, GE Aerospace, JPMorgan Chase, and Honeywell will each contribute $100 million to the United Airlines Ventures Sustainable Flight Fund upon launch.

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In order to comply with stricter pollution requirements, the aviation industry is pushing to reduce greenhouse gas emissions at the same time as the announcement.

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"This fund is exceptional. It's not about offsets or other greenwashing tactics. Instead, we're building a structure that encourages investment to start an entirely new sector of the economy around sustainable aviation fuel," said Scott Kirby, CEO of United Airlines, in a statement introducing the fund. 

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The best alternative for the aviation sector to reduce greenhouse gas emissions is SAF, which is produced utilizing feedstocks including spent cooking oil and agricultural waste. The difficult part is figuring out how to expand SAF supply while decreasing cost.

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SAF is currently in short supply and costs two to four times as much as regular jet fuel. Airlines that want to reduce their greenhouse gas emissions must overcome two obstacles. Several airports lack a consistent, easy-to-find supply of SAF to fuel aircraft. And even then, the price is much more than utilizing jet fuel. As an incentive for the creation and application of SAF, the President Joe Biden-signed Inflation Reduction Act includes a mixed fuels tax credit.

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With the United Airlines Ventures Sustainable Flight Fund, United and the other first investors will have a greater opportunity to contribute to the growth and expansion of access to SAF for entrepreneurs. Access to the environmental features that come with United's supply of SAF will also be available to fund partners.

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Kirby has worked for the advancement of SAF since since he was appointed CEO of United Airlines in May 2020. When the Covid outbreak decimated travel demand, United was suffering significant losses as a result of falling passenger counts. Nonetheless, Kirby announced that his company would establish a fund to invest in emerging technology and sustainability.

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Since then, United Airlines Ventures has made investments in businesses that are centered on decarbonization and alternative fuels. In launching the United Airlines Ventures Sustainable Flight Fund, Kirby reaffirmed his conviction that in order to reduce emissions, new concepts and technologies must be created. He claimed that was the only way to decarbonize aviation.  

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Participating customers

Although retail investors are not permitted to engage in the United Airlines Ventures Sustainable Flight Fund, the airline is attempting to raise awareness of its environmental program by allowing some of its patrons to contribute in exchange for 500 United MileagePlus frequent flyer miles.

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The first 10,000 passengers who choose to donate $1, $3.50, or $7 to the fund will be eligible for the airline's offer. Also, United is included a new feature that informs users who are purchasing flights about the estimated carbon footprint of a certain flight on its website and mobile application. The estimate will be based on the kind of aircraft, duration of the flight, number of seats, and the number of people and cargo that will be traveling on a certain flight. 

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United warns that once a flight has taken place, the estimate may eventually differ from the actual carbon impact.

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How much of an influence might United passengers have on the airline's efforts to go green? According to United Airlines Ventures, $3.50 from each of the 152 million passengers who will use the airline in 2022 would be sufficient to develop and construct a SAF refinery that can produce up to 40 million gallons of SAF annually.