LOS ANGELES, CALIFORNIA — FedEx announced on July 14, 2025, a significant agreement with Neste to procure more than three million gallons of blended sustainable aviation fuel (SAF) for operations at Los Angeles International Airport (LAX). Deliveries commenced earlier in July and will span the next year, with the blend incorporating at least 30% neat Neste MY SAF. This volume equates to roughly one-fifth of FedEx’s projected fiscal year 2025 jet fuel consumption at LAX, positioning it as the most substantial SAF uptake by a U.S. cargo carrier at this major hub.
In the broader SAF market context, where production represented less than 1% of global jet fuel in 2024, this deal exemplifies how large logistics operators are driving demand to spur supply chain maturation. FedEx’s aviation network, its primary fuel consumer, offers the greatest emissions reduction leverage, aligning with the company’s 2040 carbon-neutral goal. The firm has already achieved a 30% reduction in aviation emissions intensity from a 2005 baseline through fleet upgrades, fuel optimization, and planning efficiencies. Neste’s SAF, derived from renewable wastes like used cooking oil, can cut lifecycle greenhouse gas emissions by up to 80% versus conventional jet fuel under CORSIA methodologies, providing a drop-in solution without infrastructure overhauls.
“Procuring SAF is an important component of our aviation emissions-reduction strategy in the coming years, and we are pleased to have executed a deal with Neste to begin using this fuel in our air operations,” said Karen Blanks Ellis, chief sustainability officer and vice president of Environmental Affairs at FedEx.
Stakeholders in the cargo sector stand to benefit from this precedent, as it signals viability for scaling SAF in high-volume operations. However, challenges persist: SAF’s premium pricing—often 3-5 times higher than traditional fuel—necessitates policy incentives like U.S. tax credits under the Inflation Reduction Act to bridge affordability gaps. For Neste, a leading SAF producer, the agreement reinforces its U.S. market foothold, potentially encouraging expansions in domestic refining capacity amid projections for SAF demand to reach 10% of aviation fuel by 2030 per IATA estimates. Yet, feedstock constraints and competition from other biofuels could hinder rapid growth, emphasizing the need for diversified supply chains.
This deployment also builds on FedEx’s prior innovations, including the 2018 Boeing ecoDemonstrator program testing 100% SAF flights. For aviation decarbonization, such commitments could influence peer adoption, fostering collaborative procurement models to aggregate demand and reduce costs. Overall, the deal highlights SAF’s role in bridging the gap to electrification and hydrogen, offering immediate emissions cuts while long-term technologies mature.
Source: FedEx Newsroom, “FedEx Takes Delivery of Sustainable Aviation Fuel (SAF) from Neste at LAX”, July 14, 2025.
