Global Airline Climate Deal Could Benefit Renewable Fuel Suppliers
The UN's International Civil Aviation Organization on Thursday approved an aviation pollution agreement, according to Reuters. The ICAO's 191 members met and approved the agreement, which will apply to international passenger flights, cargo flights and some business jets.
Under the agreement, airlines are expected to reduce their carbon emissions, first on a voluntary basis during the years 2021 to 2027. The mandatory phase kicks in 2027. Airlines that exceed the set limits would have to purchase carbon credits to offset the growth in emissions.
Gevo, Inc. (NASDAQ: GEVO) CEO Patrick Gruber, Ph.D., told Benzinga via email that the agreement provides to things in his company's favor: a big looming mandate and the potential for airlines to have cost competitive or even cheaper alternatives to oil.
Gruber stated, "We believe that fuels like ours, when built out at full scale would be cost competitive against petro-jet under current U.S. biofuels policy."
Gruber said making the agreement mandatory following an initial voluntary period will give suppliers of renewable fuels the time to build capacity.
Gevo closed Thursday at $0.48.
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