Airlines are pouring money and resources into the development of sustainable aviation fuels to offset the 3% of global emissions (and 3.5% of global warming) generated by commercial aviation. Berkeley, Calif.-based Twelve converts CO2 into a greener form of jet fuel. A $45 million debt package from Fundamental Renewables and Sumitomo Mitsui Banking Corp. will support construction of a “first of a kind,” or FOAK, fuel production plant in Moses Lake, Wash., Axios reported.
The funding will help the company, which spun out of the Lawrence Berkeley National Laboratory, begin producing its fuel next year. It counts Alaska Airlines as one of its early customers.
FOAK familiarity
As much as 40% of carbon emission reductions rely on technologies, like most sustainable aviation fuels, that are not yet commercially available. Investors are leery of investing in FOAK deployments.
Catalytic investors including Aegon Asset Management spinout Curvepoint Capital and Prime Coalition’s Trellis Climate are seizing the underinvested opportunity. Elemental Excelerator has adapted the simple agreement for equity, or SAFE, to spur project financing for climate tech startups’ pilot plants or first commercial facilities.
Family office syndicate CREO has published a framework to help investors get comfortable with FOAK climate tech deployments.
SAF race
A raft of startups is racing to get sustainable aviation fuels, or SAFs, into the commercial market. Chicago-based LanzaJet inked $30 million from Southwest Airlines in March to convert low-carbon ethanol into a SAF. Other players include United Airlines-backed OXCCU in the UK, Dimensional Energy in New York, and Lydian in Cambridge, Mass.
Last year, United Airlines raised $100 million from Air Canada, Boeing, GE Aerospace and other investors for a SAF fund.
The Inflation Reduction Act includes tax incentives for airlines to transition from kerosene-based jet fuel.
