US SAF Market Heats Up With 240,000-Ton Mega Deal

The logistics and clean energy sectors just witnessed one of the most significant sustainable aviation fuel agreements in US history. DHL Express and Phillips 66 closed a three-year deal for 240,000 metric tons of SAF on November 18, 2025, marking a turning point for air cargo decarbonization efforts. The agreement equals roughly 83 million gallons of fuel and will cut lifecycle greenhouse gas emissions by approximately 737,000 metric tons compared to conventional jet fuel.

This isn't just another sustainability pledge. It's a concrete commitment backed by one of the world's largest renewable fuel production facilities and a logistics giant ready to transform its West Coast operations.

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The scale of this agreement positions it among the largest SAF deals ever signed by a US producer specifically for the air cargo sector. For context, the entire US SAF production nearly doubled between December 2024 and February 2025, rising from 22,000 to 44,000 barrels per day. DHL's commitment represents a significant chunk of that expanding market.

Behind the Production: Phillips 66's Rodeo Complex

Phillips 66's Rodeo Renewable Energy Complex in California isn't just another biofuel facility. It's one of the world's largest renewable fuel production sites, completely converted from processing crude oil to handling only renewable feedstocks. The complex now processes waste oils, fats, greases, and vegetable oils to produce 800 million gallons per year of renewable transportation fuels.

The facility's SAF-specific capacity stands at 150 million gallons annually, all produced as neat SAF (meaning it's not pre-blended with conventional jet fuel). According to US Energy Information Administration data, Rodeo is the second-largest capacity renewable fuels facility in the US after Diamond Green Diesel's Norco, Louisiana refinery.

What makes Rodeo particularly noteworthy is its solar infrastructure. The site features California's largest on-site dedicated solar facility, spanning 88 acres and reducing the complex's grid demand by half. This setup avoids 33,000 metric tons of CO2 emissions annually just from the power generation side.

Industry Leaders Weigh In

How DHL Will Deploy the Fuel

DHL Express is taking a practical approach to using this SAF through a book-and-claim system. This method allows the company to account for emissions reductions across its global aviation network even when SAF isn't physically loaded into every aircraft. Most of the fuel will initially flow to LAX, DHL's primary West Coast gateway, with plans to expand deliveries to San Francisco International Airport and other regional hubs where the company operates.

The deal directly supports DHL's GoGreen Plus service, which gives customers a way to reduce their Scope 3 greenhouse gas emissions through SAF use. This matters because supply chain emissions often represent the largest portion of a company's carbon footprint, and actionable solutions have been hard to find.

Why This Timing Matters

Three factors make this deal particularly significant right now:

1. Production Capacity Coming Online: Multiple new SAF production facilities launched in 2024 and 2025, including New Rise Renewables in Nevada and Par Pacific in Hawaii, creating actual supply where there was previously only demand.
2. Policy Support: The Inflation Reduction Act's 45Z Clean Fuel Production Tax Credit provides 35 cents per gallon for SAF production, making projects economically viable that weren't penciling out before.
3. Industry Momentum: Major airlines like United Airlines are investing heavily in SAF and carbon capture technologies, signaling that this isn't a passing trend but a fundamental shift in how the aviation sector operates.

The Bigger Picture for US SAF Growth

The US Energy Information Administration forecasts that "Other Biofuels" output (primarily SAF) will more than double from 2024 to 2025 and grow another 20% by 2026. Even with this growth, SAF will still account for just 2% of total US jet fuel consumption next year. That low percentage highlights both the challenge and the opportunity ahead.

Year	US SAF Production Growth	Key Developments
2024	Baseline establishment	Phillips 66, Diamond Green Diesel complete major expansions
2025	Production doubles	New facilities in Nevada, Hawaii come online; DHL-Phillips 66 deal
2026	20% additional growth projected	SAF reaches 2% of total US jet fuel consumption

DHL has been methodically building its SAF portfolio since 2021, securing partnerships across Europe, the Americas, and Asia-Pacific. This Phillips 66 agreement represents the company's most substantial US commitment to date and aligns with its broader strategy to achieve net-zero greenhouse gas emissions by 2050.

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What This Means for the Clean Energy Sector

Large-scale offtake agreements like this one send a clear signal to investors and developers that SAF demand is real and growing. When a major logistics player commits to 240,000 metric tons over three years, it validates the business case for expanding production capacity. Other producers watching from the sidelines are likely taking notes.

The air cargo sector faces unique decarbonization challenges. Unlike passenger airlines that can sometimes reduce frequency or adjust routes, cargo operations run on tight schedules driven by global supply chains. Sustainable aviation fuel offers a drop-in solution that doesn't require new aircraft or infrastructure, making it the most practical near-term option for emissions reduction.

Looking at the Road Ahead

Several factors will determine how quickly SAF scales from 2% to meaningful market share. Technology improvements continue to drive down production costs. New feedstock sources are being developed, from lignocellulosic biomass to synthetic pathways powered by geothermal energy. Policy support remains crucial, particularly as political landscapes shift.

The formation of the SAF Coalition last year brought together over 60 members spanning oil companies, labor unions, tech startups, and agricultural groups. This broad coalition reflects the economic opportunities SAF creates across multiple sectors and states, many of them traditionally conservative regions where new production facilities are creating jobs.

Phillips 66's Ronald Sanchez, Vice President for Aviation, highlighted the company's competitive advantage: "Our integrated model enables resilience and value creation in the SAF market. Our people, capabilities, and assets allow for feedstock optionality; our supply chain agility accounts for an evolving environment." That flexibility matters as the industry continues to mature and market conditions shift.

The Path Forward

This DHL-Phillips 66 deal represents more than just a fuel purchase agreement. It's a bet on the future of clean aviation, backed by billions in infrastructure investment and supported by evolving policy frameworks. The 737,000 metric tons of avoided emissions equals taking roughly 160,000 cars off the road for a year.

For logistics companies watching this space, the message is clear: SAF supply is becoming reliable enough to support major long-term commitments. For energy producers, the demand signal couldn't be stronger. And for the broader decarbonization effort, aviation finally has a scalable solution that works with existing infrastructure while new technologies like electric and hydrogen aircraft continue development.

The aviation sector's path to net-zero won't be simple or cheap, but agreements like this one show the industry is moving beyond pledges to concrete action. With production ramping up, costs coming down, and major players committing real money, SAF is transitioning from experimental fuel to mainstream option. That shift happened faster than many predicted, and it's only picking up speed.