Sustainability and SAF – Not just a European and American phenomenon - is Asia Pacific falling behind?

Transcript

David Wills:So we've got a panel this afternoon that will, I think, build on some of the really good and perhaps some of the provoking conversations we had about 20, 30 minutes ago here. So I'd like to invite the, the panellists up on stage. Firstly, Mun Ching Yap, who's the Chief Sustainability Officer for AirAsia Group. Mariam AlQubaisi, who's the Head of Sustainability and Business Excellence at Etihad. Richard Nuttall, who we've met earlier today, CEO of SriLankan Airlines. And Prateek Sengupta, who's the Associate Director of ESG and Sustainability at IndiGo Airlines.

Prateek Sengupta:Take a seat.

Richard Nuttall:Do you want to be in order or?

David Wills:All right, thank you everyone. I did have a first question I was going to ask, but there was a question in the last group that I think might be a good place for us to start, which was, I guess, in the context of Asia, Asia Pacific, the— not whether Asians care about sustainability, but where does it sit in terms of priority And if it's not customers, what is it that's driving airlines in Asia Pacific to implement sustainability programs to drive to net zero? Mun Ching, you might start.

Mun Ching Yap:Definitely for us, this was a really tough time to start thinking also about really pushing hard on some of these areas, especially on SAF or offsetting, because of the difficulties we've had in the last 2 years. However, this really isn't something new for us at AirAsia, except that it didn't have a name before. It used to be called efficiency, and we've really driven that very hard. So one of the things that my boss Tony has been always pushing very hard on is on operating the business really efficiently. Our green operating measures are one of the things that we measure assiduously. But having said that, despite all this, we are taking a very close look at what the industry is doing on SAF and offsetting, and things are moving very, very quickly. I suppose I'm in Singapore, so I do have to use the word kiasuism. Do you know what that means?

David Wills:No.

Mun Ching Yap:It really means that nobody wants to lose out.

David Wills:Right.

Mun Ching Yap:So there is industry pressure that that some of the bigger carriers are starting and more and more airlines are doing it. And of course, having SAF available in Singapore puts a lot of pressure on the regional governments as well. So yeah, we are, we are definitely looking into it for all those reasons.

Mariam AlQubaisi:Okay. Mariam? I think, David, your presentation was quite insightful because it was all about disclosure. And most of the carriers in Asia Pacific signed up to the Carbon Offset and Reduction Scheme in International Aviation, also known as CORSIA. So we are sort of— I mean, there is no choice for us. If we're— if we choose to implement CORSIA, then we have to go down the path of carbon-neutral growth until emission-free technology becomes available. So I think this is a race. It's a healthy competition, and everyone is in this together. I wouldn't isolate Asia-Pacific from from the rest of the world because most of the countries did sign up to CORSIA?

Richard Nuttall:Yeah, so I think, you know, as an airline, you know, everybody signed up to the idea of it. And, you know, at SriLankan, we've got a whole load of sustainability initiatives which I won't talk about here. But I think when you look at the list, it's quite interesting that the people that are investing in it and doing all of this stuff are, shall we say, the more affluent nations. And so, you know, if you want to look at SAF in Sri Lanka, our biggest problem has been getting any kind of fuel, you know, paying for SAF when you can't pay for diesel, you can't pay for petrol, you can't pay for jet fuel. And one month we couldn't get super diesel, or one week it was a full whammy. So, and the country and the government is just about trying to find dollars and people are trying to get enough money so they can get enough protein to feed their kids, then they care about sustainability because often the poorer countries are the ones that are affected by, you know, the environmental changes. But at the same time, it's not quite as high on the agenda because your population is more worried about food in their bellies than, you know, what's going to happen in 10, 20 years' time with global warming.

Mun Ching Yap:Yeah.

Mariam AlQubaisi:Okay. Prateek?

Prateek Sengupta:I think for us, if you look at sustainability or ESG as a larger topic, I think You know, the prime drivers are, you know, investors, I would say, you know, investors are putting a lot of pressure on a lot of companies. But also, you know, when you say customers are not concerned, maybe the individual customers are not concerned, but every day I speak to our institutional customers who have taken on science-based targets, who have taken on net-zero commitments. They want to reduce their Scope 3 emissions from business travel. So they definitely are pushing us. They want us to go down this path because we are a lever for them to reduce their own emissions. So that has definitely been a large contributing factor to why IndiGo is looking at SAF quite aggressively, I would say.

Mun Ching Yap:Yeah.

David Wills:Okay. In terms of each of your airlines, I mean, it's, I think it's probably worth sharing, like sustainability in general and SAF specifically, what what things you are doing, just to give a taste, I suppose, of what 4 airlines in this region are doing and where you're at in that journey?

Mun Ching Yap:Oh, we started by really looking at our volumes potentially over the next 35 years up to 2050. And that was a big exercise. We needed to kind of figure out where we're going to stand when it comes to supplies as well. And from our estimates, we can say that By 2035, not even reaching 50% SAF use, we would consume as much as the output of an entire refinery. So that was quite eye-opening, and that really puts into perspective of how we should approach this, not only from a consumption point of view, but what kind of investment opportunities there will be for the future.

David Wills:Yeah, okay.

Mariam AlQubaisi:I think, David, I'll take you back to your slides, which were again very insightful. You noticed that the highest off-takers of SAF were European countries and North American countries because they have the largest SAF producers in the world, Neste and World Energy. And if I take you to the example of Etihad, we don't have SAF in the region. We don't produce SAF. We have pilots, but they didn't reach commercialization. So Etihad started producing its own SAF back in 2011 in a consortium with industry partners Boeing, ADNOC, Safran, Bauer Resources, and a host of others in order for us to explore the production of biofuel from Salicornia balegoba, which is a salt-tolerant plant in a desert environment. This is ideal. And again, it is still going through testing. Again, we need another 10 years for us to develop this. So we wanted to look at other options and we are exploring the route waste-to-fuel. We're looking into green hydrogen, synthetic fuels. But then a quick win and something that the World Economic Forum is launching next week in COP is the book-and-claim system. So why not tap into the resources of those who make large volumes of SAF in Europe and North America and claim the reductions? So Etihad is looking in terms of decarbonization, obviously, new fleet, as you mentioned. I would say energy-efficient fleet, operational efficiencies. We've partnered with a number of AI companies to explore how we can better optimize routes and basically control or manage contrails, because contrails also contribute to global warming. And avoiding them give you sort of an advantage of avoided emissions. And finally, the offsets route. But then this is the last resort. We want to make significant changes in the way we operate using sustainable aviation fuels and operational efficiencies with whatever we have available to us at the moment.

Richard Nuttall:Yeah. So I mean, for us, we're doing the obvious things that we can do in an environment like ours. So we're doing all the things to utilize fuel as efficiently as we can. And, you know, that's— it's good business sense as well as being, you know, the environmental sustainability bit. We're also doing as much as we can to promote environmental awareness. So we are involved in planting mangrove swamps. We sponsor whale and shark conservation. We sponsor an institution that's looking at sort of marine conservation. We also do similar things in sort of social responsibility. So we carry a lot of medicine and things like that free of charge into the country. And we, our medical team, go around and do schools and things like that. So all of that that we do. But obviously, again, the big one is fuel and is SAF. We've probably been not very friendly this year because we've had to tanker a whole load of fuel because there was nothing in the country. So we have those realities. But at the same time, you— we will do a SAF flight before the end of the year. So we need to make sure that we understand it all. But, you know, in terms of moving forward in SAF on a larger basis, again, like everybody else, it's going to be driven by supply. That's probably not something that's going to start off on Sri Lanka, in Sri Lanka, maybe longer term if the technology's there, because There's a lot of agriculture, so there'll be source, source supply, but that will depend again on the technology. So really, we're going to depend upon the ecosystem. We want to get there, but, you know, if we get to the stage where countries and governments and airports can say, well, we want 10% of the SAF out of this country to be— or 10% of the fuel to be SAF, and we can support it with the technology and the tax incentives so it can be supplied, then Yeah, absolutely. We welcome that. And with the industry, we'll take advantage. But at the current time when we're struggling even to get jet fuel, SAF's not top of the list for the country.

Prateek Sengupta:At IndiGo, we, you know, much like what Richard said, you know, we've been obviously focusing a lot over the years on operational efficiency. We also have one of the youngest fleets of any airline company in the world. Out of the 280-odd aircraft that we have, I think almost 90% of them will be NEOs by the end of this year, which is, you know, I don't know too many companies that have hit that kind of quota. We also, on SAF, we believe, you know, in India, the problem is there are so many players, not only in the aviation sector, but also in the oil and gas space, manufacturing of jet engine fuel, jet aviation fuel. So we've been working with a number of stakeholders, whether they be research institutes funded by the government, whether they be the oil and gas companies, you know, other airline, other carriers within the country, as well as SAF manufacturers like LanzaJet and Shell and Honeywell, who, you know, large global players. But again, it comes back to the supply issue. And there are also certain infrastructural challenges like, If IndiGo is the only airline in India to do a 10% blend and you bring that SAF into the common mixing tank at the airport, what guarantee is there that that SAF is going into our aircraft and not some other carriers' aircraft? So these challenges are things that we are working through. And, you know, what the government also believes is it's probably better to start with mandates on the oil and gas companies, get them to start doing a 1%, 2% blend. and make that available to their carriers and then maybe mandate the carriers to use that.

Mariam AlQubaisi:Yeah.

David Wills:Okay. That leads to something that I want to ask you about government response to this. There's been a bit of comment through various sessions today about the role of government. So maybe Richard, starting with you, working back. I mean, there's sort of the European approach, if you like, of Mandating targets. There's the US Clean Skies sort of incentive-based approach. There has been some discussion about sort of education to allow it to be a customer-driven. I mean, if we accept that there's a degree of urgency to accelerate what's happening in SAF, what's an appropriate government You're looking at me. I'm looking right at you.

Richard Nuttall:Okay, so no, that's fine. So I think it has to be government-driven. I mean, so the reality is that if it's airline-driven in a world where SAF prices are infinitely higher than jet fuel prices and jet fuel is already 50% of our costs, unless you're an airline with very, very deep pockets from whatever reason, you're going to struggle to really drive SAF alone. At the same time, if everybody going to a country or going to an airport is mandated to carry 10% SAF out of that country because they can supply it, then we're all happy with that. It's a level playing field. We don't have a problem. And therefore, that has got to be, to me, the way to go. So I think the European approach is probably the right way, is mandates. But to do that, you have to have the supply. And therefore it's got to be mandates along with incentives for suppliers. And, you know, if you start off with 5, 10%, then you start to get the production, the technology gets better, the costs come down. So it becomes more realistic to produce more and to get that percentage going up again. So it's a journey and it's going to go in steps. But I think absolutely government mandates and incentives are probably the way to go.

Mariam AlQubaisi:If I may add, I really think it's when we wait for governments to take action, and we should obviously, we sort of turn a blind eye on the lowest hanging fruit. In the UAE context, we are sort of enabled. Etihad has a voice in drafting a lot of the resolutions when it comes to transitioning to cleaner technology. But then there is also low-carbon aviation fuels. Which are CORSIA-eligible fuels. And they are sort of a way to, you know, to make a significant reduction until sustainable aviation fuel becomes available. I was so naive when I first started at Etihad. I come from academia. So my background is in— I'm an environmental engineer and I taught environmental science in university. And when I joined Etihad, I used to always say SAF is the ultimate solution. No, no, it's sustainable aviation fuel. That's the only way we can actually harvest A lot of reductions. But then through the Greenliner program with Boeing and GE, and later this was also extended to Airbus and Rolls-Royce, we discovered that it's not just one thing, it's a million. As my team would always remind me, it's a million little things. So we decided to approach this through an integrated, pragmatic, multifaceted solution. So So it's not just dependent on SAF. If you plug in all these things together, minimal use of SAF, minimal use of operational efficiencies, and drop in a few offsets in there, you can significantly reduce your operations emissions. So we keep, I feel, fixated on governments to fix things for us when we as an industry are strong enough to make small meaningful reductions until we get further support in terms of economies of scale to produce SAF and efficient— I always say efficient-free, but less, I would say, less carbon-intensive technology available. So again, I try to always find short-term solutions plug into our operations and not just wait for— because not only governments don't respond quickly, industry standards, we know that engines can run on 100% SAF fuel, for instance, but we're not commercially allowed to operate an aircraft for safety reasons on 100% SAF. So the only way we can operate 100% SAF is through book and claim. So there are easy ways to make significant reductions and not just wait for technology to mature or governments to respond. That's my take, humble opinion.

Mun Ching Yap:Well, I think I would take a slightly different approach. I don't think going the EU way or the America way is necessarily what we need in the region, and it does depend what our goals are individually. Taking the EU way, the mandate way, which is what a lot of governments are now talking about really does not take into account that the EU has invested billions into this industry over the last 20, 30 years. We don't have that. So to put the onus now on airlines to suddenly buy SAF at 3 to 4 times the price of jet fuel is just unfair, I would say. And therefore, we are leaning more towards a positive incentive direction, but which one will really depend on what your national goal is. If the country has a goal to be its own fuel producer, like the US, which is currently, it makes sense to provide the incentives to a fuel producer. But if you are in a country that doesn't really have a plan to be a fuel producer, then the incentives should go to the airlines. Then the airlines can purchase where the fuel is available. I mean, we are operating in 4 countries. In Malaysia, there is a plan for fuel to be available. It's not currently available, but there is a national agenda to get aviation to be more sustainable. In that case, give us the credits. We'll go get it in Singapore, for example, or Tokyo, wherever it is available. But if you are in a country that— but in 2 or 3 years' time, when Petronas, for example, is ready to make this available, then perhaps we can review that incentive structure. But similarly, in Indonesia, Thailand, and the Philippines— I mean, Thailand and the Philippines, we haven't really got that much information. I was in the Philippines recently, and they said that they don't really intend to produce. They intend to get the supply from another country. And then in that case, I think tax incentives or fuel incentives to an airline makes more sense.

Prateek Sengupta:Yeah, I'd like to— I completely agree with what Mun Ching said. You know, I think just having sort of demand-side mandates would not work. You would need supply-side mandates. In India's case, our oil and gas industry is committed to being a large SAF manufacturer. So if you look at the big players in the Indian oil and gas space, whether it's Indian Oil, Bharat Petroleum or Reliance, all of these companies want to start manufacturing SAF on a large scale. They see the commercial opportunities there because obviously even if it is not supplying to Indian aviation companies, they would have a large foreign market to supply to. And therefore the government initially would not in India want to make a mandate towards the aviation sector. They would want the supply to be first there, and then maybe look at how they can maybe convince aviation companies to maybe pay a little bit more. And then once you have that supply chain mandate, their scales will increase and the prices will automatically go down, making it easier for us to then purchase SAF.

David Wills:Yeah.

Mariam AlQubaisi:Okay.

David Wills:Mariam, maybe starting with you. I mean, one of the embedded or related issues is who pays for it. And there's already been some comments We were talking today about whether flying is a basic social right, or whether it's going back to being a luxury item that if you can't afford it, you can't do it. And, you know, at 3 times or 4 times, as Mun Ching said, the cost burden that would be potentially passed through in ticket prices takes that even further out of reach. So who, where does the buck stop when it comes to paying for what is the cost of being sustainable?

Mariam AlQubaisi:I think it was echoed in several panels before, education, education, education. And I, in our last press release about the 100% SAF fuel on book and claim, we actually explain the cost and the challenge it is to operate this on as business as usual on us. So we carried the cost this time. And we explained how we carried the cost. We need to educate our guests, our corporates, that this doesn't come easy. You know, there is no direct return on sustainability investments, to be honest. We do it for the environment, but then we carry, you know, for— you said 4 or 5 times the cost. Richard is struggling to get Jet A fuel. So it's not, it's not common. It's not easy to get by. And that's why we designed a new program, which I believe Joanna even alluded to earlier, Conscious Choices, which has a guest segment and a corporate segment. So we ask our guests and corporates to help to chip in basically and help us acquire sustainable aviation fuel. This way we reduce our Scope 1 emissions and they reduce their Scope 3 emissions. The, the, the, the message here is that we're all in this together. We are doing our part as carriers. And industry partners, we are doing our part. Maybe it's not enough, but we'll get there. But we also need you to be part of this. Those of you who are benefiting from flying, I am totally against the concept of no flying. Fleek scam is not something I stand by. I don't think people should be flight shamed. If we weren't flying, we wouldn't be— personally speaking, I wouldn't be the person that I am today, someone who is tolerant, Someone who— I mean, flying gave me the exposure to make me the person that I am today. And I don't want to deny my children this privilege, to be honest. And for us to continue flying, we need to start flying with a conscience. So it's really educating our guests and the corporates who have deep pockets to help us attain these tools.

Prateek Sengupta:You know, so, you know, in a country like India, which still has, you know, hundreds of millions of people who live below the poverty line, flying is a very aspirational thing for a lot of Indians who are sort of going from being poor to being middle class and then going up the economic, socioeconomic ladder. For them, getting on a plane for the first time is something that they look forward to. It's one of the markers of their status now, their improved status in society. So that's one of the things that is driving the increase in the aviation market in India. It's because people who earlier were not taking flights or taking trains or taking buses are now taking planes, flights because they can afford it. I think, yeah, I mean, if SAF gets in the way of that, that would be a terrible thing.

David Wills:One of the things that struck me this morning, it was the Star Alliance CEO made a comment about it's only 1 or 2% of the global emissions, therefore, you know, we need to educate people it's not that serious. And I have this feeling that somehow we've divorced the discussion about climate change from why we're doing this, the consequences to the planet if, if there is no action on it. And so I just wonder whether the cost of action and the timetable or the timeframe where action is needed will inevitably make travel unaffordable for people who may have been able to afford it in 2019, and whether the social cost is worth paying for the protection of the planet.

Mun Ching Yap:I'll do that. I don't— well, in the region, I think there's a lot of talk about it. I don't think it will come to that kind of action that you have in Europe anytime soon. Most of our economies here depend very strongly on tourism, and the priority will still be to revive the sector, and that really will have a huge socioeconomic benefit before we are ready to kill the aviation sector with the mandates that the EU is looking at. So I don't feel too pressured at the moment, but obviously it gives us a lot of room To also begin the conversation with our policymakers to strike a middle way. There will be some part of it that will be passed on to consumers. I'm an economist. I do believe in internalizing the externalities. But at the same time, there is a bit that we have to take account of as well in the aviation sector. And one of the things that we've done, of course, we've invested in a lot of new equipment, new fleet. a lot of software to improve our efficiency. So I think from our perspective, we've really done a lot of that, especially in digitalizing the business as well. So some bit of it will go to the consumers.

Mariam AlQubaisi:Yes. Yeah.

David Wills:Okay.

Mariam AlQubaisi:If I may very quickly say something, I think we need to put things in perspective. I'm not denying that we are a large emitter of emissions, but the food and beverage industry, we only contribute to 2% of global emissions. The meat and dairy industry contributes to 14% of global emissions. Again, you know, I think we have to target in order for us to make meaningful changes in— it's not flying. This is an industry that helps sustain countries. We need to target as to how we can change Behavioral changes, our guests, our flyers, and even the way we eat. By the way, the lunch was delicious. But my point here is that let's not just fixate on the aviation sector as the largest emitter of emissions. 2% versus 14% in the food industry. It's not so fair. It's not a fair game.

Richard Nuttall:Yeah, I don't think that it's about one industry or another industry. The reality is the planet is warming, and if we can't turn it round, life is going to get very, very difficult. So it's not about textiles, it's not about food, it's not about aviation. We all need to get much better at what we're doing, and we will learn with the technology. But, you know, if we're 2% today, we're 2% of carbon emissions that are already unsustainable for the planet. And air travel is only going to grow. So if it's 2% today, if we have something that's unsustainable, I mean, if it doubles, you know, it's just, it's just, it's just even worse. So like every industry, we've got to do the best that we can to become carbon neutral. I don't think there's any option about that. I don't think the answer is to stop travel. I mean, you know, at the end of the day, if we sit in our apartment in a first world country that's not affected by climate change and we switch on our air conditioner and we don't go to these beautiful countries and see, you know, the greenery, the biodiversity or the deserts or whatever else, if we don't appreciate the planet, then we're also not going to get the same urgency. So, you know, I agree with you. I mean, travel is so important in so many ways just to understand this planet that we've got to understand each other. We're getting Too polarized as it is, so stopping travel is not the answer. But we absolutely, as an industry, need to do our part, and the same for every industry, same for every part of our lives. We've got to take this seriously, and I think you know technology, and if we all work together, we'll get there. But it is our problem as well as everybody else's. There's no point looking at other industries and saying, "Well, you know, we're not really the problem." I don't think that cuts it.

Prateek Sengupta:No, completely agreed. I think whether it's aviation or if you look at the cement sector, and everybody needs cement, everybody needs to fly, but we have to do it in a way that's as responsible as possible, as dictated by the technology that's available at that time. So standing still is not an option. So if SAF is a bridge between today and hydrogen, then we have to do everything that we can to adopt SAF because, like Richard said, it's 2% today, but it's only going to go up. I mean, if you look at the projected numbers and the increase in the aviation sector in the Asia Pacific region, it's going to be huge. It's going to double, triple within the next decade. So the emissions are only going to go up. So standing still is not an option.

Mariam AlQubaisi:Yeah.

David Wills:Mariam, back to your point before, I agree with you that there's no single silver bullet, right? It's an integrated approach with multiple initiatives. One of them that I think appears in most, if not all, airlines' roadmap is around a role for carbon offsets. But I mean, the data suggests that there's variable uptake, certainly from a passenger point of view, and there's criticisms of certain schemes, etc. So what's the, what's, what's the role in the future of offsets, and what, if anything, needs to happen? To make it a robust part of—

Mariam AlQubaisi:Well, David, I think it's outlined within CORSIA, right? So when we invest in offsets, we invest in CORSIA-eligible offsets. When we invest in fuels, we invest in CORSIA-eligible fuels. We don't discredit the science that the scientists and the experts within ICAO put in drafting CORSIA. But the plan is for offsets or carbon credits to be the last resort when technology cannot meet that reduction, then you invest in carbon offsets. I always give the example of my mother, an educated woman, but she will not put a dirham more on the ticket price. Even if you tell her, tell her it's for the environment, she believes that she invests in the environment in her own way. She doesn't need Etihad, in her own words, to teach me where I put my dirham. So how can I convince my own mother? And I'm the head of sustainability to add a few dollars to her ticket. For the environment. Again, everyone believes it's our responsibility and it is, but it's a collective responsibility. And until we can convince the consumers as well to, to, you know, everyone tell— if you, if you ask people today, they say, oh yes, we're ready to invest in credits. But when it comes to action, very few do. I think we are very, very much regulated as an industry. We have standards in place. If we follow them, we will hopefully— and I'm very optimistic about Corsia. I know despite the criticism, I believe that Corsia will help us reach carbon-neutral growth. And with, with the hopefully the large upscale of producing SAF, we could— we can start integrating SAF. But let's not even forget that there is also emission-free technology, hydrogen. fuel cells, potentially electricity as well, short haul that we can tap into today. So yes, a million little things as my team tells me.

David Wills:Anyone else have any thoughts around offsets?

Richard Nuttall:So I think, you know, we've got so far to go and, you know, when it comes to how we do it, if we wait for perfect, we won't do everything, we won't do anything. So I think, you know, it's offsets, It's SAF, it's other fuel technologies, and we do whatever we can and we'll learn as we go along what works best and each of the things that we do will do them better. So, you know, the carbon offsetting, yes, it has its detractors, but we do it better now than we did it a couple of years ago. So, you know, I don't think any of us knows the future. I think, you know, we just continue with all the different initiatives and some will get stronger as they gain headway and some will fall by the wayside. I mean, it's like any Technology. So I think we go with them all and, you know, some will become stronger than others over time.

Prateek Sengupta:So at IndiGo, you know, we've been, you know, internally discussing creating a system where customers can offset their travel emissions. So we did a little bit of a dipstick study with some of our customers and some very interesting questions actually emerged. A lot of Indian customers, they're concerned about the veracity of the offsets, whether whether it's actually going towards the proper projects. They're also concerned about the fact that they don't want to invest in offsets outside of India. They're saying that India is a very climate-vulnerable country. Why should Indian money go towards offsetting climate change in some other country? Why can't it happen in India? There's so much to be done. So these are all questions that need to be answered for offsets to be viable, because buying offsets is one thing, but whether those offsets, whether the customers are willing to are willing to buy into the credibility of the offsets. That's also very important. Before you take money from customers and put it towards offsets, we have to be sure that they want to actually— their money is going where they want it to go, and not where you as a company decide it needs to go.

Mun Ching Yap:Yes, I totally agree with that. We will have a lot of difficulty communicating if we are going to take money from our passengers and Buy offsets, say, in Africa or New Zealand. The fact is that when we look around the region, only a handful of projects that are Corsair eligible. The, the— and there is, of course, the need to ensure quality, but it has made it so restrictive and there's no advantage at all in this region. We are operating in a, in a region in Southeast Asia with 3 out of the 10 most biodiverse countries in the world, Malaysia, Indonesia, and the Philippines. And last I checked, there are 12 that we can identify that are carbon Corsair-eligible projects, and none of these support biodiversity. They are solar projects. And I think that has to be addressed, and it is a much quicker way that we can address that before we can even talk about the kind of technology that needs to bring SAF to an affordable price. And I think that will be better received in the region. A lot of environmental projects— in my other hat, I'm the— I also head the AirAsia Foundation, and we've supported a lot of projects in the region that have gone into reforesting many areas, whether it's mangrove or mountainsides that have been destroyed by climate disasters, but none of them are eligible to benefit from carbon offsetting. And we would love to be able to do that for them. So one of the other things that we are also looking at actually is to look at how we can get them certified. And also talking to regional governments that they need to put in more work to look at the criteria for certification for projects that are suitable in this region. I mean, it's easy to put on a wind turbine and calculate what is your carbon impact, but how do you convert what is biodiversity to a carbon calculator? There's not enough research institutes in this region that is doing that work. So that's another area that needs to be looked at.

Mariam AlQubaisi:Yeah.

David Wills:Okay. Very good.

Prateek Sengupta:Just one thing I wanted to add to that, you know, just to add what Mun Ching was saying is that not all offsets are created equally. You know, I mean, not so too many, too much of the offset focus right now is on solar projects, wind projects avoidance. What about removals? Should we be investing in CCS? I mean, there aren't enough offsets projects that are focusing on these things. And these are the things that people want to invest in. Solar doesn't require external investment anymore. It's already market viable, right? So is wind to a large extent. So we need to be putting in money into technologies which aren't market viable, like CCS. So I just want to add that.

David Wills:Okay, excellent. We've got a couple of minutes left, so maybe a last question to each of you. What do you think— maybe Richard, you can start— the greatest opportunities or priorities you've got over the next 5 years to really make a difference in sustainability at your airline?

Mun Ching Yap:Prateek's going to start first, that we first.

Richard Nuttall:Again, so it's to follow. I don't think there's any one. You know, I think that we can get better at carbon offsetting and whether it's Corsair or not Corsair, we do projects. We don't check whether they're Corsair, we still do them. And we try and, you know, we're in a country, it's also got amazing diversity and we need to protect that. And people come to the country to see it. So it's an easy sell. And we have some people who fly who will pay for carbon offsets. And, you know, it's probably not the Sri Lankan laborer going to the Gulf, but we've got a lot of reasonably affluent tourists that come to the country who might. So why wouldn't we do it? Equally, you know, we don't have small fleets, so it's going to be SAF and other fuels that come along. So we'll support that. We're not in an airline or a country where we're probably going to be driving the technology, but that doesn't mean that we can't take advantage and hang on the coattails of those who can do the research and show us the way. I mean, it's got to be collaborative. So, you know, we just need to understand that it is important and follow all of those tracks and learn what we can from others. And yeah, but it's— I don't think it's a magic, you know, there's one thing that we're going to do in the next 5 years. We just need to make sure that it's important and we've got the team that are set up that are monitoring what's going on and that we're doing the best we can in all of those areas.

David Wills:Yeah, excellent.

Mariam AlQubaisi:I think like Richard, we'll continue doing what we've been doing. But I think the one thing I would love to focus on is to widen the net when it comes to collaborating. So far, we've been as an airline collaborating with OEMs. But what I would love to see is for us as airlines to collaborate with one another. We're not competitive here with sustainability. This is a collective responsibility. And what I would love to see the Greenliner program to have SriLankan Airlines, IndiGo, you know, all these airlines as part of the Greenliner program. It's no longer an exclusive Etihad thing. That is what I would love to focus on in 2023— collaboration.

Mun Ching Yap:As Richard said, all of them actually. There's not one. But one thing I do want to highlight is that there has to be a lot more awareness. Most of the time when I've been speaking to fund managers, a lot of banks have been asking us about our ESG performance, but they have no idea how complex it is for aviation. So we've done a lot of talks with them. But the main thing is the purpose of that is really to get the financial signals in the right way so that we can get the financing to invest in some of these technologies. Right now, it's really all about what are you doing? But, you know, yeah, we've done this, but how are you going to support us to take the next step?

Prateek Sengupta:Yeah, I think for us, I mean, everything that, you know, everybody said, but, you know, obviously continue to modernize our fleet, continue to focus on purchasing the best available technology that's there in the market. That's definitely a priority for us in terms of managing our emissions going forward. You know, as Mariam said, you know, doing collaboration is very important. The pie is large enough, you know, everybody can have their share of it. If somebody flies Etihad from Dubai into Delhi and then takes an IndiGo flight from Delhi to Bombay, you know, the same— we both have responsibility towards that passenger and managing their footprint, so to say. So collaboration is definitely very important, and that's something that we are actively looking to sort of get in on.

David Wills:All right, thank you. So Everyone got something out of that. There were some really good insights. So thank you, and please join me thanking the 4 panellists.

Richard Nuttall:Thank you.

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