Valero Supplying Southwest Airlines with Sustainable Aviation Fuel in 2-Year Supply Deal
Southwest Airlines has signed a two-year sustainable aviation fuel (SAF) supply agreement with Valero Marketing and Supply Company (Valero), a subsidiary of Valero Energy Corporation, to bring SAF to Chicago Midway International Airport (MDW).
As part of the agreement, Southwest will purchase a minimum of 3.6 million gallons of neat SAF (about 12 million gallons blended) for use in its operations as early as this year’s fourth quarter, with the option to purchase up to 25 million gallons of neat SAF (about 84 million gallons blended) over the agreement's term.
On a blended basis, this represents up to 35 percent of Southwest's jet fuel out of MDW based on the carrier's usage in 2023.
"As one of the world's busiest aviation systems, it is critical that Chicago's airports work together with our airline partners to promote a cleaner, greener future for aviation," Commissioner Jamie L. Rhee of the Chicago Department of Aviation (CDA), which owns and operates both O'Hare and Midway international airports, said in a statement. "We are thrilled that Southwest Airlines has chosen Midway International Airport to advance its commitment to sustainability through the use of SAF, and we applaud their leadership team for embracing innovative solutions that will benefit our community, travelers, and the planet for generations to come."
The neat SAF is anticipated to be produced from waste-based feedstocks, including used cooking oil, animal tallow, and distiller's corn oil, with a lifecycle greenhouse gas emission reduction ranging from approximately 74 percent to 84 percent as compared to conventional jet fuel.
Moreover, the SAF is expected to be certified by a CORSIA-approved Sustainability Certification Scheme (SCS) at the batch level, providing third-party verification about the SAF meeting or exceeding all the requirements of Southwest's SAF policy.
Diamond Green Diesel, a joint venture between an affiliate of Valero and food and agricultural product recycler Darling Ingredients, will supply the neat SAF, which will be blended with Valero's conventional jet fuel and delivered through existing fuel delivery infrastructure, including Explorer Pipeline and West Shore's Chicagoland pipeline network.
The agreement was achieved with the help of the Illinois Sustainable Aviation Fuel Purchase Credit and support from the Southwest corporate customers in Southwest's Scope 3 SAF program. Southwest can increase access for corporate and cargo customers with the SAF volume and support its use in the carrier's operations.
Earlier this year, Southwest Airlines acquired SAF project SAFFire Renewables to boost its biofuel production capabilities. SAFFiRE will utilize technology developed by the U.S. Department of Energy's National Renewable Energy Laboratory to convert corn stover into renewable ethanol.
