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’ 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.
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.
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 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.
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
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%.
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.
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. 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.
What is SAFFiRE Renewables? Why did Southwest Airlines sell SAFFiRE Renewables? What are the implications for sustainable aviation fuel development? Who acquired SAFFiRE Renewables and what are their plans? How does this affect Southwest’s sustainability goals? Sources: Aviation Week, NREL, Conestoga Energy, U.S. Department of Energy, International Energy Agency
Southwest Airlines Divests SAFFiRE Renewables: A Strategic Retreat from Sustainable Aviation Fuel Development
Transaction Overview and Strategic Context
Corporate Governance and Investor Influence
SAFFiRE Renewables: Technology Platform and Market Potential
Conestoga Energy’s Acquisition Strategy
Sustainable Aviation Fuel Market Dynamics
Technology Pathways and Competitive Landscape
Implications for Industry Decarbonization and Future Outlook
Conclusion
FAQ
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.
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.
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.
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.
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.
Photo Credit: Conestoga – Montage
Sustainable Aviation
Asia-Pacific Aviation Growth and Sustainable Aviation Fuel Initiatives 2026
Asia-Pacific aviation growth faces decarbonization challenges with new SAF mandates and Airbus’s just transition strategy at Singapore Airshow 2026.
This article is based on an official press release from Airbus and additional industry reporting regarding the Singapore Airshow 2026.
As the aviation industry gathers for the Singapore Airshow 2026, the Asia-Pacific (APAC) region stands as the focal point of global aerospace growth. According to recent industry forecasts, APAC is projected to account for over 50% of global aviation growth between 2025 and 2026. However, this rapid expansion presents a critical challenge: reconciling a forecast 7.3% increase in passenger traffic with urgent decarbonization goals.
In a press release issued on February 2, 2026, Airbus outlined a strategy focused on a “just transition.” The European manufacturer argues that the adoption of Sustainable Aviation Fuel (SAF) in Asia-Pacific offers more than just environmental compliance; it presents a pathway for regional socioeconomic development and energy sovereignty.
While the primary driver for SAF adoption globally has been carbon reduction, Airbus emphasizes that for the APAC region, the benefits are deeply tied to local economic resilience. The region possesses abundant feedstock potential, including agricultural residues, used cooking oil, and palm oil waste.
According to the Airbus announcement, utilizing agricultural waste for fuel production addresses multiple local issues simultaneously. In many parts of Asia, the burning of agricultural fields contributes significantly to seasonal air pollution. By converting this biomass into SAF, the region can reduce local smog while creating new revenue streams for rural communities.
Airbus describes this approach as a “just transition,” ensuring that the shift to green energy supports developing economies rather than hindering them. The manufacturer notes that developing local production capabilities also boosts “regional energy sovereignty,” reducing the reliance on imported fossil fuels.
“Given the broad socioeconomic diversity… Asia-Pacific is a prime place to demonstrate the possibilities for a just transition. Leveraging co-benefits could open opportunities to build community resilience.”
, Airbus Press Release, February 2, 2026
Beyond manufacturer initiatives, government policy in the region is hardening. Data released in conjunction with the Singapore Airshow highlights a wave of new mandates and targets aimed at accelerating SAF uptake. Most notably, Singapore has confirmed the introduction of a SAF levy for all flights departing from Changi Airport starting October 1, 2026. This levy is designed to fund a national 1% SAF target by the end of the year, with plans to scale to 3-5% by 2030.
Other regional developments include:
The push for decarbonization is also visible on the tarmac. During the Singapore Airshow, an Airbus A350-1000 is performing flying displays powered by a 35% SAF blend. The fuel, supplied by Shell Aviation, was produced via the HEFA-SPK pathway using used cooking oil and tallow.
In a significant move for propulsion technology, Airbus, CFM International, and the Civil Aviation Authority of Singapore (CAAS) signed a Memorandum of Understanding (MOU) on February 2. This agreement establishes Singapore as the world’s first airport testbed for the “RISE” (Revolutionary Innovation for Sustainable Engines) program. The initiative aims to test “Open Fan” engine architecture, which targets a 20% improvement in fuel efficiency.
Additionally, Airbus and Cathay Group have reiterated their commitment to a US$70 million joint investment, originally announced in late 2025, to accelerate SAF production projects with commercial viability in the region.
While the regulatory and technological momentum is palpable, a stark reality remains. Industry data indicates that global SAF output reached only 1.9 million tonnes in 2025, representing a mere 0.6% of total jet fuel demand. With APAC passenger traffic expected to grow by 7.3% in 2026, the gap between demand for travel and the supply of green fuel is widening.
The “green premium”, where SAF costs 2x to 4x more than conventional jet fuel, remains the primary hurdle. While the “just transition” narrative provided by Airbus offers a compelling long-term vision for feedstock utilization, the immediate success of these initiatives will depend heavily on whether the new levies and investments can bridge the price gap quickly enough to meet the 2027-2030 mandates.
What is the “Just Transition” in aviation? When does the Singapore SAF levy begin? What is the current global supply of SAF? Sources:
Asia-Pacific Aviation at a Crossroads: Balancing Growth with a “Just Transition”
The Socioeconomic Case for SAF
Turning Waste into Wealth
Regulatory Momentum and National Mandates
Technological Milestones at Singapore Airshow 2026
New Partnerships
AirPro News Analysis
Frequently Asked Questions
In this context, it refers to decarbonizing aviation in a way that provides economic benefits to developing nations, such as creating jobs in rural areas by using agricultural waste for fuel production.
The levy applies to all flights departing Singapore starting October 1, 2026.
As of 2025, SAF production accounted for approximately 0.6% of total global jet fuel usage.
Airbus,
IATA,
Civil Aviation Authority of Singapore
Photo Credit: Airbus
Sustainable Aviation
FedEx Expands Sustainable Aviation Fuel Program to DFW and JFK Airports
FedEx expands sustainable aviation fuel use to Dallas-Fort Worth and JFK airports, supporting its carbon-neutral goals with 5 million gallons secured for 2025.
This article is based on an official press release from FedEx.
FedEx has officially expanded its SAF program to include Dallas-Fort Worth International Airport (DFW) and John F. Kennedy International Airport (JFK). The logistics giant announced the move on January 29, 2026, marking a significant step in its “Priority Earth” sustainability roadmap. With these additions, FedEx now utilizes SAF at five airports across the United States.
According to the company’s announcement, the expansion is supported by World Fuel Services (WFS), which manages the supply chain and delivery of the fuel. The initiative positions FedEx as the first airline, cargo or passenger, to purchase SAF for regular commercial operations at DFW, a major global logistics hub.
The agreement covers the purchase of approximately 2 million gallons of “neat” (unblended) SAF for these two locations. When combined with agreements for other hubs, FedEx has secured a total of 5 million gallons of neat SAF for delivery throughout 2025.
While the purchasing agreements are calculated in gallons of “neat” SAF, the fuel actually delivered to aircraft is a blend. Safety regulations currently prohibit the use of 100% SAF in commercial aircraft engines. Consequently, the fuel supplied to FedEx at DFW and JFK is a mixture containing a minimum of 30% neat SAF blended with conventional Jet A fuel.
World Fuel Services facilitates this supply, typically sourcing the renewable component from Valero’s Diamond Green Diesel (DGD) joint venture. The SAF is produced via the HEFA (Hydroprocessed Esters and Fatty Acids) pathway, utilizing waste-based feedstocks such as used cooking oil, animal tallow, and distiller’s corn oil. This production method allows for a lifecycle greenhouse gas (GHG) emissions reduction of up to 80% compared to standard petroleum-based jet fuel.
In a statement regarding the logistical achievement, Bradley Hurwitz, Senior Vice President of Supply & Trading at World Fuel Services, noted:
“FedEx’s purchase at DFW and JFK demonstrates how our aviation fuel distribution platform enables carriers to access lower-carbon fuel options with a robust supply chain designed for flexibility and scale.”
This expansion is part of FedEx’s broader strategy to achieve carbon-neutral global operations by 2040. The company has set an interim target to source 30% of its total jet fuel from alternative fuels by 2030. The addition of DFW and JFK complements existing SAF programs at Los Angeles International Airport (LAX), Chicago O’Hare (ORD), and Miami International Airport (MIA). Karen Blanks Ellis, Chief Sustainability Officer at FedEx, emphasized the progress made over the last year:
“Expanding SAF use by FedEx to include our operations at DFW and JFK caps off a successful year of SAF deployments coast-to-coast. While we know there remains work ahead to procure more SAF… we are proud of our steps forward.”
The introduction of SAF at Dallas-Fort Worth is particularly notable. While pilot programs have existed at DFW since 2021, they were largely limited to business aviation. FedEx’s commitment marks the first regular commercial adoption at the airport, signaling a shift from experimental to operational use in the cargo sector.
However, the industry faces significant headwinds. SAF currently trades at a premium of two to five times the price of conventional jet fuel. Furthermore, global production remains less than 1% of total jet fuel demand. While the “book and claim” system and government incentives like the U.S. Inflation Reduction Act help bridge the cost gap, the physical availability of SAF remains the primary bottleneck for large-scale adoption.
By securing 5 million gallons of neat SAF for 2025, FedEx is signaling consistent demand to producers, which is essential for stimulating the investment required to increase production capacity.
Airport officials have welcomed the move as a validation of existing infrastructure capabilities. Because the blended fuel is a “drop-in” solution, it requires no modifications to airport storage tanks or hydration systems.
Robert Horton, Vice President of Environmental Affairs at DFW Airport, stated:
“FedEx’s SAF purchase reflects how airlines, airports, and fuel providers work together within existing airport infrastructure to support the development of more sustainable aviation operations.”
“Neat” SAF refers to the pure, unblended sustainable fuel. It is not used in aircraft in this form due to safety regulations. Instead, it is blended with conventional jet fuel before delivery. Purchasing agreements often cite “neat” volumes to track the exact amount of renewable content purchased.
As of early 2026, FedEx utilizes SAF at five U.S. airports: Dallas-Fort Worth (DFW), John F. Kennedy (JFK), Los Angeles (LAX), Chicago O’Hare (ORD), and Miami (MIA). The specific SAF used in this agreement, produced via the HEFA pathway, can reduce lifecycle greenhouse gas emissions by up to 80% compared to conventional jet fuel.
FedEx Expands Sustainable Aviation Fuel Program to DFW and JFK Airports
Operational Details and Supply Chain
Strategic Context: The “Priority Earth” Goal
AirPro News Analysis
Stakeholder Commentary
Frequently Asked Questions
What is “Neat” SAF?
Where does FedEx use SAF?
What is the emission benefit?
Sources
Photo Credit: FedEx
Sustainable Aviation
Washington Launches Cascadia Sustainable Aviation Accelerator for SAF
The Cascadia Sustainable Aviation Accelerator launches with $20M funding to boost Pacific Northwest Sustainable Aviation Fuel production to 1 billion gallons annually by 2035.
This article is based on official press releases from Alaska Airlines and Washington State University, as well as public announcements from the launch event.
On January 8, 2026, a coalition of government, industry, and academic leaders officially launched the Cascadia Sustainable Aviation Accelerator (CSAA). Unveiled at the Boeing Future of Flight in Mukilteo, Washington, the initiative aims to establish the Pacific Northwest as a global leader in the production and deployment of Sustainable Aviation Fuel (SAF).
According to official announcements, the accelerator is backed by $20 million in initial funding. This capital includes $10 million from Washington State’s Climate Commitment Act funds and a matching $10 million contribution from an anonymous philanthropic donor. The coalition has set an ambitious target: to scale regional SAF production to 1 billion gallons annually by 2035.
The initiative represents a broad partnership designed to bridge the gap between policy, technology, and commercial viability. Washington Governor Bob Ferguson championed the launch, positioning it as both an economic engine and a critical climate solution for the state.
The coalition features major stakeholders across multiple sectors:
“We have all the pieces in place to ensure this once-in-a-generation economic opportunity is realized, and this accelerator will make that happen.”
, Governor Bob Ferguson, via official press release
To address the complex barriers facing the SAF market, the initiative is divided into two complementary arms: the Accelerator and the Institute.
The CSAA focuses on market acceleration, financing, and policy advocacy. Its primary mission is to “de-risk” the industry for producers and investors. By harmonizing tax incentives and aggregating fuel demand from airlines and corporate partners, the Accelerator aims to create a stable market environment that encourages rapid scaling of production facilities. The Institute will handle the technical and scientific challenges of SAF adoption. It will operate a new Sustainable Aviation Fuel Research and Development Center based at Paine Field in Snohomish County. While a permanent facility is scheduled for completion by 2029, the center will open in a temporary commercial space in the coming months.
A key feature of the Institute will be the world’s first “SAF Repository.” This facility will function similarly to a seed bank, collecting, indexing, and distributing fuel samples to researchers globally to standardize testing and certification processes.
“For aviation to remain strong and resilient in the decades ahead, sustainability must be part of its future.”
, Elizabeth Cantwell, WSU President, via WSU News
Sustainable Aviation Fuel is widely considered the most viable near-term solution for decarbonizing long-haul aviation. Made from feedstocks such as agricultural waste, used cooking oil, or captured carbon, SAF can reduce lifecycle emissions by up to 80% compared to conventional jet fuel. However, current supply accounts for less than 1% of global jet fuel usage, and it remains significantly more expensive than fossil-based alternatives.
The Pacific Northwest is viewed as an ideal “test bed” for solving these problems due to its access to renewable hydroelectric power, forestry and agricultural residues, and a deep aerospace talent pool.
The Accelerator aims to support existing regional projects, including:
“This is a systems issue that no one company can solve. You’ve got great companies… ready to use this fuel, but we have to make it available.”
, Guy Palumbo, Amazon Director of Public Policy, via launch event remarks
The launch of the Cascadia Sustainable Aviation Accelerator marks a shift from individual corporate sustainability goals to a systemic regional strategy. While the target of 1 billion gallons by 2035 is aggressive, the bifurcation of the initiative into an “Accelerator” (finance/policy) and an “Institute” (R&D) suggests a mature understanding of the bottlenecks. The primary challenge for the CSAA will be feedstock logistics. While the Pacific Northwest has abundant forestry and agricultural waste, the infrastructure to collect, transport, and process these materials at a scale capable of producing 1 billion gallons does not yet exist. Furthermore, the involvement of corporate giants like Amazon and Microsoft is critical; their willingness to pay a “green premium” for sustainable air cargo and travel could provide the demand certainty that producers need to secure financing for new plants.
Success will likely depend on how quickly the Institute can streamline the fuel certification process, which has historically been a slow hurdle for new SAF pathways.
Sources:
Washington Leaders Launch Cascadia Sustainable Aviation Accelerator to Power PNW SAF Hub
A Public-Private Coalition
Strategic Structure: Accelerator and Institute
The Cascadia Sustainable Aviation Accelerator (CSAA)
The Cascadia Sustainable Aviation Institute (CSAI)
Industry Context and Regional Projects
AirPro News Analysis
Photo Credit: Alaska Airlines
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