American Airlines AAL announced an offtake agreement with Aemetis AMTX for 280 million gallons of blended fuel containing sustainable aviation fuel (“SAF”) to be delivered over the seven-year term of the agreement. The value of the agreement is estimated to be more than $1.1 billion.

The agreement is part of American Airlines’ goal of reaching net zero carbon emissions by 2050. The airline, which carries a Zacks Rank #3 (Hold), also has a target to replace 10% of conventional jet fuel with SAF by 2030. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aemetis, carrying a Zacks Rank #4 (Sell), is a renewable fuel company headquartered in Cupertino, CA. The company is expected to begin supplying blended SAF to American Airlines for use starting in 2024. As per international standards, the SAF will be blended with traditional jet fuel at a 40/60 ratio.

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Aemetis aims to transform renewable energy into below-zero carbon intensity transportation fuels. The Aemetis Carbon Zero plant, under development at the former Army Ammunitions Plant in Riverbank, CA, is expected to produce the SAF for American Airlines. The plant is built in a way that it would utilize zero-carbon electricity, carbon-negative hydrogen from waste wood, and renewable oils to produce low-carbon SAF.

American Airlines first took delivery of SAF in mid-2020. By 2023, AAL expects to use 9 million gallons of SAF. Previously, the airline had announced plans to buy up to 10 million gallons of carbon-neutral SAF produced by Prometheus Fuels.

In October, Delta Air Lines DAL had signed an offtake agreement with Aemetis for 250 million gallons of blended fuel containing SAF, to be delivered over a period of 10 years. The estimated value of the agreement is more than $1 billion.

The agreement is part of Delta’s goal of net zero aviation. DAL has a target to replace 10% of its conventional jet fuel consumption with SAF by the end of 2030. Beginning in 2024, Aemetis’ blended SAF is expected to be made available to Delta for use. Delta carries a Zacks Rank #4.

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