United Airlines has announced a $30 million equity investment in US-based alternative fuels developer Fulcrum BioEnergy, a pioneer in the development and commercialisation of converting municipal solid waste into low-cost sustainable aviation biofuel.

It is the single largest investment by a US airline in alternative fuels.

In addition to the equity investment, United and Fulcrum have entered into an agreement that contemplates the joint development of up to five projects located near United’s hubs expected to have the potential to produce up to 180 million gallons of fuel per year.

“We know alternative fuels is an emerging industry that is vital to the future of aviation and this is just one of our initiatives to help make these fuels saleable and scalable,” said United executive vice president Brett Hart.

“Investing in alternative fuels is not only good for the environment, it’s a smart move for our company as biofuels have the potential to hedge against future oil price volatility and carbon regulations.”

United has also negotiated a long-term supply agreement with Fulcrum and, subject to availability, will have the opportunity to purchase at least 90 million gallons of sustainable aviation fuel a year for a minimum of ten years at a cost that is competitive with conventional jet fuel.

This alternative fuel will be a drop-in fuel that meets all of the airline’s technical requirements and specifications, and will power the aircraft in the same way as conventional jet fuel.

Fulcrum expects its first alternative fuels plant to begin commercial operation in 2017.