Gevo and Future Energy Global (FEG) signed an offtake agreement for carbon abatement attributes, to enable airlines and other companies to reduce their NO₂ emissions through Sustainable Aviation Fuel (SAF). Under the multi-year agreement, FEG will acquire from Gevo the Scope 1 and Scope 3 emissions credits from 10 million gallons per year of fuel to be produced at Gevo’s alcohol-to-jet (ATJ) SAF production facility, Gevo ATJ-60, to meet demand from FEG customers, both airlines and corporates, seeking to decarbonize their operations.

The agreement also includes an option for FEG to increase the off-take at a later date.

This agreement is expected to enable Gevo’s financing of the construction of its ATJ-60 facility. Gevo has secured a loan guarantee conditional commitment of $1.63 billion (including capitalized interest during construction) from the US Department of Energy (DOE) Loan Programs Office (LPO) and is originating equity from project level capital providers.

Under development in Lake Preston, South Dakota, ATJ-60 is designed to address the market need for cost-effective jet fuel while abating carbon and to respond to growing worldwide demand for SAF. Gevo’s proprietary plant design is expected to be able to produce 60 million gallons of SAF per year at similar production costs to conventional jet fuel, but with far lower carbon emissions.

The aviation industry has targeted net-zero CO₂ emissions by 2050, and SAF is expected to contribute around two-thirds of the necessary emissions reduction, but to achieve this, its production quantities need to scale more than 400-fold.

SAF is not yet available at all major airports worldwide so FEG provides SAF-derived Scope 1 credits to airlines which wish to buy additional SAF but which cannot easily source the physical fuel at their own airports. Similarly, when companies purchase and retire SAF-derived Scope 3 credits to compensate for their business travel emissions, they mitigate the added cost of SAF to airlines and thus enable the faster scale-up of SAF production.

The Greenhouse Gas Protocol defines different “scopes” of responsibility for emissions. The emissions from a flight fall under an airline’s direct responsibility (i.e., Scope 1), but a company with staff flying for business on that flight is responsible for its staff’s share of the flight’s emissions (i.e., Scope 3 or indirect emissions).

Separating the Scope 1 and Scope 3 attributes from the physical fuel, an approach known as “Book and Claim,” reduces fuel transportation and storage costs and carbon emissions, and unlocks a global SAF market both for airlines and for indirect aviation fuel customers around the world who are seeking to mitigate their emissions.

FEG’s business model brings together investors, suppliers, and buyers to help accelerate and scale SAF production globally. FEG generates additional revenue streams by commercializing the carbon credits which SAF provides, enhancing the business case for faster production scale-up. FEG’s offtake agreement with Gevo is expected to fulfill a market need by giving buyers access to SAF credits at predictable prices, while providing financial commitments and revenue certainty that are expected to allow suppliers like Gevo to expand. FEG’s initial focus has been on aviation, though its sustainable-fuel credit solutions span the transport spectrum, including marine and land transport.