Drax Group, a leading UK-based renewable energy company, and Pathway Energy LLC, a carbon-negative energy firm, have entered into a multi-year agreement, which outlines the potential for Drax to supply over 1 million tons of sustainable biomass pellets annually to Pathway‘s proposed sustainable aviation fuel (SAF) plant situated on the US Gulf Coast.
Furthermore, Drax may become a strategic partner in the project. This could involve a convertible loan note investment of up to $10 million, although no investment decision has been finalized by Drax.
Both companies share a strong interest in bioenergy with carbon capture and storage (BECCS), a technology that removes carbon dioxide from the atmosphere while generating renewable power.
Pathway plans to integrate a BECCS system into the Port Arthur site. This system has the potential to remove 1.9 million metric tons of CO2 annually, powering the SAF facility and ensuring the jet fuel’s carbon-negative status.
According to the International Air Transport Association, SAF is projected to contribute 65% of the emissions reductions required for the aviation sector to achieve net-zero emissions by 2050.
The proposed SAF plant boasts an annual production capacity of 30 million gallons, equivalent to the fuel required for approximately 5,000 long-haul flights per year. Pathway will commence Front End Engineering Design shortly and aims to begin construction in early 2026. Commercial SAF production is anticipated to commence in 2029.
Looking ahead, Drax may potentially supply biomass to two additional Pathway projects. This could involve an additional 2 million tonnes of sustainable pellets annually through the 2030s.
Will Gardiner, Drax Group CEO, said: “This landmark deal has the potential to be the biggest third-party supply arrangement Drax’s pellet business has made. Demand for sustainable biomass is accelerating, with international businesses seeking long-term fuel supplies for a range of projects globally – including sustainable aviation fuel and bioenergy with carbon capture and storage.”
Steve Roberts, CEO and Founder of Pathway Energy, said: “This innovative agreement catalyzes our aligned commitment with Drax to decarbonize the aviation industry and establishes the strategic alignment with Drax to deploy additional projects leveraging proven biomass conversion technologies, sustainable biomass feedstock, and carbon capture and sequestration. With a global scale supply of CORSIA-compliant biomass material, we are well-poised to address one of the hardest to abate industrial sectors through the production of carbon-negative sustainable aviation fuels.”