• United Airlines and five corporate partners are investing $100 million to launch a fund backing sustainable aviation fuel.
• Joining United are Air Canada, Boeing, GE Aerospace, JPMorgan Chase and Honeywell.
• United will allow some customers to donate to the fund in exchange for 500 United MileagePlus frequent flyer miles.

United Airlines and five corporate partners are launching a venture capital fund to invest in startup firms and technology developing and expanding the availability of sustainable aviation fuel, commonly referred to as SAF. 

The United Airlines Ventures Sustainable Flight Fund will start with $100 million invested by United Airlines, Air Canada, Boeing, GE Aerospace, JPMorgan Chase and Honeywell.

The announcement comes as the aviation industry pushes to cut greenhouse gas emissions in order to meet more restrictive pollution standards.

"This fund is unique. It's not about offsets or things that are just greenwashing. Instead, we're creating a system that drives investment to build a new industry around sustainable aviation fuel, essentially from scratch," United Airlines CEO Scott Kirby said in a release announcing the fund. 

SAF, which is made using feedstocks that include used cooking oil and agricultural waste, is widely viewed as the aviation industry's best option for cutting greenhouse gas emissions. The challenge is figuring out how to increase the supply of SAF while lowering the cost. 

Currently, the supply of SAF is limited and it is typically two to four times more expensive than jet fuel. As a result, airlines looking to cut their greenhouse gas emissions face two hurdles. Many airports do not have a steady, readily available supply of SAF to fuel planes. And if they do, the cost is considerably higher than using jet fuel. The Inflation Reduction Act, signed last year by President Joe Biden, includes a blended fuels tax credit as an incentive for the development and use of SAF.

The United Airlines Ventures Sustainable Flight Fund will allow United and the other inaugural investors the chance to play a larger role in startups developing and expanding access to SAF. Partners in the fund will also be eligible for access to environmental attributes that will go with United's supply of SAF.

Since becoming CEO of United Airlines in May 2020, Kirby has pushed for the development of SAF. Even as United faced substantial losses due to plunging passenger levels when the Covid pandemic devastated demand for travel, Kirby announced his airline would launch a fund to invest in future technologies and sustainability. 

Since then, United Airlines Ventures has invested in startups focused on decarbonization and new fuel sources. In announcing the United Airlines Ventures Sustainable Flight Fund, Kirby reiterated his belief the path to lower emissions requires developing new ideas and technology. "That's the only way we can decarbonize aviation," he said.  

Getting customers involved

While the United Airlines Ventures Sustainable Flight Fund is not open to retail investors, United Airlines is hoping to stoke public interest in its green initiative by allowing some customers to donate to the fund in exchange for 500 United MileagePlus frequent flyer miles. 

The airline's offer will be extended to the first 10,000 customers who choose to donate $1, $3.50 or $7 to the fund. In addition, United is adding a new feature to its website and app that shows customers booking flights what the estimated carbon footprint is of a particular flight. The estimate will be based on aircraft type, flying time, seat capacity and how many passengers, as well as cargo, are on a particular flight. 

United points out the estimate could ultimately differ from the actual carbon footprint once a flight takes place.

How much impact could United customers make on the airline's push to go green?  United estimates that if all 152 million passengers who flew the airline in 2022 donated $3.50 to the United Airlines Ventures Sustainable Flight Fund, it would be enough money to design and build an SAF refinery capable of producing up to 40 million gallons of SAF every year.

– CNBC's Meghan Reeder contributed to this article.