Southwest Airlines partners with Valero to bring sustainable aviation fuel to Chicago Midway International Airport, marking Illinois’ largest SAF supply agreement.
Southwest Airlines Co. has unveiled a new partnership with Valero Marketing and Supply Company (a subsidiary of Valero Energy Corporation, NYSE: VLO) to establish a sustainable aviation fuel (SAF) supply agreement for Chicago Midway International Airport (MDW). This represents the largest SAF supply commitment in the state to date.
Under this two-year agreement, Southwest will initially purchase a minimum of 3.6 million gallons of neat SAF (equating to approximately 12 million gallons once blended) for use in its operations as early as Q4 2024. The agreement also includes an option to increase the purchase up to 25 million gallons of neat SAF (around 84 million gallons blended) during the contract period. Once blended, this could account for up to 35% of the airline’s total jet fuel consumption at MDW, based on last year’s usage.
“Since day one as Governor, I’ve committed to making Illinois a national leader in sustainability and clean energy, which is why I was proud to support a nation-leading SAF tax credit last year that we’ve already seen make an impact on adoption rates in Illinois,” said Governor JB Pritzker. “Our airports are some of the largest and most connected in the country and I’m thrilled that Southwest and Midway International Airport are partnering to expand sustainable fuel use in their flights, an essential step toward a clean energy future.”
The neat SAF is projected to be sourced from waste-based feedstocks such as used cooking oil, animal tallow, and distiller’s corn oil, with an estimated reduction in lifecycle greenhouse gas emissions of 74% to 84% compared to conventional jet fuel. Additionally, the SAF will undergo certification through a CORSIA-approved Sustainability Certification Scheme (SCS) at the batch level, ensuring third-party verification that it meets or exceeds all the criteria outlined in Southwest’s SAF policy.
The neat SAF will be provided by Diamond Green Diesel, a joint venture between a Valero affiliate and Darling Ingredients Inc. This SAF will be blended with Valero’s conventional jet fuel and distributed through existing fuel delivery infrastructure, including the Explorer Pipeline and West Shore’s pipeline network in the Chicagoland area.
“I commend Southwest Airlines for making this significant move forward to bring the first supply of sustainable aviation fuel for its flights out of Midway International Airport,” said U.S. Senator Tammy Duckworth (D-IL). “One of the most important things we can do to make American aviation more sustainable is to dramatically increase the supply of SAF. At the federal level, I’m going to keep pushing to increase the supply of American-grown, American-made SAF from a wide range of feedstocks—a true win-win solution that supports domestic farmers and blenders while reducing our nation’s carbon footprint.”
“As one of the world’s busiest aviation systems, it is critical that Chicago’s airports work together with our airline partners to promote a cleaner, greener future for aviation,” said Commissioner Jamie L. Rhee of the Chicago Department of Aviation (CDA), which owns and operates both O’Hare and Midway international airports. “We are thrilled that Southwest Airlines has chosen Midway International Airport to advance its commitment to sustainability through the use of SAF, and we applaud their leadership team for embracing innovative solutions that will benefit our community, travelers, and the planet for generations to come.”
Scaling SAF will require collaboration across the entire value chain and beyond. This agreement was made possible through the Illinois Sustainable Aviation Fuel Purchase Credit, along with support from Southwest’s valued Corporate Customers participating in the airline’s Scope 3 SAF Program. With this SAF volume, Southwest can further expand access to SAF for its Corporate and Cargo Customers, enabling greater use of sustainable fuel in its operations.
“Today’s announcement marks a milestone in our efforts to utilize more SAF in our operation,” said Michael AuBuchon, Managing Director of Fuel Strategy and Management at Southwest Airlines. “We’re grateful to the state of Illinois for making the Sustainable Aviation Fuel Purchase Credit available to airlines serving Illinois, and we thank our incredible Corporate Customers for supporting our use of SAF, which is a great example of public-private collaboration that we anticipate will help scale SAF and meet our long-term sustainability goals.”
