Aemetis and Finnair sign SAF agreement for 17.5M gallons in $70M deal

People in Finland are ranked as the happiest people in the world for the 5^th year in a row according to the World Happiness Report, a publication of the UN Sustainable Development Solutions Network that draws on global survey data from people in about 150 countries. Maybe that’s because the national air carrier of Finland, Finnair, which is majority-owned by the Finnish government, is so green and committed to sustainable aviation fuel (and by the way, often rated one of the safest airlines in the world with no fatal or hull-loss accidents since 1963). And on Friday, Aemetis signed an agreement with Finnair to supply 17.5 million gallons of SAF, further improving Finnair’s sustainability.

In today’s Digest, all about the Aemetis-Finnair offtake agreement for SAF, the $ value of the contract, delivery dates, the fuel blend, reactions from the stakeholders, and more.

The Offtake Agreement

On Friday came news from California that Aemetis, Inc., a renewable fuels company focused on negative carbon intensity products, signed an offtake agreement with oneworld Alliance airline member Finnair for 17.5 million gallons of blended sustainable aviation fuel to be delivered over the 7 year term of the agreement. The value of the contract including incentives is approximately $70 million.

What is the fuel blend?

As you probably already know, sustainable aviation fuel provides significant environmental benefits compared to petroleum jet fuel, including a lower lifecycle carbon footprint and reduced contrails. The blended sustainable aviation fuel to be supplied under this agreement is 40% SAF and 60% Petroleum Jet A to meet international blending standards.

Where is the fuel coming from?

The sustainable aviation fuel is expected to be produced by the Aemetis renewable jet/diesel plant under development on a 125 acre former U.S. Army Ammunition production plant site in Riverbank, California. Powered by 100% renewable electricity, the Aemetis Carbon Zero production plant at the Riverbank plant site is designed to sequester CO2 from the production process using injection wells, significantly reducing the carbon intensity of the renewable fuel.

Where is the fuel going?

The Aemetis fuel will be delivered to San Francisco International Airport.

When?

The blended sustainable aviation fuel is scheduled to begin deliveries to Finnair in 2025.

Reactions from the stakeholders

“Finnair has set an ambitious long-term target to fly carbon neutral in 2045 and SAF is an important part of the toolkit for reaching this target. Supporting SAF adoption is key to boosting the supply and demand for SAF and for increasing its usage in commercial aviation. The agreement also underlines the oneworld Alliance’s commitment to collectively source SAF,” says Eveliina Huurre, SVP Sustainability at Finnair.

“The supply of sustainable aviation fuel to Finnair is a part of $2 billion of contracts with oneworld Alliance members to reduce the environmental impact of aviation,” stated Eric McAfee, Chairman and CEO of Aemetis. “Our production of low carbon aviation fuel in California is made possible by the historical success of the California Low Carbon Fuel Standard, creating new investment and jobs in disadvantaged minority communities in the state.”

Aemetis on a roll…

March has been a fantastic month for Aemetis. Starting in early March, Aemetis closed two new, lower interest rate credit facilities with aggregate availability of up to $100 million, comprised of up to $50 million for projects that produce lower carbon intensity renewable products and up to $50 million for working capital.

Just a few days later, The Digest reported that Aemetis began commissioning the $12 million biogas-RNG upgrading facility connected to the PG&E gas pipeline interconnection unit located at the Keyes ethanol plant site. The full system commissioning process, including PG&E’s interconnection unit, is expected to be completed in April 2022, enabling the production of utility-grade renewable natural gas for sale to customers via pipeline delivery.

Another few days later, Aemetis reported year over year revenues increase 28% by $46 million compared to 2020 due to increased demand for low carbon transportation fuels and as the economy continued to rebound from COVID-19 disruptions.

And not two days after that, The Digest reported that Aemetis signed an offtake agreement with Qantas Group and Qantas Airlines for 35 million gallons of blended sustainable aviation fuel to be delivered over the 7-year term of the agreement. The value of the contract including incentives is approximately $250 million.

And for a more in-depth look at Aemetis and what they recently presented at the ABLC, you can access the just today published slide guide “RNG, Renewable Fuels from Solar, Waste Wood & Carbon: The Digest’s 2022 Multi-Slide Guide to Aemetis” here. A short Finnair slide guide highlighting their climate targets like 50% reduction in net CO2 emissions by end of 2025 can be found here.

Bottom Line

You may be sick of hearing about SAF, as it seemed to dominate conversations at ABLC earlier in March (a good summary can be found here at “The Comment that Silenced the Crowd: Heard on the Floor at ABLC 2022”), and Gevo’s huge $8.1 billion in signed deals in just one day last week (read all about that here at “Gevo’s $8 Billion Dollar Day”), and Aemetis was covered numerous times just this month of March, but the more we hear about SAF, the more that means biofuels and the bioeconomy is moving forward and making tomorrow look a bit brighter.