Southwest Airlines sells renewable fuel unit amid industry shift on climate goals

The sale comes amid a broader industry trend where airlines are scaling back their climate commitments. In July 2024, Air New Zealand abandoned its Science Based Targets initiative (SBTi) goal to cut emissions by nearly 29% from a 2019 baseline due to challenges with aircraft availability and SAF supply as well as limited political support. By May 2025, Air New Zealand shifted from specific targets to tracking progress because of technological hurdles and uncertainty.

The aviation sector overall faces slow progress in adopting SAF. The International Air Transportation Association (IATA) has said reaching net-zero CO2 emissions by 2050 will require multiple strategies: replacing conventional jet fuel with SAF would account for about two-thirds of the reduction needed; offsets and carbon capture would contribute nearly one-fifth; new technologies like hydrogen or electric planes would make up another portion; infrastructure improvements would play a smaller role.

SAF adoption remains limited due to high costs and scalability issues. In some regions such as the UK, most SAF is made from used cooking oil—much of which is imported from Asia—raising questions about the actual environmental benefit when considering shipping-related emissions.

Sir Dieter Helm, professor of economic policy at the University of Oxford, told the BBC: “It's very hard to think there is such a thing as a sustainable aviation fuel. There are aviation fuels that are less polluting than those currently used, and you can use elements of biofuel and chip fat and so on.”

Southwest Airlines operates as a low-cost carrier with hubs across major U.S. airports including Baltimore/Washington International Thurgood Marshall Airport and Dallas Love Field. Founded in 1967 and led by CEO Robert Jordan, it continues to serve customers throughout the United States under IATA/ICAO code WN/SWA.