BP p.l.c. (BP) shares dipped in premarket trading Wednesday after the energy giant announced a new joint venture that's all about turning crops into cleaner fuel. The company is partnering with Corteva, Inc. (CTVA) on a 50-50 deal to produce crop-based oils from canola, mustard, and sunflower—feedstocks that'll eventually become sustainable aviation fuel (SAF) and renewable diesel (RD).

The venture, called Etlas, is basically marriage counseling for two industries that don't always see eye to eye. Corteva brings seed technology expertise, while BP handles the refining and fuel marketing muscle. Together, they're aiming to serve the commercial transportation market, which is desperately hunting for ways to decarbonize.

The Numbers Behind the Plan

Etlas is targeting production of 1 million metric tonnes of crop-based feedstock annually by the mid-2030s. That translates to over 800,000 tonnes of biofuel—enough to make a meaningful dent in the aviation and trucking sectors. Initial supply should arrive in 2027, supporting both co-processing at traditional refineries and dedicated biofuel facilities.

The timing makes sense when you look at where the market's headed. Global demand for SAF is expected to skyrocket from around 1 million tonnes in 2024 to 10 million tonnes by 2030. Renewable diesel isn't far behind, projected to grow from approximately 17 million tonnes to 35 million tonnes over the same period.

Farming Without the Guilt

Here's the clever part: the feedstock will come from crops grown on existing farmland between main food crops. Think of it as agricultural multitasking. This approach improves soil health and gives farmers a new revenue stream without requiring additional land use. No need to bulldoze forests or compete with food production.

Judd O'Connor, executive vice president of Corteva's seed business unit, framed it this way: "By helping found Etlas, Corteva continues to deliver on two critical parts of our mission: to help fuel the world and to support farmers. Agriculture is part of the solution, and we are excited to see Etlas come to life."

Philipp Schoelzel, senior vice president of biofuels growth at BP, emphasized the financial upside: "This capital light joint venture creates optionality in our biofuels value chain, strengthening our position and helping deliver attractive returns."

Portfolio Reshuffling Continues

This announcement comes on the heels of BP's recent portfolio streamlining. Last month, the company sold a 65% stake in its Castrol lubricants business for about $10.1 billion, generating approximately $6 billion in net proceeds to help reduce debt.

BP} shares were down 1.19% at $33.95 during premarket trading on Wednesday.