U.S oil major Chevron Corp and renewable energy firm Gevo Inc will jointly invest in building and operating one or more facilities that would process corn to produce sustainable aviation fuel, the companies said.
The move comes in the midst of oil companies seeking to bulk up in the burgeoning renewable fuels space, as various sectors adapt to cut overall carbon emissions to combat global climate change.
The Biden administration in the United States is quietly discussing a target date of 2050 for weaning aircraft off fossil fuels as part of the White House’s broader push to fight climate change, Reuters reported last month citing sources.
In addition to co-investing with Gevo in one or more projects, Chevron would also have the right to offtake about 150 million gallons per year to market to customers, the companies said in their letter of intent, but did not disclose any financial details.
Both Chevron and Gevo did not immediately respond to an email seeking a comment on their investment plans.
Sustainable aviation fuel is made from feedstocks such as used cooking oil and animal fat and can be three or four times more expensive than making traditional jet fuel.
Chevron said on Tuesday it planned to produce a test batch of sustainable aviation fuel (SAF) and sell it to Delta Air Lines at the Los Angeles International Airport. (Reporting by Rithika Krishna in Bengaluru; Editing by Rashmi Aich)