United Continental said it has invested US$30m in alternative-energy provider Fulcrum BioEnergy in a move that could produce jet fuel from waste. Fulcrum, which is backed by Waste Management, converts household trash into renewable jet fuel.
It has tried to go public, but ended up scrapping its plans for an IPO. Its first alternative fuels plant will begin operation in 2017. United executive VP Brett Hart said investing in biofuel has “the potential to hedge against future oil price volatility and carbon regulations.” As part of the deal, United and Fulcrum will develop up to 5 projects that are expected to produce up to 180m gallons of fuel a year. United can also buy at least 90m gallons of fuel from Fulcrum over a decade at a “cost that is competitive with conventional jet fuel.” United is in the midst of trimming expenses, and swung to a profit in its most recent quarter, as traffic and revenue per seat mile both grew.
(Source : Wall Street Journal, June 30, 2015)