Microsoft is investing $50 million in a LanzaJet plant in Georgia, the US, that will produce jet fuel from ethanol next year, LanzaJet said.
The airline industry is considered one of the hardest to decarbonise. Renewable aviation fuel accounted for less than 0.1 per cent of current global jet fuel demand of about 330 million tonnes in 2019, investment bank Jefferies said last year.
Governments and investors are trying to boost incentives to produce lower-carbon-emitting jet fuel.
LanzaJet, based in Chicago, said it has nearly completed on-site engineering at its Freedom Pines Fuels Biorefinery, with plans to start producing 37.8 million litres of sustainable aviation fuel and renewable diesel a year from sustainable ethanol, including from waste-based feedstocks, in 2023.
Oil majors, airlines and other petroleum trading companies including Suncor Energy, British Airways and Shell are also funding the company.
The White House said last year that it wanted to lower aviation emissions by 20 per cent by 2030, as airlines face pressure from environmental groups to lower their carbon footprint.
The administration of US President Joe Biden has touted tax credits for production of sustainable jet fuel as part of its Build Back Better legislation, which is stalled in Congress.
The EU is aiming to increase the amount of sustainable aviation fuel blended in petroleum jet fuel to 63 per cent by 2050.
Microsoft created the Climate Innovation Fund in 2020 to invest $1 billion over the next four years to speed up the development of carbon removal technology.