Drax Group, a UK-based renewable energy leader, and Pathway Energy LLC, a carbon-negative energy company, have reached a heads of terms on a multi-year deal to supply over 1 million tonnes of sustainable biomass pellets annually to Pathway’s proposed sustainable aviation fuel (SAF) plant on the US Gulf Coast. This partnership signals significant progress in the aviation sector’s decarbonization efforts.
Strategic Partnership to Advance Carbon-Negative SAF Production
The deal underscores the growing global demand for sustainable aviation fuel, which can reduce carbon emissions by up to 80% compared to traditional jet fuels. According to the International Air Transport Association (IATA), SAF could deliver 65% of the emissions reductions required for the aviation sector to achieve net-zero emissions by 2050.
The SAF plant, once fully operational, will produce 30 million gallons of carbon-negative fuel annually. This output is expected to power 5,000 long-haul flights per year with carbon-neutral emissions, marking a major step in decarbonizing air travel.
Drax’s Potential Investment in SAF Project
In addition to the biomass supply agreement, Drax could also become a strategic partner in the project, with the possibility of a convertible loan note investment of up to $10 million. However, no investment decision has been made at this stage. The development of the $2 billion SAF plant is slated to begin in early 2026, with commercial production expected to start in 2029.
Pathway also plans to implement a Bioenergy with Carbon Capture and Storage (BECCS) system at the Port Arthur site. This technology aims to capture 1.9 million tonnes of CO2 per year, making the SAF production process carbon-negative while powering the plant itself.
Future Biomass Supply and BECCS Collaboration
The agreement may also lead to future biomass supply arrangements for two additional Pathway projects, potentially delivering an additional 2 million tonnes of sustainable biomass annually through the 2030s. Both Drax and Pathway have a shared interest in advancing BECCS technology, which has the potential to play a significant role in global carbon removal efforts.
Will Gardiner, CEO of Drax Group, commented: “This landmark deal could become the biggest third-party supply arrangement for Drax’s pellet business. The demand for sustainable biomass is accelerating, with international projects seeking long-term fuel supplies for applications like SAF and BECCS.”
Commitment to Decarbonizing Aviation and Scaling Carbon Capture
Steve Roberts, CEO and Founder of Pathway Energy, highlighted the strategic alignment between the two companies, stating: “This agreement accelerates our shared commitment to decarbonizing the aviation industry. By leveraging sustainable biomass feedstock and carbon capture technologies, we are well-positioned to address one of the most challenging industrial sectors through the production of carbon-negative SAF.”
