Drax to expand US business with deal to supply wood pellets to Texas SAF startup

Article by Sam Baker

Drax

BRITISH-based power generator Drax has agreed the terms of a deal to supply wood pellets to a US sustainable aviation fuel (SAF) startup.

Under the deal, Pathway Energy will buy over 1m t of wood pellets per year from Drax to power its SAF production in Port Arthur, Texas, from an expected launch date in 2029, with construction expected to begin in 2026. Drax primarily sources its wood pellets from the southern US, as well as Europe, Canada and South America.

Pathway CEO Steve Roberts confirmed “there is no intention to run the facility” before integrated carbon capture and storage (CCS) is active, promising to produce “ultra negative” SAF capturing more carbon than is emitted over the fuel’s life cycle.

Pathway aims to produce 30m gallons of carbon negative SAF per year, which the company calculates can be blended with conventional jet fuel to produce 150m gallons of carbon neutral fuel.

Will Gardiner, CEO of Drax group, said the agreement with Pathway is “an important step in the energy transition and for decarbonising the aviation sector through sustainable aviation fuel production”.

Barking up the wrong tree

Wood pellet-fuelled power generation has become controversial in recent years because it releases more greenhouse gases than burning fossil fuels. This is due to wood's lower energy density, which means a greater mass of fuel is required. A report by energy think tank Ember found that while wood burning only accounted for 5% of the UK’s power generation in 2022, it contributed a fifth of the sector’s total greenhouse gas emissions that year.

The Drax power station in North Yorkshire has come under fire in recent years for being the UK’s largest greenhouse gas emitter, releasing 11.5 t CO2e in 2023 with no plans to begin CCS until 2030, while receiving £539m (US$663m) in government sustainability subsidies in 2023. Wood pellets are nonetheless the most energy dense biofuel and, depending on how the wood is sourced, is considered carbon neutral.

Roberts told TCE that Pathway opted to use wood pellets in its SAF production as it is “an ideal feedstock for the gasification process”, adding that it is “definitively sustainable”, particularly when sourced from “well-managed forests”.

Roberts told TCE that Drax was their favoured supplier owing to its claimed sustainability credentials, saying “there is a huge amount of work to ensure that their products are sourced sustainably”. However, the Financial Times reported last October that internal emails revealed Drax was “highly likely” to have sourced wood from old, environmentally important forests in Canada.

The company has pledged to audit its wood supply chain.

The deep SAF

SAF is defined as having net emissions at least 10% lower than typical kerosene fuel, although some SAFs can achieve 94% reductions. The paraffinic kerosene SAF produced at Pathway’s Texas facility will be blended with conventional fuel at around a 50-50 ratio, which the company calculates will have overall zero carbon emissions.

In the EU, SAF will have to account for 5% of all fuel in European airports by 2030, while the equivalent mandate in the UK will be 10%.

A recent report found that despite increasing SAF uptake, growth in the aviation sector is predicted to cause emissions to continue rising until the 2040s.  

Drax’s decision to partner with Pathway comes after the British company earmarked US$12.5bn last year to invest in its US business Elimini, based in Houston, Texas. Meanwhile, the company’s future in the UK hangs in the balance as they await the government’s decision on whether to continue subsidising them beyond 2027.

Correction: The original version of this article incorrectly stated that Pathway will produce "150m t of carbon neutral fuel". This has now been corrected to read "150m gallons of carbon neutral fuel". 

Article by Sam Baker

Staff reporter, The Chemical Engineer

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