Microsoft and IAG sign largest Scope 3 sustainable aviation fuel deal

Microsoft and International Airlines Group expanded their Sustainable Aviation Fuel agreement by five years, the largest and longest corporate-airline SAF deal to date covering 39,000 tonnes of fuel. The agreement targets hard-to-abate Scope 3 aviation emissions while helping scale SAF supply.

Microsoft and International Airlines Group announced a five-year expansion of their Sustainable Aviation Fuel agreement, the largest and longest-running deal of its kind between a corporate buyer and an airline. Microsoft will co-fund 39,000 tonnes of SAF, projected to reduce 113,000 tonnes of lifecycle carbon emissions, targeting Scope 3 emissions spanning business travel and freight. The SAF will be produced by Phillips 66's Humberside refinery in the UK using used cooking oil and food waste, and LanzaJet's Freedom Pines Fuels plant in the USA, both certified by the ISCC.

Corporate buyers tackling Scope 3 emissions and airlines scaling clean fuel are the primary actors affected, with the deal serving as a market-making mechanism. SAF remains expensive and underproduced, so long-term contracts help stabilize demand and give fuel producers confidence to scale supply. Microsoft, pursuing carbon-negative status by 2030, has invested through its $1 billion Climate Innovation Fund in SAF innovators including LanzaJet. IAG has now invested more than $3.5 billion in SAF, with sustainable fuel making up 1.9% of its total fuel usage in 2024.

Companies seeking to address aviation-linked Scope 3 emissions should watch this deal as a template for long-term SAF offtake agreements that stabilize demand and unlock production scaling. Aviation accounts for roughly 2-3% of global emissions and remains one of the hardest sectors to decarbonize, making voluntary corporate leadership potentially pivotal where regulation has struggled. Observers should monitor whether more corporate-airline partnerships follow, and how SAF production capacity at facilities like LanzaJet's alcohol-to-jet plant expands to support broader business-travel and logistics decarbonization commitments.

Key figure — SAF volume: 39,000 tonnes co-funded, projected to cut 113,000 tonnes of lifecycle emissions