By Adam Whittaker

Drax agreed to sell biomass pellets to Pathway Energy for use at the company's planned sustainable aviation fuel plant on the U.S. Gulf Coast.

The U.K. renewable energy company said Thursday that it had agreed terms with Pathway to supply over 1 million tonnes of sustainable biomass pellets each year. Drax did not provide financial details of the agreement.

Pathway is a U.S.-based company developing carbon-negative fuels by scaling up existing technologies.

Drax said it signed another agreement with Pathway which could see it become a strategic partner in the project via a convertible loan note worth up to $10 million.

In the future, Drax could also supply biomass to two additional Pathway projects, resulting in an additional 2 million tonnes of sustainable pellets per year to the business' sites throughout the 2030s, the company said.

It expects construction to begin on the $2 billion fuel plant in early 2026, with commercial fuel production starting in 2029. The plant is expected to produce up to 30 million gallons of carbon-negative sustainable aviation fuel per year once fully operational, Drax said.

The fuel from the U.S. plant would be enough to power 5,000 carbon-neutral long-haul flights per year, Drax said.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

December 12, 2024 07:15 ET (12:15 GMT)

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