Southwest signs 3.6m gallons SAF offtake deal with Valero

Southwest Airlines announced a major commitment to sustainable aviation fuel (SAF) with a new supply agreement for Chicago Midway International Airport (MDW) in a two-year deal with Valero Marketing and Supply Company.

“Today’s announcement marks a milestone in our efforts to utilise more SAF in our operation,” said Michael AuBuchon, managing director of fuel strategy and management, Southwest Airlines.

This is the largest SAF supply agreement ever announced in Illinois.

Under the agreement, Southwest will purchase a minimum of 3.6m gallons of neat SAF (equal to roughly 12m gallons when blended with conventional fuel) by the end of 2024. They have the option to increase this purchase to 25m gallons of neat SAF (around 84m gallons blended) over the duration of the contract.

This could represent up to 35% of the airline’s total jet fuel usage at MDW based on their previous year’s consumption.

The SAF used is expected to be produced by Diamond Green Diesel from sustainable sources like used cooking oil, animal tallow, and distiller’s corn oil. This fuel boasts a lifecycle greenhouse gas emission reduction of 74% to 84% compared to traditional jet fuel. Additionally, the SAF will be certified by a reputable Sustainability Certification Scheme, ensuring it meets Southwest’s strict environmental standards.

This initiative is applauded by Illinois Governor JB Pritzker, who championed a state-leading SAF tax credit last year. Senator Tammy Duckworth (D-IL) also voiced her support, emphasising the importance of increasing domestic SAF production. Commissioner Jamie L. Rhee of the Chicago Department of Aviation highlighted the agreement’s positive impact on the environment and the community.

The collaboration extends beyond Southwest and Valero. The Illinois SAF Purchase Credit and support from Southwest’s Corporate Customers in their Scope 3 SAF Program were instrumental in making this agreement possible. This deal allows Southwest to expand access to SAF for its corporate and cargo customers.