JetBlue, seeking to get ahead of looming restrictions on airliners’ greenhouse gas pollution, has agreed to buy more than 330 million gallons of renewable fuel over 10 years, the company said this week.
It is one of the largest such purchase agreements yet.
Under the agreement with bioenergy company SG Preston, JetBlue would cover about 20 per cent of its annual fuel use at Kennedy International Airport in New York, its home base, with a biofuel blend. That is equivalent to 4 per cent of the fuel used throughout its network, the airline said.
“It’s thinking long term about our biggest cost, but its primary motivation is to reduce our greenhouse gases,” said Sophia Mendelsohn, JetBlue’s head of sustainability. “What we really want to do is jump-start the industry and quite frankly enable all airlines, very much ourselves included, to diversify our fuel supply.”
Slow adoption of new fuels
Airlines represent potentially easy-to-serve customers for biofuels, given their voracious energy needs. But with heavy pressure on the companies’ bottom lines, the advent of more efficient planes and a period of low oil prices, the airlines - with a few exceptions - have been slow to adopt the novel and more expensive fuels.
“At the end of the day, the vibe that we’ve heard from the industry is, ‘We’ll use it once it’s cost-competitive, we’ll use it once there’s enough volume,'” said Yuan-Sheng Yu, who leads alternative fuels research at Lux Research. “This is not an industry with the amounts of cash on hand to invest in these emerging, nonproven technologies.”
A long-term customer agreement like JetBlue’s, energy experts say, is an important step for a developer to attract financing to build a new facility - much as energy-purchase agreements by companies like Amazon, Apple and Google have allowed for the construction of solar or wind farms to help meet their electricity needs.
“Brands like JetBlue have recognised that sustainability and the environment need to be part of the overall brand story,” said Randy Delbert LeTang, chief executive of SG Preston, which is based in Philadelphia. “JetBlue and contracts like JetBlue’s offer us a completion to our overall credit profile for building these facilities.”
