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United's move to crack sustainable aviation fuel

Illustration of a pattern of airplanes.

Illustration: Brendan Lynch/Axios

United Airlines' sustainable fuel investing efforts are taking flight.

Why it matters: The carrier is focused on breaking open the sustainable aviation fuel market, which is crucial for airlines to meet net zero goals but is facing a major supply crunch.

Driving the news: United's Sustainable Flight Fund held its first limited partners meeting this week in Houston.

  • The fund is unique in that it's brought together a wide ecosystem of partners to back SAF tech.

By the numbers: The fund has closed over $200 million in commitments and has 21 LPs in addition to United.

  • "Aviation touches every sector ... which is why you have a lot of the other sector leaders joining us," said Andrew Chang, managing director of United Airlines Ventures.
  • Investors include Google, JPMorgan Chase, and Hawaiian Airlines.
  • The fund has backed at least 8 startups, including carbon-to-fuel company OXCCU, SAF producer Cemvita, and carbon capture firm Svante.

Zoom in: United has a goal to be net zero by 2050 without relying on traditional carbon offsets.

  • The airline says it's invested in future production of over 5 billion gallons of SAF.

Catch up quick: United launched United Airlines Ventures back in 2021, which invests off the balance sheet and focuses on themes like SAF, aerospace and technology.

  • The Sustainable Flight Fund was formed in February 2023 to drive a collaborative industry approach and to focus on SAF.
  • Last week Axios reported on two United Sustainable Flight Fund investments: ocean carbon removal company Banyu Carbon and geologic hydrogen startup Koloma.

The big picture: SAF is causing consternation across aviation.

  • It's seen as the major way that airlines will be able to meet their net zero targets. "Ninety-eight percent of our carbon emissions are derived from the consumption of jet fuel. All airlines have that statistic," says Chang.
  • But there's not enough of it being made from waste, which tends to have a lower carbon footprint. SAF makers are tapping feedstocks like used cooking oil and making as much as they can.
  • A handful of companies — like OXCCU, Air Company and Twelve — have emerged to make SAF "electrofuels" from carbon dioxide and green hydrogen. However, those efforts are in early days.

What's next: Over the next few years, electrofuel providers will be trying to scale up production of new facilities like Infinium's Project Roadrunner in West Texas.

  • United CEO Scott Kirby told Joann Muller last year that "where we are with SAF is where wind and solar were 20 or 25 years ago."
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