- Companies reach heads of terms for the supply and purchase of over 1 million tonnes of sustainable biomass pellets per annum for Pathway’s SAF project in Port Arthur, Texas
- The plant will produce 30 million gallons of carbon negative jet fuel per year equivalent to more than 150 million gallons of carbon-neutral blended SAF
- Agreement could also pave the way for Drax to become a strategic partner in the project and supply two additional Pathway SAF projects
UK-based renewable energy leader Drax Group (Drax), and Pathway Energy LLC (Pathway), a carbon negative energy company, have reached heads of terms on a multi-year deal that could see Drax supply over 1 million tonnes of sustainable biomass pellets each year to Pathway’s proposed sustainable aviation fuel (SAF) plant on the US Gulf Coast.
Under a separate agreement, Drax could also become a strategic partner in the project, with a potential investment in the form of a convertible loan note of up to $10 million. No investment decision has been taken by Drax at this stage.
The heads of terms reflect growing global demand for SAF, which usually can reduce carbon emissions by up to 80% when compared to traditional jet fuels. Modelling by the International Air Transport Association1, expects the global use of SAF to deliver 65% of the emissions reductions required for the aviation sector to reach net zero by 2050.
Once fully operational, the plant will be capable of producing 30 million gallons of carbon-negative SAF annually, the equivalent of enough fuel to power 5,000 carbon-neutral long-haul (10+ hour) flights per year.
Pathway will shortly begin Front End Engineering Design and anticipates that it will begin construction on the $2 billion plant in early 2026. Following construction, commercial SAF production is expected to commence in 2029.
Both companies also have a strategic interest in bioenergy with carbon capture and storage (BECCS), a carbon removal and renewable power technology. Pathway intends to develop a BECCS system on the Port Arthur site which could remove 1.9 million tonnes of carbon dioxide from the atmosphere each year while powering the SAF facility and ensuring the jet fuel is carbon negative.
In the future, Drax could also potentially supply biomass to two additional Pathway projects, delivering a further 2 million tonnes of sustainable pellets per year to the business’ sites 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.
“Reaching heads of terms on this deal with Pathway is an important step in the energy transition and for decarbonising the aviation sector through sustainable aviation fuel production, which Drax is proud to be a part of. We also share Pathway’s aim of scaling bioenergy with carbon capture and storage to deliver the carbon removals that the world needs to fight climate change.”
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.”
ENDS
Media contacts:
Andy Low
E: [email protected]
T: 07841 068415
Pathway Energy
Mission Control Communications for Pathway Energy
E: [email protected]
Editor notes
1 Modelling referenced here: https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet—alternative-fuels/
About Drax
Drax’s purpose is to enable a zero carbon, lower cost energy future. Our strategic aims are to be a global leader in both carbon removals and sustainable biomass pellet production, and to be a UK leader in dispatchable, renewable generation.
Our operations
Drax owns and operates a portfolio of flexible, low-carbon and renewable UK power assets – biomass, hydro, and pumped storage generation – which provide dispatchable power and system support services to the electricity grid.
We are the UK’s largest source of renewable power by output, and Drax Power Station is the UK’s largest single source of renewable electricity by output.
Through our pellet production facilities in North America, Drax is the world’s largest integrated producer of sustainable biomass. Drax has 18 operational and development pellet production sites which will have a nameplate capacity of around 5.4 million tonnes once expansions are complete.
Drax supplies renewable electricity to UK industrial and commercial customers, offering a range of energy-related services including energy optimisation, as well as electric vehicle strategy and management.
Our future
Drax is progressing options for carbon removals using bioenergy with carbon capture and storage (BECCS) technology globally and at our UK biomass power station.
In 2024, we launched Elimini, a US-based company to lead our global efforts to deliver carbon removals at megaton scale. Elimini’s purpose is to remove carbon for good. To achieve this, it is convening engineers, environmentalists, communities, investors, and innovators to scale the market for carbon removals, with the aspiration of transforming our economies from carbon emitters to carbon removers. For more information, visit elimini.com.
About Pathway Energy
Pathway Energy is a low carbon biomass to energy company that integrates sustainable carbon efficient conversion technologies, leveraging carbon sequestration, to produce sustainable aviation fuel. Our development platform combines a scalable carbon removal process pathway including BECCS, and Biomass with Carbon Removal and Storage to produce carbon-negative fuels. To learn more, visit https://pathwayenergy.com/.
