By Sam Boughedda
Investing.com -- Delta Air Lines Inc (NYSE:DAL) and Gevo Inc (NASDAQ:GEVO) announced Tuesday an agreement that will see Gevo supplying 75 million gallons of sustainable aviation fuel (SAF) a year for seven years to Delta.
Shares of Delta rose 2.5% and Gevo traded up 1.8%.
Gevo said the deal will generate approximately $2.8 billion of revenue over the seven years for the company. The agreement replaces a previous deal from Delta in 2019 to purchase 10 million gallons a year.
Delta's has committed to incorporating SAF into its operations as it works toward its net-zero goals.
"Delta makes for a great customer, recognizing that big change is needed," said Patrick Gruber, Gevo's CEO.
"Net-zero jet fuels matter. We expect production from our first Net-Zero plant to begin in 2025," Gruber added.
The company said it will now need to develop and build more than one net-zero plant, with the agreement subject to conditions that include Gevo developing, financing, and constructing one or more production facilities to produce the amount of fuel set out in the deal.