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JetBlue to use sustainable aviation fuel at New York-area airports

Highlights

Largest SAF deal for Northeastern US

New contract is for 670 million gallons over 10 years

JetBlue signed a new offtake agreement with SG Preston for sustainable aviation fuel, the latest announcement by an airline looking to cut its carbon footprint by increasing the use of cleaner, renewable fuel in lieu of traditional, hydrocarbon-based jet fuel.

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Aiming for a 2023 start, the 10-year contract calls for Philadelphia-based biofuel developer SG Preston to deliver at least 670 million gallons of blended SAF to JetBlue for use at the three New York-area airports: JFK; La Guardia; and Newark, the company said in a Sept. 29 statement.

"This marks the largest-ever announced near-term SAF deal for delivery in the Northeast and will be become the airline's largest single jet fuel contract," JetBlue's statement said.

The deal will also reduce JetBlue's CO2 emissions by about 1.5 million metric tons.

"We are well past the point of vague climate commitments and corporate strategies. Earlier this year, we set specific, dated, and aggressive emissions targets. And now we are physically changing the fuel in our aircraft to meet these commitments," said JetBlue CEO Robin Hayes.

"At JetBlue, we're heavily investing in SAF because we see it as our most promising means of rapidly and directly reducing aircraft emissions in the near-term. With this expanded agreement with SG Preston, nearly eight percent of JetBlue's total fuel use will be SAF, putting us well ahead of pace in reaching our goal of 10 percent SAF usage by 2030," Hayes added.

JetBlue will spend more than $1 billion for purchasing SAF over the term of the agreement, at a price competitive to traditional jet fuel, the company said.

SAF demand growth

JetBlue consumed 176 million gallons of fuel in the second quarter of 2021 at an average price of $1.91/gal, according to its second quarter results statement, slightly below the average price for jet in North America of $1.9877/gal for the quarter, according to the S&P Global Platts jet index.

So far in the third quarter, North American jet fuel prices have averaged $2.16379/gal, according to the index while prices for US West Coast SAF without any federal or local tax credits layered in are averaging $2.966/gal, according to Platts assessments.

Prices for SAF with the federal blenders' tax credit, California's Low Carbon Fuel Standard credits and credits from the Environment Protection Agency's Renewable Fuel Standard are averaging $7.385/gal so far in the third quarter of 2021. .

JetBlue's new contract for SAF supply on the US Atlantic Coast joins the airline's other contracts which are primarily based on the USWC.

JetBlue's previous SAF offtake agreement with SG Preston was signed in 2016 and began in 2019. This 10-year agreement is for 33 million gal/yr of SAF with no delivery point given.

On the USWC, JetBlue signed in July 2021 a 1.5 million gal/year supply contract with World Energy for SAF from the Altair Paramount facility in California to be delivered into Los Angeles Airport.

JetBlue also has a commercial offtake agreement with Neste signed in 2020. No volumes were given for the fuel which is to be delivered into San Francisco Airport.

Neste's commercial offtake agreements with US airlines include Delta, American Airlines and Alaska Air as well many European airlines. Neste is in the process of expanding its Singapore facility and expects to produce 515 million gallons of SAF per year by 2023, about 15 times more than it currently produces, a company spokesperson said.