United Airlines (UAL) Tuesday executed a definitive purchase agreement with AltAir Fuels for cost-competitive, sustainable, advanced biofuels at commercial scale.
With United's strategic partnership, AltAir Fuels will retrofit part of an existing petroleum refinery to become a 30 million gallon, advanced biofuel refinery near Los Angeles, California.
The companies said AltAir is retrofitting the existing refinery through process technology developed by Honeywell's (HON) UOP.
AltAir will produce low-carbon, renewable jet fuel and other renewable products. United has agreed to buy 15 million gallons of lower-carbon, renewable jet fuel over a three-year period, with the option to purchase more.
The airline is purchasing the advanced biofuel at a price competitive with traditional, petroleum-based jet fuel. AltAir expects to begin delivering five million gallons of renewable jet fuel per year to United from 2014. United will use the biofuel on flights operating out of its Los Angeles hub.
United said it would support AltAir Fuels' efforts to incorporate internationally recognized sustainability standards like those being developed by the Roundtable on Sustainable Biomaterials.
UAL closed marginally higher on Tuesday at $32.20, and gained 1.9 percent in the extended trading.
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