The companies intend to invest up to $50m in the JV, called Blue Blade Energy, for the development of this technology.
Once the technology is successfully developed, the JV plans to build a pilot facility next year, as well as a full-scale facility by 2028.
Under the partnership, Tallgrass will be responsible for managing the technology’s research and development work, including the development of the pilot plant.
It will also be involved in managing the construction of the production facility.
Green Plains will deliver the low-carbon ethanol feedstock and manage operations after the pilot facility is built.
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United Airlines will support the SAF development, fuel certification and into-wing logistics.
The carrier has also agreed to procure up to 2.7 billion gallons of SAF produced from the JV.
The SAF purchased will be sufficient to operate more than 50,000 flights on a yearly basis between the airline’s hub airports in Chicago and Denver.
United Airlines Ventures president Michael Leskinen said: “The production and use of SAF is the most effective and scalable tool the airline industry has to reduce carbon emissions and United continues to lead the way.
“This new joint venture includes two expert collaborators that have the experience to construct and operate large-scale infrastructure, as well as the feedstock supply necessary for success.
“Once operational, Blue Blade Energy has the potential to create United’s largest source of SAF providing up to 135 million gallons of fuel annually.”
Researchers at the US Department of Energy’s Pacific Northwest National Laboratory (PNNL) developed Blue Blade’s SAF technology.