Loganair Signs 15-Year SAF Deal With ClimaHtech

UK regional carrier Loganair has finalized a 15-year offtake agreement with ClimaHtech Green Flight to secure a long-term supply of Sustainable Aviation Fuel (SAF). The partnership, announced in May 2026, marks a significant step in the airline's effort to meet the UK SAF mandate and advance the decarbonisation of its regional network. By committing to a 15-year purchasing window, Loganair provides the revenue certainty required for ClimaHtech, a subsidiary of CATAGEN, to advance its First-of-a-Kind (FOAK) decentralized production facilities.

The Strategic Shift to Decentralized Production

The agreement focuses on the delivery of both Biomass-to-Liquid (BioSAF) and Electro-Synthetic Aviation Fuel (eSAF). Unlike traditional centralized refinery models, the technology developed by ClimaHtech Green Flight utilizes a modular, decentralized approach. This strategy aims to produce fuel closer to the point of consumption, thereby reducing the logistics costs and carbon footprint associated with transporting fuel to remote regional airports, such as those in the Scottish Highlands and Islands. According to ClimaHtech Green Flight, this model is designed to be highly tolerant of intermittent renewable energy, making it suitable for regional deployment.

Regulatory Compliance and Market Dynamics

The UK Department for Transport (DfT) has established a legally binding trajectory for SAF usage, which requires sustainable fuel to constitute 2% of total fossil jet fuel supply in 2025. This requirement scales significantly, reaching a 10% blending mandate by 2030 and 22% by 2040. For Loganair, this offtake agreement acts as a hedge against the future price volatility of conventional jet fuel while ensuring compliance with these escalating government targets. While the UK mandate is the primary driver, the airline also monitors the ReFuelEU Aviation Regulation, which requires 2% SAF in 2025 but sets a more aggressive long-term target of 70% by 2050.

Technical Analysis: Scaling eSAF and BioSAF

This development reflects a broader industry trend toward Power-to-Liquid (PtL) e-Fuels. As the industry faces limitations in the availability of traditional biological feedstocks like used cooking oil, investment is pivoting toward eSAF, which utilizes renewable electricity, water, and captured carbon dioxide. Historically, the industry has utilized long-term offtake agreements to bridge the gap between emerging technology and commercial scale. In 2016, JetBlue pioneered this approach with a 10-year deal, a precedent that has since been followed by other carriers. The Loganair agreement follows a similar logic to the September 2025 memorandum of understanding between Ryanair, Shell Aviation, and CATAGEN, which helped validate the decentralized technology now being scaled for commercial use.

Despite the optimism, some market analysts and groups such as the Aviation Environment Federation have raised concerns regarding the scalability of these fuels. The reliance on high-volume renewable energy and the potential for feedstock constraints remain significant barriers to achieving the 2030 and 2040 mandates. However, the move by Loganair signals an intent to lock in supply chains before global demand creates further competition for limited sustainable fuel volumes.

What Comes Next: The 2029 Delivery Target

The transition to this new fuel supply is currently scheduled to commence in 2029. Between now and the start of supply, ClimaHtech Green Flight will focus on finalizing project financing and scaling its modular production sites. The 2030 milestone remains a critical regulatory deadline, as the UK's 10% blending mandate will necessitate a significant increase in the availability of sustainable fuels across the regional aviation sector. Stakeholders will be monitoring the facility's progress as a test case for whether decentralized production can effectively compete with traditional fuel supply chains.

Why This Matters for Regional Aviation

For regional airlines, the transition to sustainable fuels presents unique operational challenges due to the smaller scale of their networks and the remote locations they serve. This agreement demonstrates that regional operators are actively seeking to mitigate these risks by securing direct relationships with technology providers rather than relying solely on the open market. By securing a 15-year supply, Loganair is positioning itself to avoid the supply shortages that are expected to hit the aviation sector as national mandates tighten across Europe and the UK.