Sustainable Aviation
Southwest Airlines Sells SAFFiRE Renewables to Conestoga Energy
Southwest Airlines divests SAFFiRE Renewables to Conestoga Energy, shifting strategy amid financial and investor pressures in sustainable aviation fuel development.
Southwest Airlines Divests SAFFiRE Renewables: A Strategic Retreat from Sustainable Aviation Fuel Development
Southwest Airlines’ divestment of SAFFiRE Renewables to Conestoga Energy after just 16 months of ownership marks a significant pivot in the carrier’s approach to sustainable aviation fuel (SAF) development. Announced in August 2025, the transaction reflects both internal and external pressures on Southwest as it navigates a challenging financial landscape and increased scrutiny from activist investors. This move comes at a time when the global aviation industry is under mounting pressure to decarbonize, with SAF viewed as a central pillar in reducing sector emissions. The sale underscores the tension between ambitious environmental commitments and the realities of corporate governance, capital allocation, and market competition.
The significance of this development extends beyond Southwest’s balance sheet. SAFFiRE Renewables, leveraging exclusive technology licensed from the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL), represented a promising pathway for producing ultra-low carbon-intensity aviation fuel from agricultural residues like corn stover. Its transfer to Conestoga Energy, a major biofuel producer, could reshape the competitive landscape for next-generation SAF technologies. The transaction also signals broader industry trends: consolidation, strategic realignment, and the growing influence of investor activism on sustainability strategies.
As airlines, regulators, and technology developers race to meet aggressive decarbonization targets, the Southwest-SAFFFIRE-Conestoga story offers a revealing case study of the opportunities and obstacles facing the future of sustainable aviation. The unfolding events raise critical questions about the role of airlines in technology development, the scalability of advanced biofuel pathways, and the ability of the sector to balance financial discipline with environmental ambition.
Transaction Overview and Strategic Context
Southwest Airlines sold SAFFiRE Renewables to Conestoga Energy in August 2025, ending its direct involvement in SAF technology development after just 16 months. The sale included all intellectual property, relevant technologies, key staff, and the planned pilot production facility. Financial-Results terms were not disclosed.
The move followed a period of retrenchment at Southwest. In early 2025, the airline initiated its first major layoffs in over five decades, with sustainability and SAF teams bearing a disproportionate share of the cuts. These actions coincided with mounting pressure from Elliott Investment Management, an activist investor that had acquired a significant stake in Southwest and was pushing for board and executive changes, citing the airline’s lagging financial performance and strategic missteps.
SAFFiRE Renewables had been acquired by Southwest in April 2024 as part of a broader push to secure scalable SAF procurement and advance the airline’s decarbonization goals. The sale to Conestoga marks a clear departure from these ambitions and reflects a wider recalibration of Southwest’s sustainability strategy in response to investor demands and operational challenges.
Corporate Governance and Investor Influence
Elliott Investment Management’s campaign for change at Southwest was instrumental in driving the company’s strategic pivot. With a stake representing around 11% of the airline’s market capitalization, Elliott criticized Southwest’s “insular culture” and lack of adaptation to industry changes. The result was a sweeping overhaul: executive chairman Gary Kelly and six board members stepped down, and the company signaled a shift toward traditional airline practices, including reconsidering its long-standing open seating policy.
The governance shakeup extended to operational priorities. Layoffs targeted sustainability teams, and the direct investment in SAF technology via SAFFiRE was wound down. This reallocation of resources suggests a prioritization of short-term financial performance and shareholder returns over longer-term environmental commitments.
The episode highlights the growing influence of activist investors in shaping corporate sustainability strategies, particularly in industries facing both financial headwinds and regulatory scrutiny.
“Projects need people, and they need champions within an organization. The hard part is finding the deals and making the investments and bringing this stuff to reality.” — Michael Baer, aviation industry consultant
SAFFiRE Renewables: Technology Platform and Market Potential
SAFFiRE Renewables was established to commercialize a process for converting corn stover, a widely available agricultural residue, into cellulosic ethanol, which can then be upgraded to sustainable aviation fuel. The core of its technology is the Deacetylation and Mechanical Refining (DMR) pretreatment, exclusively licensed from NREL. This process operates under mild conditions, reducing capital and operational costs compared to traditional acid-based pretreatments.
The DMR process enables high sugar and ethanol yields while minimizing the formation of fermentation inhibitors, a common challenge in cellulosic biofuel production. Pilot-scale demonstrations have achieved ethanol concentrations exceeding 10% by volume, pointing to the technology’s potential for commercial viability and cost competitiveness.
SAFFiRE’s pilot facility, co-located at Conestoga’s Arkalon Energy plant in Kansas, was designed to process 10 tons of corn stover per day. The project attracted support from the U.S. Department of Energy and state officials, reflecting its perceived strategic importance for both energy innovation and rural economic development. However, construction was paused pending the ownership transition, with Conestoga now aiming to operationalize the plant by 2026.
Conestoga Energy’s Acquisition Strategy
For Conestoga Energy, the Acquisitions of SAFFiRE Renewables represents a calculated bet on the future of ultra-low carbon-intensity biofuels. With over 200 million gallons of annual ethanol capacity and established expertise in carbon capture and renewable fuel production, Conestoga is well positioned to scale the DMR technology and integrate it into existing operations.
The company’s leadership views SAF as a “multi-billion-dollar market opportunity,” and the addition of SAFFiRE’s technology and talent is expected to enhance its competitive position. Conestoga’s ongoing investments in carbon capture, utilization, and sequestration (CCUS) further align with the environmental goals underpinning advanced SAF pathways.
The integration will also provide operational synergies, as key SAFFiRE personnel, including the chief technology officer and director of engineering, transition to Conestoga. This continuity is critical given the specialized knowledge required to commercialize cellulosic biofuel technologies.
“This acquisition places Conestoga at the leading edge of efforts to bridge the critical supply-demand gap facing the aviation industry while creating transformative opportunities for American agriculture.” — Tom Willis, CEO, Conestoga Energy
Sustainable Aviation Fuel Market Dynamics
The global sustainable aviation fuel Market-Analysis is poised for rapid expansion, with projections estimating growth from $1–2 billion in 2024/25 to as much as $25 billion by 2030. This surge is driven by regulatory mandates, airline decarbonization commitments, and advances in feedstock and conversion technologies.
Despite the bullish outlook, the market faces persistent challenges. Current SAF production meets less than 1% of global jet fuel demand, and cost premiums remain high, often triple that of conventional jet fuel. Bridging the supply-demand gap will require not only technological breakthroughs but also sustained Investments, policy support, and offtake commitments from airlines.
North America currently leads in SAF adoption, supported by federal and state incentives such as the Inflation Reduction Act and California’s Low Carbon Fuel Standard. Major U.S. airlines have signed long-term supply agreements with SAF producers, though Southwest’s SAF usage remains below industry averages. In 2024, the airline reported SAF accounting for less than 0.1% of its fuel consumption, compared to a global industry average of 0.3%.
Technology Pathways and Competitive Landscape
The bulk of today’s SAF is produced via Hydroprocessed Esters and Fatty Acids (HEFA) technology, which relies on waste fats and oils. However, feedstock limitations are driving interest in advanced pathways, including cellulosic conversion (such as DMR), Alcohol-to-Jet (AtJ), and Fischer-Tropsch synthesis.
Companies like Neste, World Energy, and LanzaJet are leading the commercialization of these technologies, often in partnership with airlines and energy majors. LanzaJet, in which Southwest retains a $30 million stake, operates a commercial AtJ facility in Georgia, demonstrating the viability of ethanol-based SAF production at scale.
The competitive environment is further shaped by carbon markets, regulatory mandates, and the availability of low-cost, sustainable feedstocks. Corn stover, the focus of SAFFiRE’s technology, offers significant potential for scale in the U.S. Midwest, provided operational and economic hurdles can be overcome.
Implications for Industry Decarbonization and Future Outlook
Southwest’s exit from direct SAF technology development highlights the fragility of industry efforts to scale advanced biofuels. While Conestoga’s acquisition ensures continuity for SAFFiRE’s technology, the loss of a major airline’s partnership and demand commitment may slow commercialization and broader adoption.
The episode also raises questions about the alignment between airline financial strategies and long-term climate objectives. As regulatory and market pressures intensify, the aviation sector will need to balance shareholder expectations with the need for sustained investment in decarbonization. The success of advanced SAF pathways, such as those pioneered by SAFFiRE, will depend on the willingness of both airlines and biofuel producers to share risk, invest in innovation, and build the infrastructure needed for large-scale deployment.
Looking ahead, the sustainable aviation fuel market is expected to continue its rapid growth, fueled by policy support, technological progress, and increasing demand for low-carbon travel. The real test will be whether industry participants can overcome the economic, operational, and governance challenges that have so far limited the sector’s impact on global emissions.
Conclusion
The sale of SAFFiRE Renewables by Southwest Airlines to Conestoga Energy is emblematic of the complex interplay between innovation, investment, and corporate governance in the sustainable aviation fuel sector. While the transaction ensures that promising technology remains in development, it also highlights the volatility of airline commitments to long-term climate solutions in the face of financial and investor pressures.
As the SAF market matures, the industry’s ability to achieve ambitious emissions reduction targets will hinge on collaborative investment, policy alignment, and the resilience of public-private partnerships. The lessons from the Southwest-SAFFFIRE-Conestoga transition will inform future strategies for both airlines and biofuel producers as they navigate the path to net-zero aviation.
FAQ
What is SAFFiRE Renewables?
SAFFiRE Renewables is a developer of sustainable aviation fuel technology, focused on converting corn stover into cellulosic ethanol using the Deacetylation and Mechanical Refining (DMR) process licensed from NREL.
Why did Southwest Airlines sell SAFFiRE Renewables?
Southwest sold SAFFiRE as part of a broader strategic retreat from direct SAF investment, influenced by financial performance concerns and pressure from activist investors demanding a focus on core operations.
What are the implications for sustainable aviation fuel development?
The sale underscores the challenges facing advanced SAF pathways, including the need for sustained investment, airline partnerships, and the balancing of financial and environmental priorities.
Who acquired SAFFiRE Renewables and what are their plans?
Conestoga Energy, a Kansas-based biofuel producer, acquired SAFFiRE with plans to integrate its technology and scale production at its existing facilities, targeting the growing SAF market.
How does this affect Southwest’s sustainability goals?
The divestment signals a deprioritization of Southwest’s previous SAF and emissions reduction targets, raising doubts about the airline’s ability to meet its announced climate commitments.
Sources: Aviation Week, NREL, Conestoga Energy, U.S. Department of Energy, International Energy Agency
Photo Credit: Conestoga – Montage
Sustainable Aviation
SABA Members Back Infinium eSAF Facility With Long-Term Deals
Google, McKinsey, and others sign binding SAFc agreements to support Infinium Energy’s 100,000 MT/year Texas eSAF project.
Corporate members of the Sustainable Aviation Buyers Alliance (SABA) have signed binding, multi-year agreements to purchase sustainable aviation fuel certificates (SAFc) from Infinium Energy’s planned electro-sustainable aviation fuel (eSAF) facility in Texas. The commitments, announced on September 22, 2026, are designed to provide the financial demand signals necessary for Infinium to reach a final investment decision on the project.
In a press release issued by SABA, the organization confirmed that American Airlines (AA) will serve as the physical offtaker for the fuel, managing logistics and delivery. The corporate buyers purchasing the associated certificates include AVEVA, Bain & Company, Google, and McKinsey & Company. The agreement marks the first time SABA’s procurement model has been utilized to directly drive new production capacity for scalable sustainable aviation fuel.
Project Atlas production and environmental targets
Infinium Energy was selected through a SABA procurement process earlier in 2026 to provide ultra-low carbon eSAF. The fuel is produced using waste carbon dioxide and renewable energy, distinguishing it from traditional biofuel pathways that rely on agricultural or waste feedstocks.
The planned Texas facility, designated Project Atlas, is expected to have an annual sustainable aviation fuel (SAF) production capacity of 100,000 metric tons. According to the alliance, the contracted volumes will support an expected greenhouse gas abatement of 212,000 metric tons of carbon dioxide equivalent (mtCO2e). SABA equates this emissions reduction to approximately 3,500 commercial flights between John F. Kennedy International Airport (JFK) and Los Angeles International Airport (LAX).
“We’re proud to partner with SABA members including AVEVA, Bain & Company, Google, McKinsey, and others, as well as American Airlines to bring Infinium Energy’s next world scale eSAF facility to life. Their commitment reflects a shared conviction that decarbonizing aviation requires real investment in next-generation supply,” said Robert Schuetzle, CEO of Infinium Energy.
Aggregating demand through book-and-claim
The transaction utilizes a book-and-claim model. Corporate buyers purchase the SAFc to claim the environmental benefits against their business travel emissions, while the physical fuel is delivered to partner airlines. This mechanism allows corporations to fund SAF production even when the physical fuel cannot be delivered directly to the airports their employees use.
American Airlines will manage the physical integration of the eSAF into the commercial aviation fuel supply chain. Jill Blickstein, Chief Sustainability Officer at American Airlines, stated that the corporate commitments broaden participation in the SAF market and demonstrate how customers can collaborate with airlines and fuel producers to advance decarbonization.
SABA, a joint initiative of the Environmental Defense Fund (EDF), the Center for Green Market Activation (GMA), and RMI, has aggregated $500 million in SAFc demand from 35 companies to date. Aviation currently accounts for approximately 2 to 3 percent of global greenhouse gas emissions.
“Novel technologies are critical to meeting future demand for sustainable aviation fuel, but they will not be operational in time without investments made today. This procurement demonstrates how aggregated, long-term demand can help take promising eSAF projects from idea to reality,” said Jon Creyts, CEO of RMI.
AirPro News analysis
We view this agreement as a critical structural step for the eSAF market. Power-to-Liquid (PtL) fuels like those planned for Project Atlas face a steep commercialization barrier. They are highly capital-intensive to build and currently produce fuel at a significant cost premium compared to both conventional Jet A and HEFA-based SAF derived from waste fats and oils.
Airlines operate on thin margins and generally cannot absorb the full green premium of eSAF alone. By unbundling the environmental attributes from the physical fuel, the SABA model allows highly capitalized corporate entities like Google and McKinsey & Company to absorb that premium. More importantly, signing binding, multi-year offtake agreements provides the revenue certainty that infrastructure lenders require before financing first-of-a-kind industrial facilities. If Project Atlas reaches a positive final investment decision based on these contracts, it will validate the book-and-claim model as a viable financing mechanism for next-generation aerospace infrastructure.
Sources: Sustainable Aviation Buyers Alliance via PR Newswire
Photo Credit: Sustainable Aviation Buyers Alliance
Sustainable Aviation
EU Exceeds 2025 SAF Mandate at 2.79 Percent Blend Rate
EASA reports EU airports hit 2.79% SAF blend in 2025, surpassing the 2% ReFuelEU mandate with 1.1M tonnes supplied.
The European Union surpassed its initial Sustainable Aviation Fuel (SAF) mandate in 2025, with SAF accounting for 2.79 percent of all jet fuel supplied to EU airports during the first mandatory reporting year.
According to the 2026 ReFuelEU Aviation Annual Technical Report published by the European Union Aviation Safety Agency (EASA) on September 17, 2026, fuel suppliers delivered 1.1 million tonnes of SAF against a total aviation fuel supply of 39.3 million tonnes. The 2.79 percent blend rate comfortably exceeded the 2 percent minimum required by the ReFuelEU regulation for 2025. This uptake resulted in an estimated reduction of 3.77 million tonnes of CO2 equivalent greenhouse gas emissions.
“We are pleased to confirm that the SAF mandate under ReFuelEU Aviation was not only met but exceeded,” EASA Executive Director Florian Guillermet stated in the agency’s press release.
Compliance and distribution across European hubs
The EASA report indicates high compliance rates across the sector. Ninety-three percent of aircraft operators and 90 percent of fuel suppliers fulfilled their reporting obligations in 2025. EASA noted that noncompliance among aircraft operators was primarily limited to small business jet operators, nonscheduled carriers, and third-country operators that failed to respond to competent authorities.
SAF distribution reached 121 Airports across all 27 Member States, representing 79 percent of all Union airports. Uptake was heavily concentrated at major European hubs. Amsterdam Airport Schiphol (AMS) accounted for 29 percent of the tracked SAF supply, followed by Frankfurt Airport (FRA) at 8 percent and Paris Charles de Gaulle Airport (CDG) at 7 percent.
Supply chain dynamics and feedstock dependencies
While the headline blending figures demonstrate regulatory success, the technical report reveals a structural reliance on imported raw materials. Although 86 percent of the SAF supplied at EU airports was refined domestically within the European Union, 85 percent of the underlying feedstocks originated from outside the bloc.
The primary feedstock utilized was Used Cooking Oil (UCO) processed via the Hydroprocessed Esters and Fatty Acids (HEFA) pathway. Of the imported feedstocks, 61 percent originated from China, with additional volumes sourced from Malaysia and Indonesia. On the refining side, Neste’s Rotterdam facility alone produced 33 percent of all European SAF in 2025.
AirPro News analysis
The successful implementation of the 2 percent mandate in 2025 proves that the logistical framework for SAF distribution at major European hubs is functional. However, the heavy reliance on Asian Used Cooking Oil presents a long-term vulnerability for European aviation. As the ReFuelEU mandate scales to 6 percent in 2030, the Regulations will also introduce sub-mandates for synthetic aviation fuels (e-fuels). With approximately 50 synthetic fuel projects awaiting final investment decisions and no large-scale e-fuel facilities currently operational in Europe, we anticipate significant capital mobilization will be required over the next 36 months to prevent future supply bottlenecks and reduce dependency on imported biomass.
Photo Credit: European Union Aviation Safety Agency
Sustainable Aviation
Montana Renewables Cuts SAF Expansion Cost to $137M
Calumet’s Montana Renewables targets 200M gallons of SAF annually by 2028 for $137M, down from a $1.2B plan.
Calumet, Inc. and its subsidiary Montana Renewables, LLC announced a revised expansion plan on September 1, 2026, that will scale SAF production to 200 million gallons annually by 2028 for a fraction of the originally projected cost.
By repurposing existing refining equipment at the Great Falls, Montana facility, the company expects to complete the MaxSAF project with only $137 million in remaining capital. This abandons a previous $1.2 billion megaproject design. The pivot eliminates the need for third-party equity and minimizes debt while accelerating domestic sustainable aviation fuel (SAF) capacity.
Capital efficiency and Department of Energy funding
The original Phase 2 plan contemplated $1.2 billion in capital expenditure. The revised strategy captures 70 percent of the expected benefit for 15 percent of the cost. The financial restructuring involves an amended Loan Guarantee Agreement (LGA) with the U.S. Department of Energy (DOE).
The original LGA was executed in January 2025, with a $782 million first tranche funded in February 2025 to recapitalize Montana Renewables, LLC (MRL). Under the amended agreement, the company will make a final draw of $34 million. This is significantly lower than the original $658 million Phase 2 DOE funding limit.
Calumet CEO Todd Borgmann stated the Office of Energy Dominance Financing (EDF) supported the adjustment to the loan agreement.
“Our amended agreement with the DOE facilitates innovative technology and domestic energy security at a fraction of the original cost. EDF’s willingness to right-size the LGA reflects its ongoing support for Montana’s largest agricultural investment. We look forward to our continued collaboration with the DOE on the success of this project,” Borgmann said.
Borgmann credited the company’s engineering and operational teams for developing a project that maximizes output while drastically reducing the required capital investment.
Production timeline and capacity milestones
The Great Falls facility currently operates at a 60 million gallon SAF run-rate following a spring 2026 constraint removal. A scheduled turnaround in the fourth quarter of 2026 will tie in repurposed equipment from the adjacent Calumet Montana Refining facility.
Following the fourth-quarter integration, the company expects to exceed an 80 million gallon SAF run-rate by December 31, 2026. Production is projected to surpass 120 million gallons by spring 2027 and reach the 200 million gallon target by December 31, 2028.
Total renewable product sales, including renewable diesel and renewable gasoline, are targeted at 17,000 barrels per day by year-end 2028. This represents a 40 percent expansion. The expanded facility will consume 2 billion pounds of ranch- and farm-originated feedstocks annually.
AirPro News analysis
The revised MaxSAF expansion highlights a strategic shift in how producers approach SAF scaling. As noted by Aviation Week on September 2, 2026, the plan allows the largest US producer of SAF to more than triple its production capacity for barely 10 percent of the originally planned investment.
During Calumet’s second-quarter 2026 earnings call on August 7, 2026, the company confirmed that Montana Renewables completed performance testing of the newly installed MaxSAF catalyst, which met or exceeded expectations. By leveraging existing fossil-fuel infrastructure rather than pursuing multi-billion-dollar greenfield projects, producers can bring SAF to market faster and with significantly lower financial risk. This capital-efficient model may set a precedent for other refiners looking to enter or expand in the renewable fuels sector without diluting equity or taking on unsustainable debt.
Sources: Calumet, Inc.
Photo Credit: Montana Renewables
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