Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate Tech

United Airlines Bets on Heirloom’s Direct Air Capture

The airline is making an investment with an eye toward one day producing jet fuel from the captured carbon.

An airplane and carbon capture.
Heatmap Illustration/Getty Images

Like so many other businesses in the aviation sector, United Airlines is largely banking on sustainable aviation fuel to power its transition to net-zero emissions. Now the company’s VC arm, United Airlines Ventures, is taking a bet on direct air capture to help produce this fuel using carbon extracted straight from the atmosphere. Today, UAV’s Sustainable Flight Fund announced an equity investment in legacy DAC player Heirloom. This builds on Heirloom’s recent $150 million Series B funding round and will allow the fund to purchase up to 500,000 tons of CO2 removal from Heirloom, either to produce sustainable fuel or to sequester permanently underground. (The two companies didn’t disclose the size of the latest investment.)

Right now, producing green jet fuel — whether via biomass or captured carbon — is much more expensive than producing jet fuel the standard way, by refining crude oil. And making sustainable fuel using direct air capture, which usually costs upwards of $600 per ton of CO2 removed, would likely be the most costly method possible. DAC-based SAF might not make economic sense for a decade or more, which is why the fund is waiting to see where the carbon removal market goes in the coming years before finalizing its carbon removal purchase.

While there are well over 100 direct air capture companies at this point, UAV’s managing director, Andrew Chang, told me that United took a bet on Heirloom because the company has secured contracts with major buyers such as Microsoft and Frontier. It also has a flexible business model that allows it to either sequester carbon underground or use it as an input to make valuable end products such as SAF.

“They've demonstrated an early ability to go out and get some of these paying customers for that CO2 offtake,” Chang said. “They have a working pilot plant out in California that we visited, and they're planning to do their next scale-up facility in the Gulf Coast region, probably. So there's a lot of tangible points that the company has demonstrated.”

While the Heirloom investment represents United’s first foray into direct air capture, it isn’t the airline’s first rodeo when it comes to carbon removal. The Sustainable Flight Fund, which launched in 2023, has also invested in Svante, which makes filters and machines for carbon capture, and Banyu Carbon, which seeks to remove excess CO2 from the ocean. Altogether, the fund totals over $200 million in investments, about a third of which comes from United itself and the rest from its corporate partners, which include Air Canada, JetBlue Ventures, Google, and Bank of America. This means that Heirloom’s carbon removal credits wouldn’t accrue specifically to United, but rather to the fund itself.

“We're not smart enough to know what the silver bullet is,” Chang told me of the fund’s diversified approach to sustainable fuel investments. UAV has also backed hydrogen companies, an algae-based biofuel company, and companies making fuel using cooking oil, fats and grease. “I actually don't think there is a silver bullet. I think you need to run as hard as you can across all possible alternatives.”

Right now, only about 0.1% of United’s fuel is sustainably made. In order for the airline to reach its 2035 goal of decreasing carbon intensity by 50%, that number needs to ramp astronomically in the coming decade. And that also has to happen without raising the cost of flights for consumers, which Chang told me is simply not an option.

“You have higher prices, people are going to fly less, or we're going to go out of business,” Chang said. As he’s been told, United will not pay a premium for SAF. Thus, this fuel must be subsidized by other players, which can include large corporate customers eager to address emissions from their employees’ business travel or fuel companies that produce SAF simply as a byproduct.

“People are chasing higher value, higher volume products — gasoline, diesel, naphtha,” a petroleum-derived liquid used as a feedstock for fuels and petrochemicals — “what have you. No one optimizes for jet,” Chang explained. He doesn’t think producing SAF alone is a viable business model, which is why he views Heirloom’s multiple potential revenue streams as an attractive option for UAV’s portfolio. As he told me, “The best way for you to have a chance to execute on SAF commercialization and production is to not focus on that exclusively.”

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Decarbonize Your Life

Tariffs Will Flatten the U.S. Bicycle Industry

Businesses were already bracing for a crash. Then came another 50% tariff on Chinese goods.

An e-bike and money.
Heatmap Illustration/Getty Images

When I wrote Heatmap’s guide to driving less last year, I didn’t anticipate that a good motivation for doing so would be that every car in America was about to get a lot more expensive.

Then again, no one saw the breadth and depth of the Trump administration’s tariffs coming. “We would characterize this slate of tariffs as ‘worse than the worst case scenario,’” one group of veteran securities analysts wrote in a note to investors last week, a sentiment echoed across Wall Street and reflected in four days of stock market turmoil so far.

Keep reading...Show less
Green
Economy

Tariffs Are Making Gas Cheaper — But Not Cheap Enough

Any household savings will barely make a dent in the added costs from Trump’s many tariffs.

A gas station.
Heatmap Illustration/Getty Images

Donald Trump’s tariffs — the “fentanyl” levies on Canada, China, and Mexico, the “reciprocal” tariffs on nearly every country (and some uninhabited islands), and the global 10% tariff — will almost certainly cause consumer goods on average to get more expensive. The Yale Budget Lab estimates that in combination, the tariffs Trump has announced so far in his second term will cause prices to rise 2.3%, reducing purchasing power by $3,800 per year per household.

But there’s one very important consumer good that seems due to decline in price.

Keep reading...Show less
Green
Electric Vehicles

There Has Never Been a Better Time for EV Battery Swapping

With cars about to get more expensive, it might be time to start tinkering.

A battery with wheels.
Heatmap Illustration/Getty Images

More than a decade ago, when I was a young editor at Popular Mechanics, we got a Nissan Leaf. It was a big deal. The magazine had always kept long-term test cars to give readers a full report of how they drove over weeks and months. A true test of the first true production electric vehicle from a major car company felt like a watershed moment: The future was finally beginning. They even installed a destination charger in the basement of the Hearst Corporation’s Manhattan skyscraper.

That Leaf was a bit of a lump, aesthetically and mechanically. It looked like a potato, got about 100 miles of range, and delivered only 110 horsepower or so via its electric motors. This made the O.G. Leaf a scapegoat for Top Gear-style car enthusiasts eager to slander EVs as low-testosterone automobiles of the meek, forced upon an unwilling population of drivers. Once the rise of Tesla in the 2010s had smashed that paradigm and led lots of people to see electric vehicles as sexy and powerful, the original Leaf faded from the public imagination, a relic of the earliest days of the new EV revolution.

Keep reading...Show less
Green