Sustainability

Transcript

Ian Heywood:Good afternoon, everybody. Anybody that knows me knows that I'm not an expert on this subject, and that's most probably quite a good thing because hopefully we can try to get some clarity, because one thing I have learned Is that there's clearly an unwritten rule that no sustainability report can be less than 1 inch thick. And also, you know, there is— it is just all over the place. So today we're going to try and bring some clarity. Fortunately, I do have a complete panel of experts. And what we're going to do is I'll let them introduce themselves. Then I think we've got 5 topics after discussing and preparing for this panel that seem to come to the forefront, and we'll talk about those individually. So, Ali, if you'd like to start off.

Al Gayward:Yeah, sure. I'm Ali Gaywood, UK Country Manager for easyJet. I'm not going to tell anybody how long I've been in the travel industry, but I've been with easyJet for around 13 years. But I also manage a number of overseas countries, including Gibraltar, so I do want to extend my personal thanks to the Minister and his team for hosting us here.

Peter Semes:Well, my name is Peter Smeets. I'm CEO of 360 Aircraft Finance in Frankfurt, but Even more important here, I'm board member and founding member of IMPACT. That is, that is a nonprofit organization for sustainable aviation growth, and we have round about 35 members coming from the finance industry.

Jonathon Counsel:Great. Yeah, good morning everybody. Jonathan Council, Group Head of Sustainability, International Airlines Group. So for those that don't know, we're the owners of British Airways, Iberia, Vueling, Aer Lingus, and LEVEL. So we've got about 580 aircraft, 60,000 employees, and happy to say we're, we're back into profitability, which feels very good. Yeah, and it's great to be here. My first CAPA event was in Manchester earlier this year, and I have to say this feels like a real upgrade. It's a great location, so congratulations to CAPA. So, but yeah, very excited to get into some of the detail, particularly on sustainable aviation fuels.

Johan Edinager:Yeah, hi, my name is Johan Eidehaug and I'm the Chief People and ESG Officer at Wizz Air. I've been at Wizz Air for 8 years now. I love this subject, it's going to be great to debate and discuss it. I mean, it is probably one of the most interesting and most important projects which is— I usually teach an event for Wizz employees, cabin crew, pilots, etc., and I always tell them this is the most important important training you've ever done because, I mean, if there's one thing that impacts aviation, it's really sustainability and probably what's going to have the biggest change and the possibility to change the world.

Al Gayward:Haldane?

Haldane Dodd:Absolutely. Hello, everybody. Haldane Dodd. I'm Executive Director of the Air Transport Action Group. I don't know if that's me or not. So our organization brings together all the different parts of the aviation industry Looking at the long term, how do we evolve our industry to be more sustainable into the future? How do we make sure that we're all working towards the same overall goals? And how do we make others in our value chain, other stakeholders, join us in that process as well— governments, the energy industry, finance industry, and so forth? So really great to be with you today.

Ian Heywood:Thank you. As Jonathan said at the beginning today, his 2 most important numbers was zero by 2050. And one of the things, although people have got their— particularly the 3 airlines can talk about themselves— what I do want to look at is the whole industry. How is the industry going to get to zero by 2050? Some individual airlines have got their plans. Has the whole industry, and is it possible? possible. So talking to everyone, there's these 5 topics, and I am aware that the purists will say that offsetting and carbon capture are similar and should be together. Um, as I said, I'm not an expert in this, and to me they don't. And the reason is, is I see carbon capture as technology more into the future. Offsetting is something that is a big topic today. especially for corporates and corporations, um, travelers of— that's one of the ways that they are reducing their carbon footprint when they're, when they're traveling. So I have kept them separate. Um, Ali, I know that easyJet are big into offsetting, particularly this year where you're offsetting all of, you know, your passengers' carbon.

Al Gayward:Yeah, we, we announced that we would offset all of the, um, carbon from all of the fuel burned on all of our aircraft, uh, back in 2019. We were the first major airline anywhere in the world to do that. But we also said at the time that this was an interim measure. We wanted to give our customers the responsible option. We'll be bringing that to an end gradually. Anyone who has booked with us or who books with us to the end of this year and who travels up to the end of September next year, we will continue to pay to offset. Thereafter, if they— they can volunteer to offset if they want to. But the technology has moved forward so far since 2019, and we've now set out our pathway to net zero. We see that for the type of aircraft that we operate on the length of routes that we operate, we think the most attractive opportunity for us is hydrogen. And so we are now investing a lot of our money in working with partners such as Airbus, Cranfield Aerospace, Rolls-Royce, to develop hydrogen-powered aircraft for the future. We think that's the right opportunity for us, but we'll also be using SAF. But as I say, offsetting was purely an interim measure.

Ian Heywood:Okay, but offsetting was having a big effect this year on the CO2, but you're going to invest that money for the future, so that does leave a gap in the short term. Peter, I know you are not such a lover of offsetting, so can you tell everyone why?

Peter Semes:Yeah, that's right. I think we all agree that net zero would mean avoid, reduce, and compensate, and therefore offsetting can only be a bridge solution. But as pointed out, it definitely makes sense at the moment to use it until we come to better solutions, but we definitely should not use offsetting and in parallel stop investments into the right technologies because this is imperative that we really start with technologies like SAF as of today.

Ian Heywood:So is one of your concerns a bit about like greenwashing? People say, oh, I've offset that, so that's my job done. I can— nice clear conscience, I can get on with life.

Peter Semes:Yeah, exactly. I think we have to educate people. You can clearly see that if you ask passengers if they would like to offset, the numbers are extremely low. Nobody's willing, obviously, to pay for offsetting, and that would mean we and the airlines have to educate people and convince them that there's no way around, and that, in my view, will only work with new technology.

Haldane Dodd:Okay.

Ian Heywood:Johan, where is Wizz on offsetting?

Johan Edinager:I think I agree with Peter. I think this is— I mean, offsetting On the one hand, it's here and now. It's probably the easiest and shortest-term solution that was used for the last 5 years to find a way of solving your carbon emissions. But at the same time, it is really a very short-term, simple, non-sustainable long-term solution when it comes to aviation. I mean, the challenge really is, like you said, it's— now it's moving towards more other fuels.

Al Gayward:Yeah.

Johan Edinager:of a greenwashing stamp. It is— customers are more aware of what it is and also different types of offsetting. Finding the right type of offsetting has a big impact on operations. I mean, clearly, I think, you know, this is not really the way forward that we see it. We see that really technology is the way which is going to solve sustainability for the future.

Ian Heywood:Yeah, well, that's good.

Jonathon Counsel:I think we—

Ian Heywood:did you want to say something?

Haldane Dodd:Yeah, I just wanted to add, I think it's important to sort of stand back and have a look at what offsetting was supposed to do to begin with, what the carbon markets were supposed to do to begin with. If you look at the broader climate change question outside of specifically the aviation space, the way that carbon markets were initially set up and their purpose was to be able to have the developed world help fund carbon reduction measures in the developing world, to be able to ensure that villages, remote communities, cities in the developing world were able to develop their economies over time, but in a low-carbon way by helping to fund, you know, renewable energy projects and things like that. So actually, there's a really important role that that has to play. Now, as those communities, as those cities in those countries start to develop over time in a low-carbon way anyway, the opportunities for quality offsets and quality carbon credits start reducing. And so we are going to have to turn as a whole economy, not just aviation, towards carbon removals over time anyway. And we understand that. That's an important part of the process. But if you look at the options that are available to aviation today to decarbonize, we know that SAF is a possibility. We'll get onto that in a minute, but it's at very low levels. We're going to have to look at offsetting right now. But actually transition that over time towards 2050 into carbon removals and actually taking CO2 out of the atmosphere.

Al Gayward:Yeah.

Jonathon Counsel:And Ian, if I could just add on to that, and we, like most people on the panel, we see offsetting as a transitionary option, and there is a difference between voluntary offsetting, which is what airlines offer to their customers. We see that primarily as an engagement initiative, you know, because they can't— they don't count as reducing your emissions. But much more importantly, there's mandatory offsetting. Of course, we have our global scheme through ICAO, CORSIA, the Carbon Offsetting and Reduction Scheme for international aviation. All airlines will be mandated to comply with CORSIA, so it's not a choice, it's there. And I have to say, we have to remind ourselves we are the only industry that has a global mechanism to address climate change. It's imperfect, and there's a lot of initiative to try and strengthen CORSIA, But, you know, I think it's a credit to the industry we have that. Now, the absolutely critical point is the quality of the offsets, as Haldane has mentioned. You know, the global offset market today is about $150 billion, and there is a variety of quality of offsets. What we're absolutely sure on through Corsia, we will only use the most robust offsets. So ICAO have set very strict standards for sustainability. So as an industry, you know, our reputation is at stake, and as I always say, we as a good as our worst offset, so our worst offset has to be fully sustainable. So it will play a role whether we like it or not, it's going to play a role in our transition.

Ian Heywood:Okay, so let's move on to more long-term futures, and this is your, your slide, Jonathan, but then I realized that you'd actually stolen it off of Al Dayne, so that was quite good. And the reason I wanted to use this was You know, everyone talks about SAF and that SAF is needed in the long term, and to me this slide just points that out. So Jonathan, if you want to talk about SAF.

Jonathon Counsel:This is an industry slide and, you know, we helped develop this, so it's not an IAG view, it's an ATAG chart, so it's a cross-industry position, and I think it neatly describes, as you say, the different components and the role they'll play. So you've got timeline across the top, and you've got mission, if you like, on the y-axis, which is essentially sector length. So very short haul, short haul, medium haul, long haul. And I think this sort of— and we absolutely support hydrogen. We're a multimillion-dollar investor in ZeroAvia, the world's most advanced hydrogen fuel cell company. Hopefully they'll be running their test flight on their 19-seater in the next couple of weeks. So we absolutely support hydrogen, but we see it really playing that key role within commuter regional and potentially short haul. But you can see the timeline to get there. And it was very interesting that Airbus have obviously, you probably know, have made a massive play on hydrogen, eZero program for short-haul aircraft by 2035. Their CEO at their press event yesterday was saying that will be a very challenging timeframe to meet, largely because of issues around supply around green hydrogen. So we just need to watch that. But the thing, the other point to take from here is SAF is the only real opportunity to reduce our emissions this decade. Yeah, so, and I'll talk about, you know, even though the relative supply is low, it's about 150,000 tonnes, less than 0.1%, we all believe by 2030 we can get to 10% SAF, which is 30 million tonnes, 300 plants. It will involve a lot of capital, but again, we—

Peter Semes:and the other—

Jonathon Counsel:so it's the only thing we can do today, but importantly, we believe believe it's the only viable solution for medium and long-haul flying. And the 2 key numbers on this chart are the percentage of CO2. So medium haul, 43%; long haul, 30%. So really it's the only solution for over 70% of our emissions, and that's why we see it as so critical.

Ian Heywood:And you did mention there, I think you said less than 1%. The figures I've read are definitely less than 1%. They're 0.07%. 0.05% of, you know, the fuel that is needed or is used today is SAF. It needs to go up to 10% by 2030. We were struggling when we were doing maths when we were talking, but we reckon that's about 200 times, um, in what, 7 years? Is that possible?

Jonathon Counsel:Uh, I, I think it is. I think it is. If you go—

Ian Heywood:I love the next chart. You want to go forward, don't you?

Peter Semes:Yeah.

Jonathon Counsel:So basically So basically, you know, in the last 2 years we've seen massive convergence of commitment around SAF. So you can see, you know, US government are actually looking at 15%, so they're really leading the charge there. UK government have committed and a number of airlines. So real momentum around that 10%. As I say, that's 30 million tonnes. But if you look forward by 2050, you know, governments are looking at over 60%. So really believing that this is the primary solution to decarbonize our sector. And the ICAO LTAG— you get lots of acronyms here, sorry about that— that's a Long-Term Aspirational Goal. They produced a report in March of this year. Anybody interested in sustainability in aviation, you've got to get a copy of this report. It's 2,000 pages, but there's a 19-page summary.

Ian Heywood:I did warn you.

Jonathon Counsel:It's free, it's on the website, and it's basically 300 experts, 2 years. It's the definitive piece of work. work, they're saying absolutely the solution to decarbonize is sustainable aviation fuels. But the key to getting this is policy. We won't get any of this without policy support. The US are leading the charge. They announced the Inflation Reduction Act, which is a policy support for— includes SAF, and it layers on top of existing policy in California that amounts to $400 billion of support for SAF plants. And that's why the US is now leading the charge.

Peter Semes:charge.

Jonathon Counsel:We have some progress here in Europe, not quite enough, and we have some progress in the UK, but it's just not enough yet to get those plants built.

Ian Heywood:Before we go on to your last slide, Haldane, what— one of the things I read was that yes, you know, aviation needs this, but there are other people that want SAF or the components that make up SAF. So how does that all go into a bucket of well, and how does that affect hitting these goals?

Haldane Dodd:Yeah, absolutely. So I'll add another report to the one that Jonathan just said. Our report, which is Waypoint 2050, was a production of the industry before we actually decided that we were going to go to net zero 2050 as a goal. It informed that decision. Is this even possible? The report Jonathan mentioned is 2,000 pages long. Ours is 100 or Thank you. So, but actually really interesting material in there, including that graph that you saw before, or the matrix. What we've identified in that is how can we get to net zero using a range of different levers, including SAF, and we sort of have similar numbers that we need to get up to between 50% and 75% of our fuel supply being SAF by 2050 in order to get up to to the numbers that we need to get down to net zero, if you like. But importantly, when we were looking at that, we asked, is that amount even possible? What would it mean in terms of production facilities? What would it mean in terms of sources of SAF? And how does that compete with other uses of that feedstock? And actually, we took a very conservative approach to that to make sure that we, first of all, were not touching anything that would impacts food or water security around the world, arable land, etc. Waste sources, we knew that we wouldn't be the only user of waste sources, and so we wanted to have a fair share, if you like, but it is possible. It is possible to get the quantity of sustainable aviation fuel we need, whether that be from waste resources or whether it be from power-to-liquid, which is a really important and interesting opportunity in the future. the longer term. It is possible. It's going to take an enormous effort to get us there, but then that's the same dilemma that's facing the entire economy. All parts of the economy need to decarbonize and in fairly rapid order. So the finance community knows about this and is on board and is starting to take a lot more of an interest in sustainable aviation fuel. Certainly governments are, and the progress that we've made since we as as an industry adopted our goal in October last year to now getting a goal at the government level through the United Nations in October this year really shows that the governments are starting to kind of come on board as well. We need more of that for sure, but I'm optimistic that we can actually get there.

Ian Heywood:Okay, I'm not sure I share this optimism so much, but we will talk about that towards the end. So this is You were talking about a roadmap, and so this is your roadmap.

Jonathon Counsel:So just quickly talk through it.

Ian Heywood:Just quickly, I think it just helps people get an understanding.

Jonathon Counsel:Sure, sure.

Johan Edinager:There's not—

Jonathon Counsel:actually, if there's one chart that shows the impact of COVID this does it, doesn't it? Um, but, um, yeah, and we live in the sustainable— we live by roadmap. So you've got Destination 2050, the ATAC report. You've got, uh, sorry, Waypoint 2050. Destination 2050 is the European report. UK government do one. And you've got We've got the ICAO, so there's plenty of them, but they all roughly look like something like this. So we talk about the 4 pillars, if you like. So the blue one is aircraft engine technology, so plays a very big, big role, 50% of our reduction by 2050. So, and for us, this includes some hydrogen-powered aircraft and hybrid electric aircraft. And then if I go to the bottom, so the pink bit, so this is what we call market-based measures. So these— this is where we We recognize as an industry there won't be enough technology to reduce our own emissions down to net zero, so that yellow line, so we will need to invest in reductions elsewhere. Up till now it's offsets and it's market-based measures, so things like the EU emissions trading scheme, the UK emissions trading scheme. As we said, we want to transition away from those and get into removals. Removals we believe are a much more robust form of carbon reduction. So by 2050, we won't be using any offsets. It will all be carbon removals, and that, that is the basically the last 20%. But the bit that we're really focused on is this sustainable aviation fuels. That's the white piece, and we believe by 2050, 60% of all our fuels will be on sustainable aviation fuels. The target there— so that's— we have a 10% target by 2030. That's 1 million tonnes of SAF. So So we've been working very hard because there's not a lot available today. It took some convincing of our board, so because that's— so we have committed to buy 10 times more SAF than is available in the world today. So but we are convinced because of the momentum around targets and through policy moves. So for instance, just another data point, there are 70 SAF plants currently being planned for construction in the next 5 years. So it is happening.

Ian Heywood:Yeah, but I think that's very interesting. You're saying IAG, yes, it's a big airline group, but it, you know, there's— we're talking about the industry and you're already buying up more SAF than there is.

Jonathon Counsel:And we're not doing it on our own. There's about a dozen airlines out there, you know, and, um, you know, and, and supply is coming online. It will come online and it will have to because we've got mandates. So the EU have implemented a mandate of 2% by 2025 going to 6% by 2030. The UK government are going to implement a mandate by 10%. So, you know, the supply will come on board because it has to.

Ian Heywood:So SAF is clearly needed because the technology isn't going to be there except for short haul. And then you've got— but there are massive issues that have got to be overcome. Let's talk a bit about Hyzien. Johan, this is where you and easyJet come in big time, although I do appreciate IAG has got a large short-haul aircraft fleet as well. Where are you on hydrogen-electric aircraft?

Johan Edinager:I mean, I think to carry on to the— from the conversation on SAF and availability and actually the roadmap which is placed here, I think, you know, what we're really playing is a long-term game, you know, which is built up of like you say, decarbonizing the industry by several different steps. But I think this has already been started. I mean, I think aircraft renewal, which is what we've been focusing on the most currently, is actually something that started 5, 10 years ago. You know, we at the time, we saw that we needed to start reducing our costs. We saw that the A321 was the most fuel-efficient aircraft, but also the most carbon-efficient aircraft at reducing the carbon impact per passenger. So, you know, you have to start quite early. And if we hadn't gotten the order book at the time and placed the aircraft, we wouldn't be sitting with aircraft today. So you have to start early. And I think the same thing comes with SAF, which is exactly what we've been doing, which is that we've been partnering with, for example, MOV, which is to be able to procure SAF availability between 2023 and 2030. And now what we're doing now working with Airbus is exactly what we're doing with hydrogen, although it's a very, very big transition. And, you know, the question is, do you want it to be kind of like— do you want it to be a smooth transition, or do you want it to happen in the sense of Armageddon, which is that, you know, we notice that we're at the very end of the lifespan, and then we have to find a way of getting an aircraft to the moon and shooting off a, you know, rescuing the planet in the very last minute? And I think this is kind of like where you have to approach it, which is it has to be a very, very long-term view. So what we do with Airbus is really now cooperating with them. We're looking at not actually the aircraft itself at the moment. Right now we're talking about with them about the infrastructure needed around it, about how this is going to work, how the— what requirements need to happen on not only by the airlines but also at the airports. And You know, this is really what's needed here. And we do believe that hydrogen plays a role, but it is a part of a roadmap of transition, which all of these areas are a type of technology advantage that you have to take, which is actually the only way to really decarbonize the atmosphere.

Ian Heywood:Yeah, no, true. So EasyJet's been in the news a lot recently about the hydrogen engine. So do you want to talk about where you are on your hydrogen plan?

Al Gayward:Yeah, we've got a multi-million pound investment with Rolls-Royce Engines, and just last week, Boscombe Down near Salisbury, we conducted the first successful trial of a hydrogen-powered jet engine, which went very well. So we do think that's the future for us. But I think, as others have said, you know, it's a combination of a number of things. It's fleet renewal. We've got an order of 168 neo aircraft coming into the fleet, the A320s, the A321s, as we retire retire the CEO aircraft, both 319s and 320s, get them out of the fleet. It's the use of SAF, increasing SAFs. We operate— we were the first operator last year to operate from Gatwick to Glasgow using a 30% blend of SAF. We're using 1% blend in France now, and as my colleague from IAG said, you know, we'll comply with the requirements, you know, raising up to 64% in Europe. 10%, we think, in the UK, waiting for them to clarify, and then it's hydrogen in the future, but it's all connected to the whole of the fleet renewal. Come 2050, we're not going to be all hydrogen aircraft. Let's be honest about this. We think the first hydrogen aircraft may be ready 2040, possibly even as early as 2035, but we're reliant on the likes of Rolls-Royce and Airbus and other producers to supply those.

Ian Heywood:Yeah. I mean, when I was thinking about this, you know, without going into the completely detailed numbers, you know, we've got 3 airlines, 1 airline group, 2 airlines on the panel. Between them, they've got about 1,000 short-haul aircraft. So forget about every other airline out there. You know, you've got, you know, you've got 1,000 that need replacing. I mean, I don't even know the timescales that that is likely to take. Take place. And then again, when you dig below it, you're getting into this problem of will there be enough hydrogen? Will it be needed for some other industry or some other use? And then you've got the production of green hydrogen, which I now know there's green hydrogen, blue hydrogen, and whatever else hydrogen, um, that, uh, you know, the, the production of these. So there are massive changes. And in hydrogen particularly, you've then got to, you've got to bring in the airports and the changes that have got to go at the, at the airports. Peter, from your point of view— sorry, I was looking at Peter, I was looking at Hal Denham and said Peter. So I'm going to ask both of you as, as industry people, where are you on this? Hal Denham, take you first, and I'll come to you, Peter.

Haldane Dodd:Yeah, absolutely. Listen, I think the important thing to note is we're going to need hydrogen either way. That the actual hydrogen itself, and particularly green hydrogen. So we can either use it directly in the aircraft through burning hydrogen on board the aircraft, and a couple of different forms of that as well, or we're going to need it as a feedstock to go into power-to-liquid sustainable aviation fuel. So as we are talking to governments about the energy supply overall, we need to be part of that hydrogen story. Governments are starting to put in place hydrogen strategies, not fast enough, but again, for the wider economy, not just aviation. We need to make sure aviation's part of that process and part of that strategy and a user of that hydrogen, whether we use it directly or whether we turn it into SAF through power-to-liquid measures. I think it's important for us, and certainly the work that we did with Waypoint 2050 showed 3 different pathways to getting to net zero, one of which is a very technology technology-heavy pathway where we are pushing on the hydrogen side of things, and we need to know if we can't make that happen, what is our backup? And the backup is SAF. We know it works. It's just a case of scaling at this stage. And so we know kind of where we need to go. There's a lot of questions around a lot of it, but actually we're in a relatively good position as an industry because we are— we have our plan in place, if not the exact details of We kind of know where to go.

Ian Heywood:Okay, that's, that's slightly worrying if we're going to need more SAF than what was on that, those diagrams earlier, because trying to get to that stage is, is going to be—

Haldane Dodd:We've taken that into account. We know the full amount of SAF that we would need if we can't make hydrogen work. If we can make hydrogen work, then we need less SAF and the hydrogen itself gets used.

Ian Heywood:So McDonald's have got to make more burgers, have they, so that you can get more cooking oil, I always read on their trucks as they drive past.

Haldane Dodd:That's a small part of the solution as well.

Ian Heywood:Peter?

Peter Semes:Well, let me add a more black-white view here on this. I would say SAF is the absolute solution, but the statement there is a mandate from EU and UK and therefore SAF will be available In my view, won't work at all. If you talk, if you talk to the production side, they clearly tell you at the moment we don't invest. It's, it's different in the US because of the Biden Inflation Act, but we really face difficulties in Europe to see that production capacities are scaling up. With respect to hydrogen aircraft, my view is that's the iPhone 30. Might be a fantastic device, but would it be a good idea to say we wait to make a phone call until they release the iPhone 30? No, SAF is the solution. We have to focus on first biofuel, SAF, and in the second step, power-to-liquid, but there's no chance to wait for power-to-liquid because of the problem you mentioned, green energy, stuff like that. And with respect to hydrogen, I think the aviation industry will compete with other industries for hydrogen, and my view is every industry will get the energy they need. The car industry is good with electricity, the aviation industry is perfect with SAF, and production energy or production industry will have to use hydrogen.

Ian Heywood:I think that's a good way of looking at it, I think. I'm just going to stop there. I'm going to move on to carbon capture, but I was going to come to you, Jonathan, on carbon capture, because you've got quite a big, quite a big blue, light blue blob at the end there. So can you just talk— and I don't want to spend too long on this because I do want to spend more time on the, on the data side, as we know that's quite interesting— but can you just talk a bit about what carbon capture is, what needs to happen? Because you haven't got it coming into 2033, something like that.

Haldane Dodd:Yeah.

Ian Heywood:And then it's growing enormously, which worries me, and everyone's slides.

Jonathon Counsel:I'll talk to that, but I just want one very quick— I absolutely agree with Peter's point. You will not get investment with just mandates. You need policy support above that, so price stability mechanism. Henrik Hollehi, I think, is here today, isn't he? So it would be a good message. A mandate— well, you need price stability mechanisms, so that's something. Otherwise, we're going to import it the US, and Pete Buttigieg, the Secretary of State for the US, has said we want to corner the global market in SAF, and currently they will. So just as a point there. So carbon removal—

Ian Heywood:Just on that, you've got 2 airlines on the panel here that are big airlines. They don't fly to the States. This is a global issue.

Jonathon Counsel:So we can import it. Well, so no, no, I mean, how much CO2 do you use to import it? When they say corner the market, they mean corner the supply. So you can import SAF from the US, people do, and so I think if we don't get the proper mechanisms in—

Ian Heywood:Does that not burn a lot of carbon to get it to you?

Jonathon Counsel:No, no, actually the actual carbon footprinting of distributing SAF is less than 0.1% when you ship it. So shipping bulk materials is very low carbon. So yeah, okay, so and that's what will happen. That was saying you will get the SAF but you'll get it from the US. Okay, but on carbon removals, yeah, so we predict there's been a lot of progress in this area. We think so. We've got small-scale projects, but they're very— it's almost like where SAF was 5 years ago.

Ian Heywood:Could you just explain what carbon capture is?

Jonathon Counsel:So there's 3 types. There's 3 types. You'll have nature-based solutions. So basically carbon capture is basically removing CO2 from the atmosphere. So offsets are really about mitigation. They're about reducing the amount of CO2 that goes into the atmosphere. Removals are about taking it out. And I think we now recognize as a global economy there's too much CO2 out. We're going to race past 1.5 degrees, 2 degrees because there's already too much CO2 in the atmosphere. It's over 1.5 trillion tons. Therefore, to meet any of our climate change targets, not only are we going to have to reduce the amount going in, we're going to have to start extracting it. And then there's several types, nature-based solutions, that's usually you use sort of organic material, to absorb CO2 out of the atmosphere. And then you can go to more engineered solutions leading to things like called direct air carbon capture. So that's the one that most people focus on. This is where, you know, there's about half a dozen startups around the world. They're literally just sucking CO2 out of the atmosphere and they're burying it under the ground. So there's a range of— but they're all small scale. They need a lot of investment to scale up. Our view is we won't start to see serious volumes from about 2030 and again, same story, it's all predicated on policy support. And the thing that we're looking for and lobbying for is— so if I buy carbon credits as IAG, I don't get any allowance for that within the EU emissions trading scheme, so there's no eligibility. So one of the things we're looking for is we need eligibility for carbon removals in the EU emissions trading scheme and also in the global scheme Corsia, because that then provides a natural incentive to invest more in them. We think we'll get that, so that's why Our scale-up is from, you know, from 2030. But this is— and again, we'll be competing with the whole global economy for this. You know, the United Nations have said, you know, the world, we need more removals if we're going to meet our climate change targets.

Ian Heywood:I think we need more of everything from the way we're talking today. It's cheery, isn't it? They sound like a 5— no, it's like my 5-year business plan. It always looked good in year 5. So Jonathan, you asked for numbers. You might not sort of have asked for these sort of numbers, or not the data that tells you what you wanted. These— this is really interesting. I've come across this report, and I thank Eamon Cowen, if anyone knows him, a really great journalist, and BTN where it's published from. And what he's done is he was talking to a global travel manager who clearly— unnamed, but clearly, you know, a global one. And they use 5 different booking tools in 5 different countries. And so for the same flight, which happened to be a BA flight London to New York, they looked at what was the carbon emissions KGO that they said, you know, that's how much you've got to pay for. So if you are offsetting it, this is the amount you've got to offset.

Haldane Dodd:Right.

Ian Heywood:And this is the numbers, 5 completely different numbers, you know, ranging from 300 to 4 times that, 1,200. I mean, to me that does sum up my view of, you know, where the industry is on data and everything else. I'm going to start with Peter because I know that this is your subject and you've got very strong views on that, but, you know, the whole panel on this subject, because to me this really is a major subject, the whole about data, KPIs, measurement, etc., etc.

Peter Semes:Yeah, that's right, and that's the IMPACT story. That is one of the reasons why we founded IMPACT as an association for the financing industry, because they came to us and said, well, we have a real problem. What you describe here is also true if you have an aviation lending portfolio and you change from one advisor to the other and finally you get a completely different analysis about your CO2 footprint. And that's the reason why we said if we want to achieve net zero in 2050, we need full transparency, otherwise there is no possibility to follow up on strategy. How would you like to measure the efficiency of a strategy if these are the numbers? That's the reason why we developed KPIs and a set of information we would need in order to really measure the right footprint. And just to mention this, the top 600 airlines in the world, only 15% are reporting about emissions. And those 15% report in a completely different way. There are some airlines who do it in a really transparent way. There are some who only talk about efficiency but not intensity, not about decoupling, and that doesn't help the world at all. For me, it's really encouraging and fascinating to see that our members, which are 35 global institutions, are definitely willing to follow up on this concept, and now we are in the progress to transform those KPIs into the loan agreements so that we can have an educating effect on the lenders, which are the airlines.

Ian Heywood:Okay, Hal then.

Haldane Dodd:Yeah, I mean, this is a very messy space at the moment, for sure.

Jonathon Counsel:I think I just proved that.

Haldane Dodd:And even for those of us who've been been working for, you know, over a decade in the aviation sustainability space, actually, the metrics that are being looked at, the questions that are being asked for transparency, mostly for the financial markets, are growing and growing. In fact, we had a call between industry partners or a webinar for industry partners on Monday where we had— and I'll give you some more acronyms here— SBTi, ACAP, Impact the NZBA, ISO, and TPI, all of which are kind of trying to do the same thing, which is to give a score to aviation industry bodies as to how they're doing in terms of meeting these long-term goals that we've set for ourselves. We need to make sure that they are aligned because at the moment there are too many players in that space, and I like the work that Impact's doing in this area. and the sort of aviation-centric approach, because quite a number of those other bodies are taking it from a whole-of-economy perspective, not taking into account our own specific needs as an aviation industry. So that's a really important thing. I'm going to add one more number, by the way, to your chart below in terms of CO2 emissions for that one flight, which is the ICAO number. So the— I just did it while we're on stage here. The ICAO carbon calculator says 300 16 kilograms of CO2. That calculator until just recently has been the sort of standard that we tend to have used because it was developed by governments, industry, and the environmental groups working together to have a common metric for the industry. I think, you know, IATA has taken on that role now and is using real aircraft performance data. I'm sorry, I'm sorry, I'm sorry. its underlying model, but probably comes up with a fairly similar result to that as well. When we look at these different types of models, we always have to ask where are they coming from? Where are these calculators coming from? And I would imagine that Concur and TravelDo there include non-CO2 effects of aviation, which is something we do need to take into account more and more, but not easy to do. I would also imagine that they're selling offsets, and of course the higher the number, the higher amount of offsets they're selling as part of the process.

Ian Heywood:Oh, I like that one. That would be my favourite choice.

Jonathon Counsel:Just a quick comment, because it's a BA flight, the actual number is the bottom one, yeah, so just to be sure, but it is, I mean, we need a harmonised approach here, and IATA's work, so, and I think this is now available, they spent 2 years coming up with an industry standard carbon calculator, so I'd recommend that every every airline looks at that to try and drive this harmonization.

Ian Heywood:I should make everyone aware the impact report, CAPA will make it available to everyone at the end of this session or sometime in the future. Marco can talk about that. Johan, Wizz, you're good, you're open, aren't you, on this? You have an open approach to your data, to your transparency?

Johan Edinager:I mean, Leading on from the previous discussion, I mean, you can't avoid not being transparent. First of all, consumers today are much more educated than they were 5 years ago and 10 years ago. Governments are much more educated than they were 5, 10 years ago. Partners are better educated. Investors are better educated. Everybody is better educated. Being untransparent is not an option. And I think actually, you know, with digitalization, the tools will come in the hand of the consumers so easily that they will be able to make comparisons. Now we have 10, 15 different tools showing different numbers, etc. I mean, the only number that really matters is the intensity that you produce whilst you're flying at that time, and consumers will start making those choices. I don't think consumers will pay less or pay more to fly a greener flight, but they will pay less to fly a greener flight. in flight. And I think that's actually what's going to happen. And we talked about it offline. I mean, access to capital is going to be more expensive if you're not transparent, if you don't provide the data, if you're not green. Access to labor force is going to be much harder if you're not able to convince your labor force that you are a green employer. Access to any type of airports, etc., government funding, all these things are going to be harder and harder, and there's going to be more pressure coming. And at some point, We're going to come to a breaking point where, you know, it is going to be cheaper to go on SAF than it is on kerosene. It's not going to happen— if it's going to happen in 10 years or 15 or 20 years, but there will be a breaking point when the industry will move over from the old to the new, and it will become a point where, you know, we will be leaving— some airlines will be left behind, some airports will be left behind, some investors will be left behind, but there is a new world coming and that world will have to be sustainable. And I think this is kind of like, you know, and it has to— part of that is being transparent because, you know, for us it's a unique selling point.

Al Gayward:Okay.

Ian Heywood:Ali, easyJet, where are you on this whole data transparency?

Al Gayward:We've been reporting for a number of years and in fact the next set of reports will come out with our annual report middle of next month. And indeed our board are remunerated based on achieving our targets, so we've been very, very visible for some time on this and will continue to be so.

Ian Heywood:And you're happy to do that?

Al Gayward:No, we've a long way to go. No airline, no airport can do this alone. It's absolutely pointless us having an aircraft take off from somewhere like Bristol where they've made some great strides forward in developing the infrastructure, but if it takes off from Bristol and goes to another airport, maybe Santorini— I might be doing Santorini a disservice— but if they don't have the infrastructure there, it's absolutely hopeless. So the whole world has to move together. And the only thing I would add as a last caveat, which we've not touched on, is the need for airspace modernization, which plays a huge part in this.

Ian Heywood:Yeah, to fly more efficiently. One thing we haven't touched on, which would be the last question before I ask the very last question, is The price, we haven't spoken about the price of SAF, you know, at the moment. I thought it was 4 to 5 times. I think someone corrected me that it's 2.5 times now.

Jonathon Counsel:3 to 5 times.

Ian Heywood:3 to 5.

Jonathon Counsel:Because the beauty of SAF, there's 8 different pathways. There's not just one SAF, so it depends on the type of SAF. 3 to 5 times. But as Johan said, so we've done our analysis, when will that cross over with jet and the comparison The price is jet plus carbon. We think, well, a couple of years ago we were saying 2035. Actually, with all the momentum we've seen, we think early 2030s you're going to get SAF becoming competitive with jet plus carbon.

Ian Heywood:So price of SAF, looking— I mean, everything we're doing today is looking forward— is not going to be a major issue?

Jonathon Counsel:It all depends on getting the scale up. We need to build those plants to get the economies of scale and so So all predicated on that, but yeah, it will be eventually, it'll be cost competitive with jet.

Ian Heywood:Okay, because we are the last panel before lunch, we need to wrap it up on time, but I'd like to go along the panel and ask, so the, you know, when we started this off, the objective is zero 2050 for the industry. How confident are you of achieving that? I'll start How Dan and Mark now?

Haldane Dodd:I'm very confident that we can do it for sure. We need the right policy in place at a global level, and that's what we're working on through ICAO, but also individually through governments. But I don't see there's any reason on a physical or technical level we can't achieve it. It's a case of scaling up what we kind of know already exists today and then adding in some new technology later on. I'm more and more confident every year that we can actually get I agree.

Johan Edinager:Of course we can. I mean, it's not a question of if we can or not. It's a question of how, and it's a question of how governments are going to be managing this, how taxation will be equitable across the business, how we'll make sure that that money goes back into investing into aviation, into sustainable aviation fuel, into hydrogen, etc. And I think it's going to be a question whether or not we are scrambling for, uh, in the last 10 years or, or If we are kind of like working along the full 27-year path line?

Jonathon Counsel:Yeah, I'm 100% certain we can achieve it. The question for me is how.

Ian Heywood:Your job is the mix.

Jonathon Counsel:And I've been, I've been working sustainably 15 years and never have I seen so many now options that enable us to get there. I mean, 5 years ago, nobody was talking about hydrogen aircraft. We're talking about hydrogen aircraft now as part of that mix. The question for me is, is what proportion of in-sector versus out-of-sector? And of course we want to and reduce as much of our own emissions. Now, our view is we can get to 80%, so that last bit of 20%, but I think as an industry, the better we work together, the better policy we get, the more we can do in sector.

Ian Heywood:Peter?

Peter Semes:No way unless there is a miracle taking place in Brussels.

Al Gayward:So I get the casting vote, eh?

Ian Heywood:No, I do.

Al Gayward:I think— no, we are very positive. We've set out the policy. pathway. We recognize the pathway might deviate through the years as technology changes. I mean, look at technology over the last 2 years. Hydrogen, as you mentioned, was not an entity there. That's why we're offsetting. So absolutely, we, we are very focused on getting there. How we get there may change slightly, but very focused that we'll get there. We have to.

Ian Heywood:I'm not sure if a moderator is allowed a vote, but that's never worried me in the past anyway. My view you know, spending a small amount of time reading the reports and talking to you guys is it's most probably possible, but it needs what Peter said, focus. You know, you've really got to focus and it needs government action. And if you can get those 2, then yes. And it's got to be SAF-based. Yes, there's others, you know, and you need those around the end. But if you're saying let's focus 80% then laser focus on getting SAF, getting it at the numbers that you need, then you've got a chance. Anything outside that, no, you haven't, because of all the other infrastructures that we've touched on but not in any detail today that are enormous in themselves, whereas SAF is a fuel that can go on the existing infrastructure that you've got. I'd like you to thank my panel for me. Hopefully that brought a bit of clarity. And there's lots of reports We're happy to raid if you want, man.

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