Drax Confirms Deal to Supply Wood Biomass Pellets to Pathway Energy’s Proposed Domestic SAF Project
Drax and Pathway Energy have reached heads of terms on a multi-year deal that could see Drax supply more than one million tonnes of sustainable biomass pellets per annum to Pathway’s proposed SAF plant on the U.S. Gulf Coast.
(Selby, North Yorkshire) UK-based power and renewable energy company Drax Group (LON: DRX) and Pathway Energy announced today an agreement on the terms of a multi-year supply deal of sustainable biomass pellets for Pathway Energy’s proposed sustainable aviation fuel (SAF) project on the Gulf Coast of the United States.
Photo courtesy of today’s press release from Drax.
Per today’s press release from Drax, the deal terms hold that Drax could supply more than one million tonnes of sustainable biomass pellets per annum to Pathway’s proposed SAF plant in Port Arthur, Texas. The plant will produce 30 million gallons of carbon negative jet fuel per year, which is equivalent to more than 150 million gallons of carbon-neutral blended SAF, according to Drax.
Additionally, per Drax, the agreement could pave the way for future opportunities, as Drax could become a strategic partner in Pathway Energy’s project and supply two additional Pathway SAF project.
Once fully operational, the Pathway plant will be capable of producing 30 million gallons of carbon-negative SAF annually, which is the equivalent of enough fuel to power 5,000 carbon-neutral long-haul (10+ hour) flights per year, per SAF.
Photo of a train containing pellets used to make biomass fuel at the Drag power station near Selby, UK courtesy of Simon Dawson/Bloomberg via BNN Bloomberg.
Pathway will shortly begin Front End Engineering Design and anticipates that it will begin construction on the $2 billion plant in early 2026; commercial SAF production is expected to commence in 2029, according to Drax.
The heads of terms reflect growing global demand for SAF, which usually can reduce carbon emissions by up to 80% when compared to traditional jet fuels; modeling by the International Air Transport Association (IATA), expects the global use of SAF to deliver 65% of the emissions reductions required for the aviation sector to reach net zero by 2050, according to Drax.
Photo of a Drax employee holding wood pellets courtesy of Proactive Investors.
In the future, Drax could also potentially supply biomass to two additional Pathway projects, delivering a further 2 million tonnes of sustainable pellets per year to the business’ sites through the 2030s, according to today’s press release.
Pathway intends to develop a BECCS system on the Port Arthur site which could remove 1.9 million tonnes of carbon dioxide from the atmosphere each year while powering the SAF facility and ensuring the jet fuel is carbon negative.
Drax Group CEO Will Gardiner commented: “This landmark deal has the potential to be the biggest third-party supply arrangement Drax’s pellet business has made. Demand for sustainable biomass is accelerating, with international businesses seeking long-term fuel supplies for a range of projects globally – including sustainable aviation fuel and bioenergy with carbon capture and storage.
“This innovative agreement catalyzes our aligned commitment with Drax to decarbonize the aviation industry and establishes the strategic alignment with Drax to deploy additional projects leveraging proven biomass conversion technologies, sustainable biomass feedstock, and carbon capture and sequestration,” said Pathway Energy Founder and CEO Steve Roberts. “With a global scale supply of CORSIA-compliant biomass material, we are well-poised to address one of the hardest to abate industrial sectors through the production of carbon-negative sustainable aviation fuels.”
