Drax to supply Pathway Energy 1M tons of biomass pellets annually to proposed SAF plant

In the UK, Drax Group and Pathway Energy LLC have reached heads of terms on a multi-year deal that could see Drax supply over 1 million metric tons of sustainable biomass pellets each year to Pathway’s proposed sustainable aviation fuel (SAF) plant on the US Gulf Coast.

Under a separate agreement, Drax could also become a strategic partner in the project, with a potential investment in the form of a convertible loan note of up to $10 million. No investment decision has been taken by Drax at this stage.

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. Modelling by the International Air Transport Association1, expects the global use of SAF to deliver 65% of the emissions reductions required for the aviation sector to reach net zero by 2050.

Once fully operational, the plant will be capable of producing 30 million gallons of carbon-negative SAF annually, the equivalent of enough fuel to power 5,000 carbon-neutral long-haul (10+ hour) flights per year.

Pathway will shortly begin Front End Engineering Design and anticipates that it will begin construction on the $2 billion plant in early 2026. Following construction, commercial SAF production is expected to commence in 2029.