Southwest Airlines has inked an agreement with Red Rock Biofuels to buy 3 million gallons of low carbon renewable jet fuel a year.
The airline said it would be used to power West Coast based aircraft from 2016 when its takes its first delivery.
The blended biofuel is made "using forest residue that will help reduce the risk of destructive wildfires in the Western United States," according to the airline.
Colorado-based Red Rocks Biofuels last week received a $70 million federal grant to construct a $200 million refinery which will be able to turn 140,000 tons of woody biomass into 12 million gallons of renewable liquid fuel per year.
"Our commitment to sustainability and efficient operations led us on a search for a viable biofuel that uses a sustainable feedstock with a high rate of success," said Bill Tiffany, VP of supply chain at Southwest Airlines.
The carrier said it will blend the biofuel with conventional jet fuel and will be used in jets in the Bay Area.
Southwest is a member of industry group, the Commercial Aviation Alternative Fuels Initiative, which works with the government to develop alternative jet fuels for commercial aircraft.