German flag carrier Lufthansa is set to procure large volumes of sustainable aviation fuel (SAF) from energy company VARO under an expanded alliance.

The duo reached a memorandum of understanding (MoU) in this regard for SAF production and supply.

Lufthansa could purchase large volumes of green fuel as early as 2026 from VARO.

Besides, the firms look to scale ‘innovative processes’ for green hydrogen production from biogenic waste materials. 

The energy firm aims to produce nearly 260,000tpa of green fuel from 2026. In the long term, it aims to exceed a SAF production capacity of 500,000tpa.

SAF is a significant element in the company’s ONE VARO Transformation plan.

VARO Energy CEO Dev Sanyal said: “Our ONE VARO Transformation strategy is centred on meeting the need of our customers to decarbonise as they progress in the Energy Transition while ensuring supply reliability.

“This MoU builds on our long-standing partnership with the Lufthansa Group, one of the world’s largest airline groups, and I am excited to be working with them to accelerate the development and use of sustainable aviation fuels – a key element of our biofuels strategic growth pillar.”

The latest MoU furthers the German airline’s objective of facilitating the availability, market ramp-up, and use of SAF.

In Europe, the carrier is one of the largest SAF customers.

Last September, it signed an MoU to purchase more than 800,000t of SAF between 2023 and 2030 from Austrian oil, gas and chemicals firm OMV.

In August 2022, Lufthansa entered a non-binding MoU to buy up to up to 1.8 million metric tonnes of SAF from Shell International Petroleum from 2024 to 2030 for supply to airports worldwide.

Lufthansa Group head of Fuel Management Supply Katja Kleffmann said: “We believe in SAF being a powerful tool to make aviation more climate friendly and are therefore strongly engaged in SAF development and making it logistically available at airports.”