Enviva Inc and privately held Alder Fuels have agreed to partner on the long-term supply of biomass byproducts from timber for making a biofuel for aviation, a key part of cutting carbon emissions from air travel, the companies said on Tuesday.

Under the agreement, Enviva, a U.S. producer of woody biomass, will supply up to 750,000 tonnes per year of what it said is sustainably sourced forest byproducts like treetops and tree limbs to Alder, which is building a facility in the U.S. Southeast to make an energy-dense liquid that can be refined into sustainable aviation fuel (SAF). They expect the agreement to begin in 2024.

The biomass under the deal can make about 37 million gallons a year of SAF, a replacement for petroleum-based jet fuel, and is the largest such U.S. agreement, Bryan Sherbacow, the chief executive and president of Alder, told Reuters. The companies did not reveal the terms of the deal.

Sherbacow said the biggest problem with SAF has been scalability, but that Alder will provide lower-cost fuel that can also incorporate sources such as regenerative grasses and sugarcane waste.

See related article: Department of Energy Awards Green Plains, Tallgrass and PNNL Funding for SAF Technology

Thomas Meth, president of Enviva, said about half of the timber harvest is a byproduct, much of which can supply facilities to make SAF. A decline in the North American paper industry during the digital age has freed up some of that woody biomass byproduct for fuel making, he said.

The White House wants to cut aviation’s carbon emissions by 20% by 2030, with a goal of boosting SAF production to 3 billion gallons per year by 2030, and to meet 100% of aviation fuel demand of about 35 billion gallons a year by 2050. The climate law President Joe Biden signed last month boosted tax credits for making SAF, but more incentives will be needed to meet those goals.

Source: NASDAQ