Eight major airlines have agreed to use renewable synthetic diesel fuel for their ground service equipment at Los Angeles International Airport starting in 2012.
Rentech Inc. of Los Angeles will sell as much as 1.5 million gallons a year of its RenDiesel fuel to Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways.
The airlines are all members of the Air Transport Assn. of America Inc., which announced the deal Tuesday along with Rentech. Financial details weren't disclosed.
"This is a real milestone for the company and a real milestone for the airlines that promotes getting alternative fuels off the ground," said Rentech Chief Executive D. Hunt Ramsbottom. "This offers a secure, domestic supply that will take the volatility out of their prices . . . and it's clean."
The company plans to start operations at a plant in Rialto in late 2012 and will then begin sending fuel to Aircraft Service International Group, which will dispense the fuel to airlines for their luggage carts, food trucks and other operations.
The diesel will be produced from "green" waste such as yard clippings and will have minimal greenhouse gas emissions and a small carbon footprint, Rentech said.
The company also has a $90-million plant in Colorado making small quantities of synthetic jet and diesel fuel and a larger project in development in Mississippi that would produce as much as 30,000 barrels a day of the fuels to operate aircraft.
"That's really the issue the airlines are looking for," Ramsbottom said.
Tuesday's LAX deal is a positive development for notoriously polluting airlines and airports, said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies in Sacramento.
"It's a result of the signal that's being sent to the market by the volatility and steady increase of oil prices mixed with the need to take action on climate change," he said.
The renewable-diesel model could be easier for airlines to adopt than other clean energies because it can be used with existing infrastructure, White said. But in some cases, biodiesels have actually caused higher emissions of smog-creating oxides and nitrogen.
"We can't have that trade-off of increased air pollution for decreasing greenhouse gas emissions," he said. "We need to have reductions in both."
Rentech is looking into expanding its diesel business to other airports. Executives said several other airlines intended to either buy fuel from the company or join the agreement.
Rentech's stock leaped $1.11, or 86%, to $2.40.