Phillips 66 ( PSX Quick Quote PSX - Free Report) signed an agreement to provide sustainable aviation fuel ("SAF") produced at its Humber refinery to British Airways.
Located in North Lincolnshire, U.K., the Phillips 66 Humber refinery will be the first to significantly produce SAF. It currently produces about 132,000 gallons per day of renewable waste feedstock.
The refinery uses sustainable waste feedstock to produce SAF, which can reduce more than 80% of carbon emissions compared with fossil jet fuels. Phillips 66 will deliver the fuel through its existing pipeline infrastructure that supplies British Airways.
British Airways will be the world's first airline to use SAF, aiming to achieve net-zero emissions by 2050. The airline is purchasing enough fuel to reduce emissions that will power the equivalent of 700 net-zero flights between London and New York, which is still a lower fraction of its total carbon footprint.
The U.K. has the resources and capabilities to be a global leader in the development of SAF and increase production. International Airlines Group (“IAG”), which combines leading airlines in Ireland, Spain and the U.K., is investing $400 million for the next 20 years to develop SAF. British Airways established partnerships with various technology and fuel companies to develop SAF facilities and purchase the fuel.
The latest agreement with British Airways fits well with Phillips 66's strategy to produce fuel from wastes, which will reduce the carbon intensity of its processes. The deal reflects the importance of SAF for the aviation and energy industries, as markets for low-carbon products are growing.
Established in Houston, TX, Phillips 66's operations involve refining, midstream, marketing and specialties, and chemicals.
Zacks Rank & Other Stock to Consider
Phillips 66 currently sports a Zack Rank #1 (Strong Buy).
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