Montana Renewables, World Energy Sign 70M Gallon SAF Supply Deal

Two major players in the renewable fuels sector, Montana Renewables, LLC (MRL) and World Energy, have finalized a three-year agreement for the supply of more than 70 million gallons of Sustainable Aviation Fuel (SAF). The collaboration is a significant step in scaling the availability of low-carbon fuels for the aviation industry and is projected to reduce Carbon Dioxide (CO2) emissions by up to 600,000 metric tons over the contract period.

This long-term offtake agreement strengthens the supply chain for SAF, a critical component in the aviation sector's strategy for decarbonization. According to a joint press release, the deal links one of North America's largest SAF producers with the world's first commercial-scale provider, signaling a maturation of the market from spot purchases to more stable, long-range commitments. MRL, an unrestricted subsidiary of Calumet, Inc. (NASDAQ: CLMT), operates a major renewable fuel facility in Great Falls, Montana. World Energy has been a pioneer in the sector, establishing its first commercial-scale SAF production facility.

The Push for SAF

The agreement arrives as the global aviation industry intensifies its efforts to reduce its environmental footprint. The International Air Transport Association (IATA) has identified SAF as the key driver for achieving the industry's goal of net-zero carbon emissions by 2050, estimating it will account for approximately 65% of the required emissions reduction. SAF is a 'drop-in' fuel, meaning it is chemically similar to conventional jet fuel and can be used in existing aircraft and infrastructure without modification.

Global production of SAF has been increasing rapidly to meet rising demand. In 2023, production tripled to 600 million liters compared to 300 million liters in 2022. This growth is supported by significant regulatory tailwinds. The United States has established a SAF Grand Challenge with a goal of producing 3 billion gallons annually by 2030. In Europe, the ReFuelEU Aviation initiative mandates that fuel suppliers blend a minimum of 2% SAF at all EU airports starting in 2025, with that requirement increasing to 70% by 2050. This regulatory certainty is encouraging investment in production capacity, such as MRL's ongoing expansion projects.

Executive Outlook

Leaders from both companies highlighted the strategic importance of the partnership in meeting robust market demand. Bruce Fleming, CEO of Montana Renewables, commented on the company's expansion efforts and the strong market signals for SAF. "MRL's MaxSAF expansion project is progressing rapidly and is on track to deliver economic benefits to the region's farmers, ranchers, and energy-related economy this spring," Fleming stated. "Market demand for SAF remains strong, and this agreement is another signal of our commitment to American energy independence and Montana agriculture."

For World Energy, the agreement secures a significant volume of SAF to support its corporate clients, who are increasingly purchasing SAF attributes to offset emissions from business travel and logistics. Gene Gebolys, CEO of World Energy, explained the impact on their business. "Contracting with MRL for SAF production enables us to better support our growing aviation decarbonization business," said Gebolys. "We are serving many of the most recognized and respected brands in the world in sectors including tech, pharma, aviation, finance, business services, and others to meet their decarbonization commitments."

Scaling Up Production

The deal underscores the industry-wide trend of expanding SAF production capacity. Montana Renewables is actively advancing its MaxSAF™ 150 expansion project, designed to increase its output. The ability to secure large, multi-year offtake agreements like the one with World Energy provides producers with the financial stability needed to invest in such capital-intensive projects. This dynamic is crucial for building a resilient supply chain capable of meeting the ambitious targets set by both regulators and the aviation industry itself. The collaboration between a large-scale producer and an established distributor like World Energy helps create efficiencies and de-risks the supply chain, ensuring the product can reach end-users, including airlines and corporate customers, more reliably.

Why This Matters

This agreement represents more than a simple transaction; it is an indicator of the SAF market's evolving infrastructure. By connecting a major producer with a pioneering global distributor through a long-term contract, it enhances the stability and predictability of the SAF supply chain. This move facilitates the broader industry's transition away from fossil fuels and supports the ambitious decarbonization goals set for the coming decades.

From airline operations to fleet updates, commercial aviation news lives at flying.flights. Stay informed on aviation incidents, investigations, and best practices in the Safety category at flying.flights/safety.