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
Climate

AM Briefing: House Cues Up Thursday Passage of GOP Megabill

On a late-night House vote, Tesla’s slump, and carbon credits

House Cues Up Potential Thursday Passage of GOP Megabill
Heatmap Illustration/Getty Images

Current conditions: Tropical storm Chantal has a 40% chance of developing this weekend and may threaten Florida, Georgia, and the CarolinasFrench far-right leader Marine Le Pen is campaigning on a “grand plan for air conditioning” amid the ongoing record-breaking heatwave in EuropeGreat fireworks-watching weather is in store tomorrow for much of the East and West Coasts.

THE TOP FIVE

1. House cues up early morning passage of Trump’s ‘big, beautiful bill’

The House moved closer to a final vote on President Trump’s “big, beautiful bill” after passing a key procedural vote around 3 a.m. ET on Thursday morning. “We have the votes,” House Speaker Mike Johnson told reporters after the rule vote, adding, “We’re still going to meet” Trump’s self-imposed July 4 deadline to pass the megabill. A floor vote on the legislation is expected as soon as Thursday morning.

Keep reading...Show less
Yellow
Sparks

Trump Will ‘Deal’ with Wind and Solar Tax Credits in Megabill, GOP Congressman Says

“We had enough assurance that the president was going to deal with them.”

Donald Trump.
Heatmap Illustration/Getty Images

A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.

Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.

Keep reading...Show less
Politics

Trump Promised Deregulation. His New Law Would Regulate Energy to Death.

The foreign entities of concern rules in the One Big Beautiful Bill would place gigantic new burdens on developers.

Power lines and Trump's tie.
Heatmap Illustration/Getty Images

Trump campaigned on cutting red tape for energy development. At the start of his second term, he signed an executive order titled, “Unleashing Prosperity Through Deregulation,” promising to kill 10 regulations for each new one he enacted.

The order deems federal regulations an “ever-expanding morass” that “imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness.” It goes on to say that these regulations “are often difficult for the average person or business to understand,” that they are so complicated that they ultimately increase the cost of compliance, as well as the risks of non-compliance.

Keep reading...Show less
Blue