FedEx and Neste Launch Major SAF Initiative at LAX to Cut Emissions

FedEx and Neste Launch Major Sustainable Aviation Fuel Initiative at LAX

The aviation industry is under increasing scrutiny as global climate goals tighten and public awareness of carbon emissions grows. One of the most promising solutions to reduce aviation-related greenhouse gas emissions is the adoption of Sustainable Aviation Fuel (SAF). SAF offers a renewable alternative to traditional fossil-based jet fuel, capable of reducing emissions by up to 80% over its lifecycle. As such, it has become a focal point in the decarbonization strategies of airlines and cargo carriers alike.

In a landmark move, FedEx, the world’s largest express cargo airline, has partnered with Neste, a leading producer of renewable fuels, to begin supplying SAF at Los Angeles International Airport (LAX). This initiative, announced on May 20, 2025, marks FedEx’s first major deployment of SAF in the United States and represents the largest SAF purchase by a U.S. cargo airline at LAX to date. The agreement not only reflects FedEx’s commitment to sustainability but also highlights the growing role of SAF in transforming the aviation sector.

Strategic Partnership: Neste and FedEx Drive Aviation Sustainability

Details of the Agreement

Under the new agreement, Neste will supply FedEx with 8,800 metric tons, equivalent to over three million gallons, of blended Neste MY Sustainable Aviation Fuel™ over the course of one year. The blend includes a minimum of 30% neat SAF, which is derived entirely from renewable waste and residue materials such as used cooking oil and animal fat waste. This volume is projected to account for approximately 20% of the total jet fuel consumed by FedEx at LAX annually.

Deliveries of the SAF began in May 2025 and are expected to continue for a full year. The environmental impact of this supply is significant: it is estimated to reduce CO2 emissions by approximately 25,000 metric tons annually. That’s roughly equivalent to removing 5,400 passenger vehicles from the road for one year, according to industry estimates.

FedEx’s Chief Sustainability Officer, Karen Blanks Ellis, emphasized the importance of this initiative, stating, “Our aviation network represents the largest amount of FedEx fuel use globally and, as a result, is our biggest opportunity to drive down emissions.” The company aims to achieve carbon-neutral operations by 2040, and SAF is a cornerstone of that strategy.

Neste’s Role and Production Capabilities

Neste, headquartered in Finland, is currently the world’s largest producer of SAF. The company refines renewable raw materials into high-quality fuels at facilities located across three continents. As of 2025, Neste’s global SAF production capacity stands at 1.5 million tons (approximately 515 million gallons) per year, with plans to increase this to 6.8 million tons by 2027.

The company’s SAF is certified for commercial use and can be blended up to 50% with conventional jet fuel. It works seamlessly with existing aircraft engines and fueling infrastructure, which makes it an attractive option for airlines and cargo operators looking to reduce emissions without overhauling their fleets.

“FedEx is demonstrating how the air cargo industry can leverage available lower-emission solutions like SAF to reduce its environmental impact,” said Carl Nyberg, Senior Vice President, Commercial, Renewable Products at Neste. This partnership is expected to pave the way for more widespread adoption of SAF in the U.S. aviation sector.

Industry Context and Market Dynamics

Regulatory and Market Support

The aviation industry currently contributes approximately 2–3% of global CO2 emissions. In response, international bodies such as the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO) have launched initiatives like CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) to promote carbon-neutral growth and ultimately achieve net-zero emissions by 2050.

In the U.S., policy support has played a critical role in fostering SAF adoption. California, where LAX is located, offers incentives and blending mandates that make the state a favorable environment for sustainable fuel deployment. Additionally, the federal government has introduced a SAF tax credit of up to $1.75 per gallon as part of broader efforts to decarbonize transportation.

Despite these incentives, SAF remains more expensive than conventional jet fuel, with prices ranging from $2.50 to $3.50 per gallon compared to around $2.00 for fossil-based fuel. These price dynamics underscore the need for continued investment in technology and infrastructure to scale production and bring costs down.

Implications for the Cargo and Logistics Sector

FedEx’s deployment of SAF at LAX is not just a milestone for the company but also a signal to the broader logistics and air cargo industry. As one of the most emission-intensive sectors, air freight faces mounting pressure from investors, regulators, and customers to adopt cleaner energy sources.

By embracing SAF, FedEx positions itself as a leader in sustainable logistics and sets a precedent for other cargo carriers. This move may catalyze similar initiatives across the industry, especially as more companies commit to decarbonization targets and environmental, social, and governance (ESG) benchmarks.

Moreover, the LAX deployment could reinforce Los Angeles’ role as a hub for sustainable aviation, potentially attracting further investment and innovation in the area. As SAF infrastructure develops, more airports and carriers may follow suit, accelerating the transition to low-emission air transport.

Challenges and the Road Ahead

While the FedEx-Neste partnership is a significant step forward, scaling SAF adoption faces several hurdles. Chief among these are production limitations, high costs, and the need for broader industry collaboration. According to sustainability experts, achieving widespread SAF use will require coordinated efforts among fuel producers, airlines, regulators, and investors.

Infrastructure development is also crucial. Airports must be equipped to store and distribute SAF, and supply chains need to be optimized to ensure reliable delivery. Additionally, public and private funding will be necessary to support research and development into next-generation biofuels and synthetic alternatives.

Despite these challenges, the momentum is building. With major players like FedEx and Neste leading the charge, and supportive policies gaining traction, the future of SAF looks increasingly viable. Continued innovation and investment will be key to unlocking its full potential.

Conclusion: A Step Toward Greener Skies

The collaboration between FedEx and Neste at LAX marks a pivotal moment in the journey toward sustainable aviation. By committing to SAF, FedEx not only reduces its carbon footprint but also sets a benchmark for the logistics and air cargo industry. Neste’s role as a global SAF supplier further underscores the importance of scalable, renewable fuel solutions in achieving climate goals.

As the aviation industry continues to evolve, partnerships like this one demonstrate that sustainable transformation is not only possible but already underway. With the right mix of policy support, technological innovation, and corporate commitment, SAF could become a cornerstone of a cleaner, more resilient air transport system.

FAQ

What is Sustainable Aviation Fuel (SAF)?
SAF is a renewable alternative to conventional jet fuel, made from waste and residue materials. It can reduce greenhouse gas emissions by up to 80% over its lifecycle.

Why is FedEx using SAF at LAX?
FedEx is using SAF to reduce emissions from its air operations as part of its goal to achieve carbon-neutral operations by 2040. LAX was chosen due to its infrastructure and policy support for sustainable fuels.

How much SAF is FedEx using?
FedEx is purchasing 8,800 metric tons (about 3 million gallons) of blended SAF from Neste, accounting for roughly 20% of its annual jet fuel use at LAX.

Sources:
Neste Corporation,
FedEx Sustainability Reports,
IATA Climate Action,
U.S. Energy Information Administration,
CORSIA