17-10-2024

Valero to supply sustainable aviation fuel to Southwest Airlines

Southwest Airlines Co, today announced a sustainable aviation fuel supply agreement with Valero Marketing and Supply Company, a subsidiary of Valero Energy Corporation, to bring SAF to Chicago Midway International Airport in the state’s largest announced SAF supply agreement.

As part of the two-year 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 Q4 2024, 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 would represent up to 35% of Southwest’s jet fuel out of MDW based on the carrier’s usage in the last year.

“Since day one as Governor, I’ve committed to making Illinois a national leader in sustainability and clean energy, which is why I was proud to support a nation-leading SAF tax credit last year that we’ve already seen make an impact on adoption rates in Illinois,” said Governor JB Pritzker. “Our airports are some of the largest and most connected in the country and I’m thrilled that Southwest and Midway International Airport are partnering to expand sustainable fuel use in their flights, an essential step toward a clean energy future.”

The neat SAF is expected 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% to 84% compared to conventional jet fuel1. Furthermore, the SAF is expected to be certified by a CORSIA-approved Sustainability Certification Scheme (SCS) at the batch level, providing third-party verification that the SAF meets or exceeds all the requirements of Southwest’s SAF policy.

Diamond Green Diesel, a joint venture between an affiliate of Valero and Darling Ingredients Inc., will supply the neat SAF, which will be blended with Valero’s conventional jet fuel and delivered via existing fuel delivery infrastructure, including Explorer Pipeline and West Shore’s Chicagoland pipeline network.

“I commend Southwest Airlines for making this significant move forward to bring the first supply of sustainable aviation fuel for its flights out of Midway International Airport,” said U.S. Senator Tammy Duckworth (D-IL). “One of the most important things we can do to make American aviation more sustainable is to dramatically increase the supply of SAF. At the federal level, I’m going to keep pushing to increase the supply of American-grown, American-made SAF from a wide range of feedstocks—a true win-win solution that supports domestic farmers and blenders while reducing our nation’s carbon footprint.”

"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," said Commissioner Jamie L. Rhee of the Chicago Department of Aviation (CDA), which owns and operates both O'Hare and Midway international airports. "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."

Scaling SAF will require collaboration across and beyond the value chain. This agreement was made possible by the Illinois Sustainable Aviation Fuel Purchase Credit and support from valued Southwest Corporate Customers in Southwest’s Scope 3 SAF Program. With this SAF volume, Southwest can expand access for Corporate and Cargo Customers to support the use of SAF in the carrier’s operations.

“Today’s announcement marks a milestone in our efforts to utilize more SAF in our operation,” said Michael AuBuchon, Managing Director of Fuel Strategy and Management at Southwest Airlines. “We’re grateful to the state of Illinois for making the Sustainable Aviation Fuel Purchase Credit available to airlines serving Illinois, and we thank our incredible Corporate Customers for supporting our use of SAF, which is a great example of public-private collaboration that we anticipate will help scale SAF and meet our long-term sustainability goals.”