(This story was updated at 2:45 p.m. ET with news about FedEx.)
Microsoft is committing to pay extra for freight transportation to cover the cost of using sustainable aviation fuel on flights carrying server racks.
Luxembourg-based Cargolux, the 10th-largest cargo airline by traffic, and Microsoft’s logistics service provider AIT Worldwide Logistics, announced Tuesday that the tech giant has signed a large deal to support the purchase of sustainable aviation fuel, which is three to four times more expensive than conventional jet fuel. The companies said the partnership will save 72,750 tons of climate-warming carbon dioxide over the next three years.
The SAF, produced and delivered by Valero Marketing & Supply Company and its Diamond Green Diesel LLC joint venture, is based on used cooking oil and tallow – without palm oil or any derivatives. The biofuel is added to Cargolux’s fuel supply at George Bush Intercontinental Airport in Houston.
Microsoft will receive green credits for its SAF contributions through a certified registry.
“Collaboration across our supply chain ecosystem is crucial as we continue to drive toward Microsoft’s sustainability goals. By working together to increase the production and use of SAF, we can help to cost effectively drive down emissions and increase the potential for more use of alternative fuels across the transport ecosystem,” Colin Todd, Microsoft’s general manager of cloud manufacturing operations and fulfillment, said in a news release.
Cargolux operates a fleet of 30 Boeing 747-8 and 747-400 freighter aircraft. It has an order with Boeing for 10 next-generation 777-8 freighters to replace aging 747-400s, with deliveries expected to start sometime late this decade.
FedEx
Meanwhile, FedEx on Tuesday announced a deal with Neste secure more than 3 million gallons of blended sustainable aviation fuel for delivery at Los Angeles International Airport.
Through the agreement, FedEx has purchased blended fuel from Neste, to include a minimum of 30% of sustainable avation fuel. As used in its blended form, the fuel will account for roughly a fifth of all jet fuel consumed annually by FedEx at LAX and is the largest SAF purchase by a U.S. cargo airline at LAX to-date, according to FedEx. Delivery of the fuel began earlier this month and will continue over the next year.
“Our aviation network represents the largest amount of FedEx fuel use globally and, as a result, is our biggest opportunity to drive down emissions. As we work toward our goal of carbon-neural operations by 2040, we need the SAF market to continue to grow to meet industry demand,” said Karen Blanks Ellis, chief sustainability officer and vice president of environmental affairs at FedEx, in a news release.
Neste SAF is made from 100% renewable waste and residue raw materials, such as used cooking oil and animal fat waste.
While SAF production continues to grow in the U.S. and internationally, SAF accounted for less than 1% of all global jet fuel production in 2024.
Sustainable fuels can reduce 80% of greenhouse gas emissions compared to fossil-based fuel, although some critics say the life cycle emissions of production and transport to airports can cancel out the benefits.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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