Cathay Pacific Airways (0293) announced it is the first airline investor in Fulcrum BioEnergy Inc, a California-based sustainable biofuel developer.
The equity investment is part of the Hong Kong-based airline's biofuel strategy, aimed at helping it achieve a target of carbon-neutral growth from 2020.
Fulcrum is a pioneer in the development and commercialization of converting municipal solid waste into sustainable aviation fuel or biojet fuel.
"We are very pleased to become the first airline investor in this sustainable biofuel developer," said Cathay chief executive Ivan Chu Kwok-leung.
"We are well aware of the impact the aviation industry has on the environment.
"We are pleased to have identified Fulcrum as a strategic business partner that has the necessary vision and technological know-how to help Cathay Pacific pursue the use of biojet fuels.
"These fuels are an important component of our sustainable development strategy, under which we aim to achieve carbon-neutral growth from 2020."
Cathay also has an option for further investment in the sustainable biofuel developer.
The airline has also negotiated a supply agreement with Fulcrum for an initial 375 million US gallons of sustainable aviation fuel over 10 years representing on an annual basis about 2 percent of its current fuel consumption that meets all technical requirements and specifications.
Fulcrum plans to commence construction of its first commercial plant later this year, and to build large scale, waste-to-renewable jet fuel plants at multiple locations including locations strategic to the Cathay Pacific network, primarily in North America.
Fulcrum chief executive Jim Macias said his firm values its strategic relationship with Hong Kong's de facto flag carrier.
" Cathay Pacific shares our vision and plan to bring a whole new source of sustainable fuel to the airline industry," Macias said.