Southwest Airlines Sells Renewable Unit in Retreat From Climate Goals
(Bloomberg) -- Southwest Airlines Co. sold a renewable fuels unit to Conestoga Energy as the carrier scales back its climate-focused initiatives following years of little progress by the industry.
Conestoga, a leading provider of low-carbon intensity biofuel, announced its purchase of Saffire Renewables LLC from Southwest Airlines Renewable Ventures for an undisclosed price on Thursday. The acquisition includes all intellectual property and related technologies, key leadership team members, and a proposed pilot facility in Kansas to produce sustainable aviation fuel, known as SAF.
The sale is part of Southwest’s broader pullback from sustainability initiatives, which began earlier this year. That included laying off seven of 10 employees working to reduce its climate pollution and expand use of SAF, Bloomberg News reported previously. The airline had first invested in Saffire in 2022 and purchased the business in March 2024, a month after creating the renewable ventures unit to invest in SAF startups.
“Southwest is enthusiastic about Saffire’s progress in advancing its ethanol-to-SAF technology,” the airline said in a statement Thursday. “We’re proud to have incubated Saffire’s early stage technology and pleased that Conestoga will move it to the next stage of commercialization.”
The aviation industry in general has struggled to make progress on its climate commitments, including hitting zero carbon emissions by 2050. Air travel accounts for about 4% of human-induced warming to date. The growth in cleaner jet fuel made from sources like used cooking oil and animal tallow has been slower than expected, with 2024 figures coming in well below the industry’s previous estimates.
Southwest’s pivot also comes after the Trump administration trimmed a credit for producers of greener jet fuel. That adjustment means it will be more difficult for producers to cover the costs of making SAF, according to Bloomberg Intelligence.
Tom Willis, chief executive officer of Conestoga, said Saffire technology can be used to make ethanol for purposes beyond just jet fuel.
Based in Liberal, Kansas, in the southwestern part of the state, Conestoga produces more than 200 million gallons of ethanol per year along with other feed products. It’s also been capturing carbon for over 15 years, which helps it sell to markets such as California that favor low-carbon-intensity fuels.
“I don’t think it’s going away,” Willis said of the demand.
Saffire’s proprietary ethanol production process converts corn husks, cobs and stalks that are typically left to decompose in the field into an abundant low-carbon feedstock for SAF production, Conestoga said. Eventually, Conestoga can add the technology as “bolt-on” additions to its existing plants already making fuel from corn kernels.
“The future has never been brighter in my opinion for biofuels,” Willis said. “We can go anywhere where there’s a demand for a very low-carbon fuel.”
(Updates with Southwest comment in fourth paragraph.)
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