British power giant Drax has secured a groundbreaking agreement to supply over one million tonnes of woody biomass annually to Pathway Energy, marking its strategic entry into the sustainable aviation fuel (SAF) sector in the United States.
The preliminary deal will see Drax’s Louisiana and Mississippi facilities transport pellets to power Pathway’s new clean-fuel facility on the Gulf Coast. The Yorkshire-based company is also contemplating a £10 million loan to support the project’s development.
The Port Arthur site in Texas, equipped with carbon capture technology, is projected to commence operations in 2029. The facility will produce 30 million gallons of SAF yearly, sufficient to power 5,000 carbon-neutral long-haul flights, representing a significant stride towards aviation sustainability.
This partnership stands as Drax’s third-largest pellet supply agreement, comprising roughly 20% of its total 2023 output. The collaboration could potentially expand to include two additional Pathway projects, involving a further 2 million tonnes of sustainable pellets annually through the 2030s.
The timing is particularly significant as Drax seeks to extend UK government subsidies beyond 2027 for its North Yorkshire power station, which currently provides 4% of Britain’s electricity. The company maintains its carbon-neutral stance, though environmental groups continue to challenge these credentials.
Chief Executive Will Gardiner highlighted the accelerating demand for sustainable biomass, noting international businesses’ growing interest in long-term fuel supplies for SAF and bioenergy projects with carbon capture capabilities. The company’s shares responded positively to the announcement, closing up 10p at 645½p.
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