British Airways’ owner IAG has signed a deal with software giant Microsoft for a “large-scale” purchase of sustainable aviation fuel (SAF).

The co-funding deal to purchase 14,700 tonnes of SAF in 2023 will allow Microsoft to make progress in reducing its Scope 3 carbon emissions from business travel and air freight. Microsoft has set the goal of being carbon negative by 2030.

The sustainable fuel will be produced from used cooking oil and food waste by Phillips 66 Limited’s Humber refinery in northern England. IAG said the 14,700 tonnes of SAF would be enough to fuel around 300 Boeing 787 Dreamliner flights between London and Microsoft’s headquarters in Seattle.

Julia Fidler, environmental sustainability fuel and materials decarbonisation lead at Microsoft, said: “Reducing emissions from aviation through decarbonisation efforts such as this, whilst recognising the societal and economic benefits of flying requires increased commitment from all stakeholders

“This agreement represents a new milestone in SAF purchasing that will allow Microsoft to address emissions from both our business travel and freight for our cloud supply chain, while helping to fund future SAF development and scale the market as a whole.”

SAF is seen as being the major component in the aviation industry successfully reducing carbon emissions as the sector aims to reach net-zero by 2050. Using SAF can reduce emissions by up to 80 per cent compared with traditional jet fuel but supplies of SAF are still currently at very low levels and the industry is trying to find ways to ramp up production.

Jonathon Counsell, head of sustainability at IAG, added: “The development of SAF is critical for the long-term decarbonisation of our industry. 

“Strong commercial partnerships like this will help stimulate the global investment needed to build and sustain a commercially viable SAF market. We are pleased to see high profile organisations like Microsoft leading the way.”

IAG, which also owns Iberia, Aer Lingus and Vueling, has already committed to $865 million in future SAF purchases and investments. The airline has the target of using at least 10 per cent SAF for its flights by 2030.

The group is also investing in Nova Pangaea’s waste-to-fuel SAF production facility in the UK.