Southwest Inks 15-Year Agreement With Velocys For Sustainable Aviation Fuel

Southwest Airlines Co LUV announced a 15-year offtake agreement with Velocys Renewables LLC for 219 million gallons of sustainable aviation fuel (SAF). Financial terms were not disclosed.
Once blended with conventional jet fuel, the SAF could produce the equivalent of 575 million gallons of net-zero fuel and avoid 6.5 million metric tons of CO2 over the agreement term.
Southwest plans to purchase SAF from the Velocys Bayou Fuels facility in Natchez, Mississippi, as early as 2026.
Additionally, as part of the offtake agreement, Southwest and Velocys have established a long-term strategic relationship, offering Southwest the opportunity to purchase significant volumes of SAF from future Velocys facilities.
"This agreement is a major advancement in our environmental sustainability strategy, furthering our goal to replace 10 percent of our total jet fuel consumption with sustainable aviation fuel by 2030," said Michael AuBuchon, Senior Director Fuel Supply Chain Management at Southwest.
Price Action: LUV shares are trading lower by 0.73% at $50.54 in premarket on the last check Wednesday.