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Fulcrum Biofuels signs supply contract for sustainable jet fuel with United Airlines

Last updated: 17:52 08 Jul 2015 EDT, First published: 15:52 08 Jul 2015 EDT

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Alternative fuels are a vital emerging industry for the future of aviation

United Airlines (NYSE:UAL) has invested US$30 million in Fulcrum BioEnergy, a pioneer in the development and commercialization of low-cost sustainable biofuel made from municipal solid waste backed by Waste Management (NYSE:WM), one of the largest environmental management companies in North America.

This alternative fuel is a "drop-in" fuel that meets all of United’s specifications, while being used in the same way as conventional jet fuel. Fulcrum expects that its first alternative fuel plant will be able to begin commercial operations in 2017.

Fulcrum said that United’s "is the largest" investment by any US based airline in alternative fuels, promoting aerospace biofuels and reducing carbon emissions.

United and Fulcrum will jointly develop up to five projects in areas close to United’s hub airports to produce some 680 million liters per year of biofuel.

Alternative fuels are a vital emerging industry for the future of aviation and investing in alternative fuels can be a strategic move to hedge airlines against the volatility of oil prices and carbon regulations.

The Star Alliance airline group has also negotiated a long-term supply agreement with Fulcrum and, subject to availability, will have the opportunity to buy at least 340 million liters of fuel a year lasting a minimum of 10 years at a competitive price compared with conventional jet fuel.

 United Airlines is the first company to have invested in a biofuel producing company and has been engaged in contributing to the development of sustainable fuels for aviation since 2009 when one of it Boeing 737 performed a demonstration flight powered by sustainable biofuels.

In 2011, United operated the first passenger flight in the US fed with a fuel derived from algae.

Fulcrum technology converts municipal solid waste (MSW) into renewable jet fuel. This fuel is expected to provide a reduction of more than 80% of carbon emissions compared to fossil aviation fuel.

Municipal solid waste is a low cost raw material featuring limited volatility and an almost limitless supply. Fulcrum projects have also received support and participation of the US Air Force and US Navy for the future production of biofuels that meet military specifications.

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