United Airlines on Tuesday announced it has committed to buy at least 15 million gallons of cleaner-burning renewable jet fuel from a Los Angeles-based refinery, marking a potentially major breakthrough in the commercial aviation industry’s quest to pare carbon dioxide emissions.

United is planning to use the advanced biofuel on flights out of its Los Angeles hub beginning next year.

Under the deal, AltAir Fuels will retrofit idled portions of a Los Angeles petroleum refinery to produce the low-carbon renewable jet fuel and other products from non-edible natural oils and agricultural wastes. Once the project goes online, it is expected to be the first refinery in the nation capable of in-line production of both diesel and drop-in replacements for petroleum-based jet fuels.

“This project demonstrates the practical efficiencies these fuels allow by fully integrating into an operating petroleum refinery,” said AltAir’s president Bryan Sherbacow in a statement. “The industry is delivering on the promise of commercial production of advanced biofuels that move beyond additives, like ethanol and biodiesel, to drop-in replacement low-carbon fuels.”

AltAir will produce the biofuel using technology developed by Honeywell UOP. The product is engineered to provide the same performance as conventional, petroleum-based jet fuel, allowing it to be dropped in to existing equipment and used by factory-standard engines without modifications. According to United, the renewable jet fuel supplied by AltAir is expected to slash greenhouse gas emissions in half over its entire lifecycle, from production to combustion.

Jimmy Samartzis, United’s managing director for global environmental affairs and sustainability said the agreement underscores the company’s commitment “to be a leader in alternative fuels.”

United did not say the value of the deal with AltAir, but the company said it was buying the advanced biofuel at a price competitive with traditional, petroleum-based jet fuel.

AltAir expects to have the capacity to produce 30 million gallons of advanced biofuels and chemicals per year from the Los Angeles refinery, after retrofits are complete.

AltAir’s CEO Tom Todaro called the development a major breakthrough.

“We cannot overestimate how important this milestone is for the commercialization of sustainable aviation biofuels,” Todaro said in a statement.

With AltAir’s retrofits, the Los Angeles refinery is set to become the first commercial-scale producer of renewable jet fuel in the world.

David Holt, president of the Consumer Energy Alliance, praised the venture. “As a large consumer of energy, the airline industry understands the need for an all of the above approach to energy production and the new United-led effort is a step in the right direction to help diversify sources of domestic energy supply for travelers and shippers,” Holt said.

United’s announcement comes on the heels of similar moves by other airlines, as the industry seeks to trim its emissions. Last month, Airbus SAS and Air Canada agreed to work with BioFuelNet Canada on studying options for producing biofuel for use in the sky.

Separately, the Pentagon has been exploring ways to use renewable fuel to power planes, ships and tanks. The Pentagon’s chief purchaser has signed a contract with Gevo for the Army to buy 3,650 gallons of renewable jet fuel from Gevo, following a successful test flight in June 2012.

Four years ago, the International Air Transport Association pledged to cut its carbon dioxide emissions in half by 2050, based on 2005 levels. The Sustainable Aviation Fuel Users Group, which includes United as a member, also has pledged to pursue drop-in biofuels for aviation.