United Airlines and five of its corporate partners confirmed a venture capital fund launch to prioritize the development of sustainable aviation fuel-friendly startup firms and technology, CNBC reported.
“This fund is unique. It’s not about offsets or things that are just greenwashing. Instead, we’re creating a system that drives investment to build a new industry around sustainable aviation fuel (SAF), essentially from scratch,” United Airlines CEO Scott Kirby said in a release announcing the fund.
The United Airlines Ventures Sustainable Flight Fund will kick off with a $100 million fund invested by United Airlines, Air Canada, Boeing, GE Aerospace, JPMorgan Chase and Honeywell.
The news follows the aviation industry’s decision to transition away from greenhouse gas emissions and abide by more restrictive pollution standards.
Made with feedstocks that contain cooking oil and agricultural waste, SAF is deemed the best alternative to cut greenhouse gas emissions. The supply of SAF is currently limited, and costs double to four times more than jet fuel.
As aviation experts make an effort to increase SAF supply while reducing its cost, they face hardships, which include many airports’ lack of SAF supply availability and ability to afford it.
Last year, President Joe Biden signed the Inflation Reduction Act, which includes a blended fuels tax credit intended to further drive the transition to SAF.
“The United Airlines Ventures Sustainable Flight Fund will allow United and the other inaugural investors the chance to play a larger role in startups developing and expanding access to SAF. Partners in the fund will also be eligible for access to environmental attributes that will go with United’s supply of SAF,” a recent CNBC report states.
Since the beginning of his tenure as CEO of United in May 2020, Kirby has carried out investments prioritizing the development of SAF.
“Even as United faced substantial losses due to plunging passenger levels when the COVID pandemic devastated demand for travel, Kirby announced his airline would launch a fund to invest in future technologies and sustainability,” a recent press release states.
Since then, United Airlines Ventures has put forth the effort to invest in startups related to decarbonization and new fuel sources. Upon confirming the development of the United Airlines Ventures Sustainable Flight Fund, Kirby highlighted the importance of idea and technology innovation.
“That’s the only way we can decarbonize aviation,” he said.