Microsoft, in climate pledge, to buy jet fuel made with waste oil for Alaska Airlines

Key Points
  • Microsoft said it will purchase jet fuel from waste oils to help offset emissions on its most-traveled business routes.
  • The fuel will be distributed to Alaska Air planes at Los Angeles International Airport.
  • A Microsoft executive said business travel is likely to recover from the pandemic.
A Boeing 737-990 (ER) operated by Alaska Airlines takes off from JFK Airport on August 24, 2019 in Queens, New York.
Bruce Bennett | Getty Images

Microsoft said Thursday it plans to buy alternative jet fuel for some Alaska Airlines flights, the technology giant's latest effort to reduce carbon emissions, this time those generated by its frequent business travel.

The pandemic has devastated air travel demand, particularly for lucrative business trips, but even the maker of the Teams video conferencing app is preparing for a rebound.

"We believe that as we return to the skies, the travel routes we've had ... will resume at the level they had been before," said Judson Althoff, executive vice president of Microsoft's worldwide commercial business. "This gives us the ability to get ahead of all of that because the climate crisis can't wait."

Microsoft pledged in January to become "carbon negative" by 2030, meaning it would remove more carbon from the atmosphere than it emits. Commercial air travel contributes 2% to 3% of global carbon emissions.

"Business travel has been one of the areas that is sort of like the long pole in the tent on trying to solve for sustainability," said Althoff. "It's easy to do certain things in the equation of pursuing being net zero and net negative in carbon, but travel and certainly air travel is one of the more difficult ones."

The fuel, made out of waste oil from sources like cooking, is blended with traditional jet fuel and will be distributed by Amsterdam-based SkyNRG at Los Angeles International Airport.

Microsoft and Alaska declined to say how much the fuel will cost or disclose the volume purchased. Microsoft said it is meant to cover carbon emissions generated from its business travel on the company's most commonly booked routes: from Seattle to Los Angeles, San Francisco and San Jose, California.

Redmond, Washington-based Microsoft is Alaska Airlines' second-largest corporate customer after Amazon.

Airlines including Alaska, JetBlue, Delta and United have recently committed to buying more biofuel for their aircraft, but it's still a small fraction of the total fuel they generally consume and more costly than traditional fuel. Althoff said a goal is to drum up demand for alternative jet fuels so production follows, driving down the price.

Alaska CEO Brad Tilden told CNBC that the Microsoft deal is the first of its kind in the U.S.

"I believe it may well become a template for other business travelers," Tilden said.

The deal, which the companies said could be expanded, was in the works earlier this year, before the coronavirus became a global crisis. The metrics were based off of Microsoft's pre-pandemic business travel.

Althoff said Microsoft employees are currently allowed to travel for customer service, sales and other needs.

Microsoft to become carbon negative by 2030
Microsoft to become carbon negative by 2030