International Airlines Group (IAG) and Microsoft have extended their co-funded agreement to purchase sustainable aviation fuel (SAF) by five years, as both companies intensify efforts to cut lifecycle carbon emissions in the aviation sector.
The renewed agreement will see Microsoft co-fund an additional 39,000 metric tonnes of SAF, expected to reduce lifecycle carbon emissions by approximately 113,000 metric tonnes. This represents the largest and longest-running SAF agreement targeting Scope 3 emissions to date, according to publicly available data.
Scope 3 emissions refer to indirect emissions across a company’s value chain, including those produced from business travel. By co-investing with its corporate clients, IAG can increase SAF procurement to reduce its Scope 1 emissions, while partners such as Microsoft address their Scope 3 emissions from air travel and cargo operations.
As part of the agreement, Microsoft will also fund SAF used by IAG’s airlines to transport data centre components via its freight partners. The collaboration contributes to Microsoft’s broader sustainability objectives, including its pledge to become carbon negative by 2030.
Jonathon Counsell, IAG’s Group Sustainability Officer, commented: “We’re pleased to work with like-minded organisations such as Microsoft to expand efforts to reduce flying lifecycle emissions. Long-term agreements help encourage much-needed funding in SAF production, something that IAG is championing through our investment in global SAF projects such as LanzaJet.”
Julia Fidler, Environmental Sustainability Lead at Microsoft, added: “We are taking our collaboration with IAG further, extending our SAF purchase agreement to bring Microsoft closer to our goal of being carbon negative by 2030, while ensuring a multi-year commitment to help drive greater SAF production.”
The SAF will be sourced from two facilities: used cooking oil and food waste will be processed at Phillips 66’s Humberside refinery in the UK, while sustainably sourced bioethanol will be converted into jet fuel at LanzaJet’s Freedom Pines Fuels plant in Georgia, USA. Both fuels are certified by the International Sustainability & Carbon Certification (ISCC).
By the end of 2024, SAF accounted for 1.9% of IAG’s total fuel use. The Group’s total SAF-related expenditure, including future commitments, now exceeds $3.5 billion. IAG continues to advocate for government policies that support scale-up and investment in SAF technologies.
Microsoft has also backed the SAF sector through its $1 billion Climate Innovation Fund, which has invested in LanzaJet, the operator of the world’s first commercial-scale alcohol-to-jet fuel facility. The plant is expected to supply SAF to British Airways.
