British power generator Drax has taken a significant step into the sustainable aviation fuel (SAF) market, securing a long-term agreement to supply over 1 million tonnes of wood pellets annually to US-based SAF startup Pathway Energy. This partnership, set to commence production in 2029, positions Drax at the forefront of the energy transition and the push towards decarbonising the aviation sector.
Pathway Energy’s planned facility in Port Arthur, Texas, will rely on Drax’s sustainably sourced wood pellets to produce 30 million gallons of carbon-negative SAF per year. This fuel will be blended with conventional jet fuel to deliver 150 million gallons of carbon-neutral aviation fuel. Pathway CEO Steve Roberts has emphasised the company’s commitment to environmental responsibility, stating that operations will not commence until integrated carbon capture and storage (CCS) is in place, ensuring their SAF captures more carbon than it emits throughout its lifecycle.
Drax CEO Will Gardiner described the agreement as a crucial milestone for the transition to cleaner energy, highlighting the potential of SAF to play a key role in reducing emissions within the aviation industry. The collaboration with Pathway comes as Drax continues to expand its presence in the US market, with substantial investments in its Houston-based subsidiary Elimini.
Despite the promise of sustainable fuels, the use of wood pellets remains contentious. Critics argue that wood-based energy can release more greenhouse gases than fossil fuels due to wood’s lower energy density. A 2022 report by energy think tank Ember noted that while wood burning contributed just 5% of the UK’s power generation, it was responsible for 20% of the sector’s total emissions. Drax’s North Yorkshire power station has been a focal point of scrutiny, emitting 11.5 million tonnes of CO2 equivalent in 2023 while receiving substantial government subsidies. The company, however, maintains that its wood pellets are the most energy-dense biofuel and, when sourced correctly, can be carbon neutral.
Roberts has defended Pathway’s decision to use wood pellets, citing their suitability for the gasification process and their sustainability when sourced from responsibly managed forests. Drax’s supply chain has faced past criticism, with reports suggesting that some wood may have been harvested from ecologically valuable Canadian forests. In response, Drax has pledged to audit and improve its sourcing practices to ensure sustainability.
SAF is widely seen as a crucial component of aviation’s decarbonisation efforts. While SAF must achieve at least a 10% reduction in emissions compared to traditional kerosene, some formulations can reduce emissions by up to 94%. The EU has mandated that SAF comprise at least 5% of all aviation fuel by 2030, while the UK’s target is set at 10%. However, projections indicate that rising aviation demand will continue to drive emissions growth into the 2040s, despite increasing SAF adoption.
As Drax deepens its commitment to the US market with a $12.5 billion investment, its future in the UK remains uncertain. The company is awaiting a government decision on whether it will continue receiving subsidies beyond 2027. With mounting pressure to prove the sustainability of its operations, Drax’s partnership with Pathway represents both an opportunity and a challenge in the evolving clean energy landscape.
Drax Group plc (LON:DRX), trading as Drax, is a power generation business. The principal downstream enterprises are based in the UK and include Drax Power Limited, which runs the biomass fuelled Drax power station, near Selby in North Yorkshire.
