United Airlines announces JV to develop sustainable fuel using ethanol

Jan 31 (Reuters) - United Airlines Holdings Inc (UAL.O) on Tuesday announced a new joint venture to develop and commercialize a sustainable aviation fuel (SAF) technology that will use ethanol as a feedstock.

The announcement comes at a time aircraft owners strive to curb emissions to become more environment friendly.

Blue Blade Energy, the JV formed by United Airlines, energy infrastructure company Tallgrass and biorefiner Green Plains Inc (GPRE.O), will see an investment of up to $50 million.

The JV will provide up to 135 million gallons of ethanol-based SAF annually, and up to 2.7 billion gallons in total under an offtake agreement, United Airlines said.

SAF, which uses feedstocks such as cooking oils to reduce emissions by up to 80% from conventional fuel, is seen as the carbon savior for the aviation sector, which accounts for nearly 3% of global carbon dioxide emissions.

The JV expects to proceed with the construction of a pilot plant in 2024, followed by a full-scale facility that could begin commercial operations by 2028, United Airlines said.

Reporting by Priyamvada C in Bengaluru; Editing by Shilpi Majumdar

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