From the Sea to the Sky: United Invests $5 Million in Algae-based Fuel Producer Viridos

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March 16, 2023

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(United Airlines) Viridos' technology extracts algae oil from algae for potential future production of sustainable aviation fuel; United has invested in more future SAF production than any other airline1; Viridos investment is first by airline's new UAV Sustainable Flight Fund since its launch

United wants to turn microalgae into SAF through the first new investment of its recently announced UAV Sustainable Flight Fund^SM since its launch: algae biofuel company Viridos. This $5 million investment will support the production of sustainable aviation fuel (SAF) made from algae, an abundant and scalable resource that can be grown and harvested without impacting the food supply chain.

Viridos specializes in the bioengineering of microalgae and its proprietary technology accelerates the amount of oil that can produced from microalgae. This algae oil could then be used to scale the future production of SAF.

SAF is an alternative to conventional jet fuel that, on a lifecycle basis, reduces greenhouse gas (GHG) emissions associated with air travel compared to conventional jet fuel alone.¹ SAF is made from used cooking oil and agricultural waste, and, in the future, could be made from other feedstocks, including household trash, forest waste, or algae. To date, United has invested in the future production of over three billion gallons of SAF - the most of any airline in the world.²

"SAF is proven, scalable, and the best tool we have to reduce our carbon emissions from flying, but we face a significant shortage of available feedstock," said United Airlines Ventures President Mike Leskinen. "As the global aviation leader in SAF production investment United remains committed to reaching net zero carbon emissions, without relying on traditional carbon offsets, by 2050. Viridos' algae-based biofuel technology has the potential to help solve our supply problem without the need for farmland or other agricultural resources and marks our inaugural investment in our new cross-industry UAV Sustainable Flight Fund."

Viridos, a biofuel company focused on decarbonizing industries, is leading the bioengineering of microalgae and has already achieved seven times the oil productivity compared to typical wild-type algae. This creates an opportunity for potentially scalable and more sustainable production of algae oil, that could later be used to produce SAF. Based on current estimates, SAF created by Viridos' algae oil is expected to have a 70% reduced carbon footprint on a lifecycle basis when compared to traditional jet fuel.

Viridos' bioengineering technology combines several important and unique attributes contributing to better scalability and sustainability compared with traditional jet fuel production:

Surface area oil productivities of Viridos algae far exceed any traditional oil crop, achieving high algae oil output on comparatively small areas.
Viridos algae are grown in vessels containing seawater. This allows contained deployment in hot and dry locations without taxing scarce freshwater and arable land resources, while eliminating runoff.
Viridos algae have extremely high oil contents facilitating downstream processing to algae oil.
Viridos algae oil is a quality plant oil allowing existing bio-refineries to process the oil with high yield.

"By establishing production sites to grow Viridos-engineered microalgae in saltwater, we are creating the foundation for a biofuel future that moves away from fossil fuels without competing for precious resources such as fresh water and arable land. We are excited to have the support from United Airlines. Together we can build the ecosystem needed to bring algae biofuels to the market," said Oliver Fetzer, Viridos Chief Executive Officer.

About the UAV Sustainable Flight Fund

The UAV Sustainable Flight Fund is a first-of-its-kind investment vehicle that is designed to leverage support from cross-industry businesses in order to support start-ups focused on decarbonizing air travel through SAF research, technology and production. The fund is starting with more than $100 million in investments from United and inaugural corporate partners Air Canada, Boeing, GE Aerospace, JPMorgan Chase and Honeywell. To date, nearly 6,000 United customers have contributed to supplement United's investment in the fund while purchasing tickets.

The Federal Government Recognizes the Value of SAF

The 2022 Inflation Reduction Act includes the largest governmental climate change investments in U.S. history - a new blender's tax credit specifically for SAF along with other critical incentives for clean energy and carbon capture – that will help spur an increase in SAF infrastructure and supply while lowering costs for SAF consumers.

The U.S. military currently uses nearly five billion gallons of jet fuel annually and the Department of Defense will use a jet fuel blend containing at least 10% SAF by 2028 because of the 2023 National Defense Authorization Act.

And according to the U.S. Department of Energy, the country's vast feedstock resources are enough to meet the projected SAF demand of the entire U.S. aviation industry.

United's Commitment to Net Zero Emissions by 2050

United aims to be 100% green by reducing its GHG emissions 100% by 2050, without relying on traditional carbon offsets. In addition to the UAV Sustainable Flight Fund, United has launched a SAF purchasing program called the Eco-Skies Alliance and established a venture fund - United Airlines Ventures - to identify and invest in companies and technologies that can decarbonize air travel. These strategic investments include carbon capture, hydrogen-electric engines, electric regional aircraft and air taxis.

About United

United's shared purpose is "Connecting People. Uniting the World." From our U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C., United operates the most comprehensive global route network among North American carriers. United is bringing back our customers' favorite destinations and adding new ones on its way to becoming the world's best airline. For more about how to join the United team, please visit www.united.com/careers and more information about the company is at www.united.com. United Airlines Holdings, Inc., the parent company of United Airlines, Inc., is traded on the Nasdaq under the symbol "UAL". For further information about our environmental impact, review United's Corporate Responsibility Report and Annual Report on Form 10-K, available at crreport.united.com and ir.united.com. READ MORE

A New Standard: Chevron, United, Breakthrough Energy replace ExxonMobil as Viridos algae biofuels backers (Biofuels Digest)

Breakthrough Energy Ventures Leads $25M Series A for Viridos’ Revolutionary and Sustainable Algae Biofuels -- Viridos’ Algae Biofuels to Decarbonize Jet and Diesel Fuel using Highly Productive, Sustainable, and Scalable Saltwater Algae; Chevron U.S.A. Inc. and United Airlines Ventures Join Viridos Series A (Business Wire)

Viridos receives funding boost for algae biofuels (Biofuels International)

United Airlines wants to turn algae into jet fuel (The Hill)

United Airline’s venture fund makes its launch investment in algae-to-SAF biotech Viridos (GreenAir Online)

Excerpt from Biofuels Digest: News has arrived from California that Viridos, focused on the production of algae biofuels primarily in the form of SAF and renewable diesel, has raised $25M in a Series A equity investment led by Breakthrough Energy Ventures, joined by Chevron and United Airlines Ventures. The funding will be used for R&D to further increase algae oil productivity to reach commercially deployable levels.

The Viridos rationale

Here’s how they put it:

Globally, diesel and jet fuel account for over a third of the liquid fossil fuel used. The heavy transportation sector comprising aviation, shipping, and long-distance trucking relies on these fuels with demand expected to continue to grow for decades, creating major decarbonization challenges. Viridos aims to solve this challenge by leading the bioengineering of microalgae and has already achieved seven times the oil productivity compared to wild algae. This sets the stage for the scalable and sustainable production of algae oil as the feedstock of choice for sustainable aviation fuel (SAF) and renewable diesel (RD). In fact, SAF and RD made from Viridos algae oil are expected to have a 70% reduced carbon footprint.

Now, in English, please

What they are saying is that carbon credits and the trajectory of productivity bring the company to the point where algae fuels make sense. Lately, the value of carbon has reached such levels that fuels, once thought unthinkable, now seem feasible. So, why not vitamins (or the equivalent), as most makers of algae have been pointed at for the past 7 years or so? In the end, there’s no national Low Carbon Everything, Standard, nutraceuticals just have not commended the attention of lawmakers owing to the small markets they command.

When it was about carbon back in the 200s, it was algae fuels, fuels, fuels. Now, carbon is pricey, and it’s fuels, fuels, fuels again. Give Viridos an “attaboy” for persistence, for it is a breakthrough in yield that’s proved as important as the rise in carbon value. Now, they are not there yet, as my father said to me once when I asked five miles into an 800-mile drive “are we there yet?” There’s more R&D, presumably productivity, then the engineering of the process, the design, the build, the commissioning, the securing of offtake, the drive to normal production; indeed we are just a few yards down the pikeway, but sometimes the first yards are the hardest yards of commercialization.

...

Before this investor group there was ExxonMobil, the patient supporter and investor in this technology until recently. Of that, we wrote a few weeks back:

They were against biofuels because they were too low-yield and expensive, until they found algae, which was too low-yield and expensive, but they said they could work on the yields until they were less expensive. They expected to spend up to $500M on the R&D effort, until they stopped at around $320M . Perhaps that’s because they spent something like $160M on algae television commercials.READ MORE