(Bloomberg) — United Continental Holdings Inc., owner of
the world’s second-biggest airline, is making a $30 million
equity investment in Fulcrum BioEnergy Inc. to help develop fuel
from garbage for its jets.
The closely held U.S. biofuel producer will begin supplying
United as early as 2018, with deliveries increasing to 90
million gallons (340 million liters) annually by 2021, Chicago-based United said in a statement Tuesday. The target, enough for
about 20,000 flights, would be the equivalent of approximately 2
percent of the 3.9 billion gallons the carrier used last year.
Using fuel derived from plants and animal waste is one way
airlines can reduce the production of greenhouse gases that are
driving up global temperatures. A plan by the Environmental
Production Agency to cut aircraft emissions may not take effect
until 2018.
“What United has done is a big step forward, getting
involved in helping us accelerate the date that we’ll be
producing renewable, low-carbon fuel,” Fulcrum Chief Executive
Officer Jim Macias said in a telephone interview Tuesday. “This
will have a big impact on the industry and draw more into the
game.”
United didn’t disclose how big of a stake in Fulcrum it
received for its equity investment or whether it will get any
seats on the company’s board. Cathay Pacific Airways Ltd., a
Hong Kong-based carrier, made a similar strategic investment
last year. Macias declined to disclose how much capital
Pleasanton, California-based Fulcrum has raised since its 2007
founding.
Abengoa Deal
Fulcrum agreed on May 5 to pay Abengoa SA $200 million to
build its first commercial-scale plant near Reno, Nevada. That
will produce about 10 million gallons per year of synthetic
crude for jet fuel using solid waste as feedstock.
The company, which also operates a demonstration plant in
North Carolina, intends to build five factories with larger
output capabilities near five United hubs to expedite fuel
delivery.
“United was very aggressive in wanting to do something,”
Macias said. “It’s just a start, but it’s a good start.”
To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net
To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Carlos Caminada