MS. ARATANI: Hello and welcome to Washington Post Live. My name is Lori Aratani, and I’m a transportation reporter here at The Post. We’re glad you could be with us for our program on the future of flight. Today we’ll be talking about sustainability and what airlines are doing to be greener. And with us we have Ben Minicucci, the new CEO of Alaska Air Group. Ben, welcome to Washington Post Live.
MR. MINICUCCI: Hey, thanks, Lori. Great to be with you.
MS. ARATANI: Great. Well, I know we have a lot of ground to cover, so we’ll just start right off.
MR. MINICUCCI: Sure.
MS. ARATANI: I know Alaska has set a very ambitious goal of getting to net zero emissions by 2040. So, tell us a little bit about how you plan to get there.
MR. MINICUCCI: Yeah, it is a really ambitious goal. You know, if you think of airlines, you know, we burn gas to get from point A to point B. So, saying we’re going to be at 2040--at net zero at 2040, it really is an aggressive goal. And when we discussed this with our board, one of the things they wanted to make sure is that we had a real articulate plan in terms of how to get there. So, our plan is really two-fold. We have a short-term plan and we have a long-term plan. The long-term plan is 2040. It’s a five-point strategy. And the first one is about renewing our fleet. And we have a huge Boeing order for 120 Max that are replacing our older Airbus airplanes, and those--as each one comes in, there’s a 25 percent improvement by seat mile in terms of emissions. So, a new fleet is the first strategy.
Operational efficiency is a big one for us, a culture of efficiency. So, this is everything how you operate the airplane on the ground, using ground support equipment, you know, taxiing from the gate to the runway using single engine taxi. And one of the cool things that we just implemented using artificial intelligence and machine learning is by partnering with a Silicon Valley company called Flyways, is how you actually plan the root of an airplane from one city to another. Think of it as Waze in the sky. And it’s already helped us save track miles in the sky and reduce how much gas we burn, which reduces emissions.
The third, which is a big one, is sustainable aviation fuels. This is probably the biggest enabler to get to 2040. There’s a lot of work being done with the government on a SAF blender’s tax benefit. There’s a lot being done with industry to increase the amount of sustainable aviation fuel. So, this will be a huge one, something that we all have to work out, because it will have the largest impact.
The one I’m excited about is innovative technology. You know, hybrid electric airplanes, this is something that’s progressing at a rapid pace. It’s starting with smaller airplanes. But you can see in 10, 15, 20 years that some regional airplanes could be powered by hybrid electric airplanes. So that’s an exciting one to look at.
And then the fifth piece of our strategy is carbon offsets. This is something we would use as a last resort, but there’s some interesting technology on carbon offsets like carbon sequestration that we’ve got to get smarter about. So that’s the five-point strategy.
In the meantime, I talked about a short-term goal, in the next five years we want to be the most fuel-efficient airline in the country. And we’re getting all our employees involved. And one of the things we’re doing is by--you know, we have a bonus program that we give out every year based on goals that we set, and we have a carbon goal established for this year for all employees of Alaska Airlines, and 10 percent of our bonus is based on achieving carbon goals. So, we’re putting our money where our mouth is and making sure all 22,000 employees of Alaska Air Group are involved in being part of this strategy of being net zero by 2040.
MS. ARATANI: Well, that’s great. I know in addition to that very ambitious goal you have--you mentioned some short-term goals. But there’s also an effort to reduce the impact of carbon waste in water by 2025. Is that another program that you all are launching?
MR. MINICUCCI: It’s something that we’re always actively pursuing. Our teams across every station, this is something that’s always on the forefront. It’s a big part--it doesn’t get talked about very much, but it is part of our strategy, you know?
MS. ARATANI: Right.
MR. MINICUCCI: One of the cool things we introduced was box water, which is it’s something that just helps. If you’re on one of our flights, on our regional flights, on first class or premium class, we issue boxed water, which, again, it’s another thing in the effort to help reduce waste out there. So, it’s--we talk a lot about emissions, but there’s so much to it than just emissions.
MS. ARATANI: That’s so interesting. What is the reaction from your customers when they see that, from passengers? Are they puzzled, or do they--do they understand what you’re trying to do?
MR. MINICUCCI: You know what, I think a lot of it is they’ll say, wow, well, this is really cool and I’m glad Alaska is doing it. So, we get a lot of positive feedback. And then we kind of explain what we’re trying to do. And you know, our crews, our flight attendants, they’re just wonderful because they explain and I will tell our flight attendants, you know, a decade ago, more than a decade ago, they’re the ones who started the recycling on board. They were so passionate about it, that they told us as management, hey, we’ve got to start recycling on board. So, they’re very passionate about recycling. So, anything we can do to reduce waste, they are all on board. And they’re wonderful ambassadors not only for the company but in terms of reducing the environment--the impact on the environment.
MS. ARATANI: Well, that’s great. Well, that brings up the bottom line, right? So, are sustainability and profitability possible in your industry? I know you operate on pretty thin margins.
MR. MINICUCCI: You know, I think, like, when you talk about sustainable fuels, right now it’s tough because the cost of sustainable fuels are double to--two to three times the cost of jet fuel.
MS. ARATANI: Right.
MR. MINICUCCI: So, I think, you know, one of the ways you do it is by setting aspirational goals to say, look, we’ve got to bring the cost of producing sustainable fuels down. We’ve got to increase the production levels. So, this is not something that’s going to happen in a year or two years. But you can see in a decade, in 15, 20 years that the cost of sustainable fuels could be at par with jet fuel. I mean, this is when it makes sense. You know, right now if we were going to go purely sustainable fuels, all our profits would be wiped out. So right now, it’s not possible. But setting that ambitious goal, I think that’s what--I think that’s what industries do. They set ambitious goals. They get people to come together, smart minds to figure out how to get past these constraints that are out there, you know, and get to a better place.
MS. ARATANI: What do you think it’ll take to help--to help bring down the price of sustainable airline fuels, aviation fuels?
MR. MINICUCCI: Yeah, I think there’s a lot of energy behind this. You know, every time we talk to, you know, government officials and, you know, there’s--you know, the current government that’s in place is really big on reducing our environmental impact. So, we say, look, one of the ways you can help us is by helping along the sustainable fuels initiative. And this is a blenders tax that’s being proposed. So, a blenders tax to help offset the cost of producing sustainable fuels is one of the big initiatives that’s out there. And I think educating people in positions of influence is going to be--is going to be a key enabler in getting the cost of sustainable fuels down.
MS. ARATANI: Great. You mentioned this in your opening, and I’m intrigued by this idea of electric aircraft. So can you talk a little bit about the potential that you see there if--and how far off you think those are.
MR. MINICUCCI: You know, I think for, you know, eVTOLs, like electric vertical takeoff and landing airplanes--I think that technology is here. You know, that’s for, you know two- or three-passenger airplanes. So, I think that technology is here. The question is does it make sense for an airline to have--you know, what kind of airplanes would an airline have? And you know, we need right now our regional fleet consists of 76-seat airplanes. Today that’s not possible with the technology that’s there, because batteries are simply too heavy. But I think you’ll see a progression of this technology for, you know, a handful of seats, and then maybe over 10 to 20 to 30 to 40 to 50, over the next five, 10, 15, 20 years as the technology improves. And I think--I think that’s what you’ll see. And then when it makes sense for regional aircraft, I think that’ll be a big breakthrough. But you’ll see it for smaller passenger airplanes.
Now when that exactly happens, I mean, I don’t have a crystal ball, but I think that technology is evolving rapidly. And you know, I’m an engineer. I geek out on stuff like this. We had a presentation last week. We brought in an expert. And just hearing him talk about hybrid electric technology, hydrogen technology, there’s just a lot of smart minds out there working on this. And we just need--we just need a breakthrough in terms of, you know, the weight and energy of batteries versus jet fuel.
MS. ARATANI: Well, great. You have--Alaska I know has put together a lot of interesting partnerships, and I know you have one with a small company up your way, Microsoft. So, can you talk a little bit about what you’re doing with employees who travel for business?
MR. MINICUCCI: Yeah. You know, Microsoft is--they’re just a great company, right in our backyard. So, when Microsoft employees travel from the Pacific Northwest to California where, you know, we have such a big network up and down the coast that they’re offsetting their travel with sustainable fuel. So that’s a partnership that I think could be a model where, you know, companies can help offset the carbon impact. So, Microsoft is a leader in this. They’ve stepped up, and we partner with them. And I think their employees are really inspired by this initiative, and we’re excited to be part of it.
MS. ARATANI: Great. And I know one of the keys--right?--is getting--and as an engineer, right?--is getting these ideas out of the lab and into the real world. I understand you’ve also got another partnership with Boeing to try and test out some of these ideas that may help with sustainability, help you be greener. Can you talk about that?
MR. MINICUCCI: Yeah, it’s called the ecoDemonstrator. It’s one of our deliveries that is going to come next year. So, it’s one that we volunteered as one of our deliveries. So, they got a multitude of technologies they’re testing on the airplane to--just to help, again, improve the efficiency of the airplane, reduce--increase the fuel efficiency of the airplane, reduce noise, just a whole host of different technologies that they’re implementing, different materials on the airplane.
So again, we’re fortunate here in the Pacific Northwest. We have these wonderful companies like Boeing and Microsoft and Amazon and Starbucks that we work with to take these ideas and actually try and put them into practice. So that partnership was wonderful with Boeing. We have a longstanding partnership with--we’re going to an all-Boeing fleet, so it just makes it more exciting.
MS. ARATANI: And I understand there was--you know, sometimes they’re big ideas, but sometimes there are little tweaks that you can make on airplanes that make a difference. I read about winglets on your Boeing 737s?
MR. MINICUCCI: Oh, yeah.
MS. ARATANI: Can you tell us a little bit about how that works, or what difference that’s made?
MR. MINICUCCI: Oh, yeah. So, when I came to Alaska 17 years ago, we had no winglets on airplanes, and so these were the 737NG airplanes. And when the design was proposed of putting winglets on those airplanes, there was going to be a 3-4 percent efficiency just by putting a single winglet on the airplane. So as time went on, again, more wind tunnel testing. I think we’re on our third iteration of winglets. So, on the Max, there’s a new winglet that really improves--and what it does is it improves the aerodynamics, the vortices that get shut off at--I don’t want to get complicated, but it’s the vortices that get shed off the wing, it helps improve the airflow or the laminar flow over the wing. And so that’s had a huge, huge impact on fuel efficiency. And I actually think the airplane is cooler with winglets than without winglets. Just--you know, it just looked better.
MS. ARATANI: And for our audience, I know we’re geeking out a little bit, so you’ve met a fellow geek here.
MR. MINICUCCI: Yeah.
MS. ARATANI: But for our viewers, can you tell them I guess what--explain what a winglet is and sort of where it goes on the wing?
MR. MINICUCCI: Yeah, so as the wing, as you’re looking out--if you’re looking out the window, right at the tip of the wing you’ll see something that comes up on the wing and something that comes below the wing. So that’s why it’s a winglet right at the end. And that’s just what helps the aerodynamics of the airplane as the air flows up and over the wing and under the wing. And how smooth the air flows over the wing to reduce turbulence has--we just waste less gas. It’s kind of like your car. If you think--you know, if you look at sports cars, it’s kind of the same type of thing when they--when they put fairings on the car just to improve the aerodynamic drag.
MS. ARATANI: That’s great. Maybe I can get some of those for my minivan. I don’t know. I’ll have to see.
MR. MINICUCCI: Oh, yeah. Oh, yeah. Yeah, you can do a lot with a minivan, Lori.
MS. ARATANI: Well, great. Well, I know we’ve talked a lot about what airlines and what Alaska is doing to be greener. Are there things that passengers can do if they’re concerned and they want to help reduce their carbon footprint? I know you want them to keep flying. But are there steps that they can take?
MR. MINICUCCI: You know, I think that’s a great question. You know, one of the things is what you bring on board. You know, weight matters on an airplane. So, you know, the heavier the airplane--because we have to weigh everything that goes on the airplane, and we do these calculations for weight and balance, and then based on the weight of the airplane we have to carry more fuel or less fuel. So, the weight of the airplane is a massive contributor to how much gas you have to take on and how much gas you spend throughout a flight. So, I would say that the folks that--friends that I know, I say if you want to help, take the least amount of weight you can on an airplane. If you can bring one carryon, that’s great. If you’re going to check luggage, you know, make sure that you’re not throwing everything in there and--you know, and it’s--the bag is 70 lbs. You know, try and keep the weight as low--as low as possible would be the biggest thing.
MS. ARATANI: Yeah.
MR. MINICUCCI: And then, you know--you know, bottles, you know, your own water bottle that airports are being really good. You can fill up your own water bottle at airports. Right now, like I said, we introduced box water because we want to reduce the impact of plastic. And so, people, you know, bring their aluminum bottles or steel--stainless steel bottles, and airports are doing a great job of providing water at different parts of the airport and just fill it up and have water. That, again, reduces waste. So, all these little things really, really help. And again, it takes a village. You know, if you look at the heat across the country this week, I think it’s hard--I mean, it’s hard to argue that the planet’s getting warmer. You know, it was like--you know, it was--I’ve never seen it this hot in Seattle in my 17 years here. And my air conditioning broke in my condo, so it was even worse.
MS. ARATANI: Oh, no! Oh, no.
MR. MINICUCCI: But, you know, the impact is real. And I think everything--anything people can do I think helps. And it’s going to take--it’s going to take everyone to get it done.
MS. ARATANI: Yeah, that is definitely--those temperatures in the Pacific Northwest are definitely a reminder. Sorry about your air conditioning. That’s not fun. That’s not fun.
MR. MINICUCCI: Yeah, yeah.
MS. ARATANI: I want to pivot a little, because it seems like we can’t talk about the industry without talking about the impact of the pandemic. So, I know that folks are--more folks are vaccinated, cases are beginning to drop. So, people are beginning to come out of their shells and fly. So, can you talk a little bit about for people that may be a little rusty, what this new experience or what this experience of getting on an airplane now will be like for them, what they should expect?
MR. MINICUCCI: You know, I think the message we would have and what--the message we’re trying to get across is, we’re going to keep people safe. And we want them to know that their experience with us--: I mean, with the pandemic everyone--you know, the level of safety consciousness went up several degrees. And the airline industry has always been an industry that’s been focused on safety. But we took it to another level. We called it next-level care with our--with our safety.
So, we went to a lot of lengths to explain to people that, first, we want them to understand that when you’re on board, it’s--the environment is safe. The HEPA filters on board process 99.99 percent of the contaminants, including COVID. So, the air you’re breathing gets recirculated every three minutes. It goes through these very fine particle filters called HEPA filters, put the air back into the airplane. And every three minutes it gets totally recirculated. The air flows from top to bottom, not front to back, so that your air is as clean as it can be. So just to have people understand that the air is--it is clean. It’s getting filtered. And I’m confident to say it’s almost safer than it is in a grocery store. So, the air on board is good.
The masks are still in place, at least until sometime mid-September. That’s another level of safety that’s put on board. So that one thing they would see when they come on board.
And then some of the things we did is, you know, we wanted to keep, you know, our special Alaska service on board. So, you know, when you put all these elements like masks and safety protocols in place, it takes a little away from the product and the service. So, we thought that, you know--you know, how do we--how do we take this and create an advantage out of what’s happened? And so, we put a lot of time in touchless innovation. So, what they’ll see when they come to the airport, they can use their phone, print a boarding pass, print baggage tags without even touching a kiosk. So, we call it touchless. You can do all these functions touchless. And my favorite--because I flew to D.C. and New York in the last few weeks, and I used it myself--is, you know, we have our famous fruit and cheese plate that people love.
MS. ARATANI: Ah, yes.
MR. MINICUCCI: Yeah, it’s famous with our Beecher’s cheese here in Seattle. And now you can preorder it. So, we pushed that really quick. We said, look--because, you know, before you had to have that interaction with the flight attendant and people didn’t want people in the aisle. So, we say, hey, let’s make it quick. You can preorder it, store your credit card on file. No credit cards come out. Just preorder it with your cheese plate and your glass of wine. The flight attendant knows it. The caterer knows it. Everything is loaded on the airplane. So as soon as you’re in and you’re sitting down and we hit 20,000, 30,000 feet, the plate and the glass of wine comes right to you and with a warm smile--even though in the mask you can’t see it--with our kind, caring service. But so those are the things we tried to do is, you know, you try and take advantage of a tough situation.
MS. ARATANI: Got it. I know one of the sort of unfortunate restarts of travel, at least on the domestic side, has been an uptick in what the FAA calls unruly passengers.
MR. MINICUCCI: Yeah.
MS. ARATANI: Do you have any thoughts on what’s going on or what’s gotten into people?
MR. MINICUCCI: Yeah, you know, well, I mean, first--I mean, let’s be honest. Who wants to wear a mask for six or seven, eight hours on a flight? I mean, that’s like--we’ll start there, and I totally understand it. The "but" on that is that it’s federal law. It’s a law that’s mandated, and airlines have no choice but to enforce compliance to that law. What I will say is, we saw this as an issue even before--you know, just at the start of the pandemic when we actually mandated masks--and what we thought of is, you know, how can we do this in a way that is understanding, is caring--again, you know, we have this culture of kindness and caring at Alaska, and then you have to enforce these rules. And we say, you know, how do you--how do you balance, you know, enforcing rules with our culture of kindness and caring? Because we hire our wonderful flight attendants for kindness, not as enforcers.
So, you know, we did a couple things. You know, when people weren’t wearing masks, we introduced something called a yellow card. So, if your kids are playing soccer, the yellow card is--we took that from soccer--is it’s a warning. It just simply in a kind, gentle way saying, look, you know, you need to wear your mask, these are the rules. We’re asking you to comply. Because if you don’t, we’ll have to take further action which could ban you from future flights. And that was hugely beneficial. I think it helped bring down the anxiety, kind of explain like this is a federal law that’s required. So that helped. But even that said, I think over the last 15 months we probably banned 300-400 customers from our flights because they refused to comply. And it’s tough. And so that--so it’s unfortunate.
The other thing we’ve done is we’ve equipped our flight attendants with de-escalation methods, right? So how do you deescalate a situation when someone is frustrated because, you know, they come from their environment and, you know, across our country, you know, masks mandates were, you know, varied--right?--where some, you know, didn’t have. And so now you come on board--you go through an airport and you come on board an airplane and you’ve got these strict rules on masks. So, we’ve equipped them with de-escalation methods. And so, you know, our flight attendants are doing a wonderful job.
The pilots on board, we’ve asked them to really back our flight attendants up so. So, you know, the pilot in command has four stripes on his shoulder, and he commands respect. People know that. So, when he comes on board, or he stands in front of the airplane and makes an announcement to say please, you know, comply with the mask--please listen to our flight attendants, that goes a long way. So, we tried this approach, you know, at different levels.
And the best one that I like, Lori--this is my favorite one--my favorite one is we introduced something called the safety dance. Have you seen our safety dance?
MS. ARATANI: I have not. I’ve got to see this.
MR. MINICUCCI: Okay. Well, I--being a teenager of the 80s, so Men at Work, you know, the safety dance from the Men at Work--I don’t know if you remember the song--well, we decided to communicate a safety message in a fun way. And I hope you look it up. It’s called the safety dance. It’s using the Men at Work music, and we’ve changed the lyrics on it. But it was a fun way to communicate to our guests through social and through other channels that, you know, you’re required to wear a mask. And again, all these things--and I said if you don’t, you’ll get a yellow card, or you know, all sorts of stuff. And you’re helping others. So, it was a fun way to communicate a safety message.
So those are the things that we tried to do. It’s--like I said, the September 13 deadline is--it’s around the corner. It’s, you know, two- and a-bit months way. And you know, hopefully it gets lifted and we can go back to more normalcy.
MS. ARATANI: Well, great. Well, I have so many more questions, but unfortunately, we don’t have any more time.
MR. MINICUCCI: Oh, gotcha, that's quick--okay. We can do this sometime again, yeah, yeah.
MS. ARATANI: Exactly. Thank you so much, Ben Minicucci, for joining us on Washington Post Live.
MR. MINICUCCI: Great. Thanks. Thanks, Lori.
MS. ARATANI: We’ll be back in a moment. Just so you know, we’re going to take a brief break. We’ll be back in a moment with the CEO of one of the world’s leading sustainable fuel companies. So please stay with us.
MS. MESERVE: Hello. I’m Jeanne Meserve. Amidst the uptick in air travel, there is one sobering note. Aviation accounts for about 2 percent of global emissions of carbon dioxide. And unless something changes, it’s projected that could go up to 10 percent by 2050. The industry is responding with new technologies and other innovations. Here to discuss that is the CEO and president of GE Aviation John Slattery. Mr. Slattery, great to have you with us here today.
MR. SLATTERY: Hi, Jeanne. Great to be with you.
MS. MESERVE: So, what is GE doing to try and meet decarbonization targets?
MR. SLATTERY: Well, if we just frame it up for a moment, GE and our joint venture partner Safran, between us we power about two-thirds of the world’s commercial flights today. So, anything we do is going to have a meaningful impact on the operations of commercial flight around the world. At GE, we’ve just completed our renewal of our fleet, the LEAP engine; the GEnx, which is on the 787 and the 747-8; and of course, the GE9X, which will enter into service towards the end of 2023.
That movement and evolution of our fleet is not enough, Jeanne. We need to do more to achieve the industry’s carbon emission targets by 2050 of halving our carbon emissions. And that’s why just two weeks ago today I was in Paris to announce the launch--with Safran, the launch of the RISE Program, our newest technology development program which will give us leading edge technologies and improved fuel burn by over 20 percent in our new engines that will enter into service in the mid-2030s.
MS. MESERVE: So, put that into context for us. A 20 percent reduction in fuel consumption. How significant is that?
MR. SLATTERY: Well, it’s the single largest jump in decarbonization and fuel reduction that we’ve ever undertaken at GE and at CFM. But to put it into perspective to your question, Jeanne, if you were to deploy that technology in today’s narrow-body fleets, the 737s and the A320s, well, it would be the equivalent of taking off the road 17 million cars. But I want to be clear. The fuel burn reduction of 20 percent is assuming today’s fuel. If we consider using sustainable aviation fuels, we could reduce the CO2 emissions by up to 80 percent. And if we went to hydrogen, green hydrogen, we’d be reducing CO2 emissions by 100 percent.
MS. MESERVE: What are you doing to accelerate the adoption of those fuels?
MR. SLATTERY: Well, development of sustainable aviation fuels is going to be a team effort. It’s going to require governments. It’s going to require regulatory authorities. It’s going to require airports on the infrastructure, the ecosystem. It’s going to require the airlines, and of course the airframers and the engine OEMs to come together to develop that new technology.
From our side, Jeanne, we believe that the science is there to certainly get at least 20 percent improvement. And we believe that the science is there to support a deployment of 100 percent SAF into our engines. In fact, today, Jeanne, in the engines that we’re producing, today our newest technology narrow body engine, the LEAP, you can already use 50 percent of a SAF blend in those engines today. But in the future, we believe that can get to 100 percent SAF in the engines of the future.
MS. MESERVE: Look forward to us and talk to us about two or three innovations you think are on the horizon or just over the horizon for airplane engines.
MR. SLATTERY: Well, look, as we think about our spend, our commitment at GE Aviation, today we’re committing $1.8 billion into R&D--a number not dissimilar to what we invested last year. So, we have a tailwind from our shareholders to support our engineers in the development programs that they’re looking into. And those programs, while the open fan technology, that propulsive technology from the open fan, that’s singularly going to make a massive difference in that target of at least 20 percent.
But the engine will also be hybrid electric, which is a real breakthrough for us as we target those new technologies. And in those materials in the core of the engine, those new materials that we’re developing have a compact core, the collective thermal efficiency coupled with the propulsive efficiency, that’s what we’re focused on in those breakthrough technologies that will now mature throughout the course of this decade to enter into revenue generating service after we’ve launched an engine in the mid-2030s.
MS. MESERVE: So, more and more people are traveling as we emerge from the pandemic. What is your forecast for the industry?
MR. SLATTERY: Well, look, the departures in the first half of 2021 were largely as we’d expected, sort of flat to the exit of 2020. But, Jeanne, if you travel around the U.S.--and I travel almost every week now, and I’ve just started traveling internationally--well, certainly in the U.S., here in the United States, domestic capacity over the summer months is going to be at least 80 percent. And if you’re lucky enough to be traveling on airplane at the moment, the load factors are robust.
I was watching just before I came on air with you, Scott Kirby from United Airlines announcing that United has just turned profitable. So, there are tailwinds of strong support. We expect narrow body aircraft to get back to those 2019 levels by 2023, and that long haul wide body traffic to lag by about a year, so into 2024. So, we have tailwinds, Jeanne. The market is returning. And GE Aviation is planning for that ramp to support our services, customers, and also support Boeing and Airbus as they ramp up production.
MS. MESERVE: John Slattery, president and CEO of GE Aviation. Thanks a lot for joining us.
MR. SLATTERY: Thank you.
MS. MESERVE: And now back to The Washington Post.
MS. ARATANI: Hello, and welcome back. For those of you just joining us, my name is Lori Aratani. I’m transportation reporter here at The Washington Post. We’re glad to have as a next guest Jeremy Baines, president of one of the top renewable fuel companies in the world, Neste US. Jeremy, welcome to Washington Post Live.
MR. BAINES: Hello, Lori. Thank you for having me on the show.
MS. ARATANI: Well, great. Well, we’ll get right to it. I know we’re talking about sustainability today. And one of the things that I think you’ve said is that coming out of the pandemic, it’s going to be even more important to fight against climate change. It’s going to be even more important. So, can you talk about why?
MR. BAINS: Well, Lori, I think--I think we are all desperate to get back to the skies, to meet families, to travel for work, to meet our customers and clients. And after a whole year of being at home or restricted from moving because of COVID, we just want to think about how are we going to travel in the future. Don’t we want to travel more sustainably? And I think that’s what Neste is here to help our customers with, the customers and the flying public, is how can we make flying more sustainable, which is really what we are hearing again and again that people want to do.
MS. ARATANI: Right. And you’ve--that’s an excellent point. And we know that air travel, people miss air travel. They want to get back on planes. They want to connect with their friends and family. But air travel is also a huge source of carbon emissions. I believe commercial air travel accounts for almost 4 percent of total U.S. greenhouse gas emissions. So, can you talk to us about the consequences if airlines don’t start to take action, say in 10 years, in 20 years?
MR. BAINS: Absolutely. And airplanes today, they have a lifespan of 30, 40 years. So, if you order a new plane today, they’re still going to be flying for the next 30 or 40 years. And I think we need to tackle the root cause. The root cause of the climate change, the climate change caused also by airplanes, is the burning of fossil fuels. Now we heard in your early reporting that there’s maybe work ongoing on electric or hydrogen. But that’s many decades in the future. And today, there are no electric cables long enough to power these regional planes, these intercontinental flights. The only solution on the table today is sustainable aviation fuel.
And I think it’s important to realize that sustainable aviation fuel doesn’t add any new carbon into the atmosphere, and it’s just through the production process that there’s some carbon which is made. And that’s why the comments earlier of being able to reduce by 50 to 80 percent of CO2 is fact. And that can happen overnight. The--literally the only change that you need to do is decide to fly on sustainable aviation fuel as opposed to petroleum jet fuel. And therefore, overnight, using the existing planes, the existing infrastructure, the same pilots, the same mechanics, you can really make flying so much more sustainable.
MS. ARATANI: That would be great. Can you talk a little bit about the fuel you produce, what goes into it, and what the process is like?
MR. BAINS: So Neste today, we produce approximately 34 million gallons of fuel. We have the ambition to grow that to over 500 million gallons by 2023. What we use are fats, oils, and greases. Your--the used cooking oil that--from a restaurant. So, you order your fries and your burger. And once that oil is done, we take that oil and convert it into a drop-in safe, sustainable aviation fuel.
To give you an example, Neste has acquired last year a company called Mahoney. Together with Mahoney, we collect from 34,000 restaurants across the country. And that fuel is then today available in places like San Francisco Airport, in Austin, Texas. We’re starting to expand the offering with our partners to be able to target consumers much faster so that our customers or companies are able to fly their employees more sustainably.
MS. ARATANI: Wow. I love the idea that eating french fries is good for the environment. I’m going to stick with that one. That’s great. I know that Neste started as what people might think of as a traditional oil company. So, can you talk a little bit about your evolution?
MR. BAINS: Oh, absolutely. I think Neste, like many, many energy companies out there, we started in refining, petroleum refining. But then about 20, 25 years ago, we really started to embark in how can we make our fuels more sustainable, more renewable. And Neste’s always had a history of making cleaner fuels, more efficient fuels. So going renewable was actually a natural step.
And we’ve now been refining this for the past 15 years. So, we developed our own technology to make renewable diesel. We can use the same technology to make sustainable aviation fuel. And that has now really been the growth engine for Neste. Just last year, our renewables represented nearly 90 percent of Neste’s annual profit. And it’s a business that we are continuing to invest in. Renewables is the future. Renewables is not only the future for Neste but it’s also the future for our society--making things renewable, making things more sustainable.
MS. ARATANI: That’s interesting. Do you have any advice for other companies that might want to make a similar transition? I don’t know that you’re looking for additional competition but--
MR. BAINS: Oh, we are very happy to see actually a lot of the oil companies discovering what we discovered more than 15 years ago. So, we see here in the United States many of the traditional oil companies moving into the renewable space. We’re seeing that in Phillips 66, of Marathon, of Valero, BP. So, there are many companies that are now entering that space. We’re either happy to partner with them to distribute the fuels so that it gets to the customers faster. But we’re also happy to see more renewables available, because renewable fuels have an immediate impact on CO2 reduction.
And the market is huge. We were talking about passengers taking back to the skies. There’s a lot of petroleum jet fuel that has to be replaced with sustainable aviation fuel.
MS. ARATANI: What do you think are the biggest challenges to creating a more sustainable aviation and energy sector?
MR. BAINS: I think we’re--I think we’re starting to see it. We’re really starting to see the consumers, the customers, and the companies demanding more sustainability. We see the regulators and legislators hearing that call and putting in place incentives for the uptake of sustainable fuels in general. So, I’m optimistic about the future. I really see the opportunity for sustainable fuels to take a larger and larger share of the market. It’s been a slow evolution. I think it’s fair to say that the sustainable aviation fuel industry is still in a nascent industry. But with everything that’s happening in society, in Washington, D.C., et cetera, I’m really confident that this industry is about to take off.
MS. ARATANI: In aviation, you mention that it’s sort of been a slow acceptance. What do you think is behind that? Is it just the unknown? We’ve always used this type of fuel so we’re not sure about that? What do you think is behind that hesitance?
MR. BAINS: I think there’s always--there’s always a question about the unknown. However, this fuel has been clearly demonstrated to be safe, to be efficient, to be renewable. Then, of course, there’s the aspect that this has to scale up. The petroleum industry has had more than a hundred years to perfect this, to build the infrastructure, the pipeline, the access to the airports, the airlines. This is something that the renewables industry has now had to enter into as well.
Then there’s the cost aspect. And I think we heard early on that sustainable aviation fuel is more expensive. And yes, it’s fair to say it is more expensive. Will it ever be cheaper than petroleum jet fuel? I don’t think it will be. But then at the same time, burning fossil fuels will in the future not be acceptable, either. So--and then we also have to consider the environmental benefit of it, the mitigation of pollution in ESG areas, and just the fact of fighting climate change. That has--that has got a value, too.
MS. ARATANI: Yeah. You point out there are tradeoffs. There are always tradeoffs. You know, there are a lot of alternative fuel sources out there. There’s hydrogen, electricity, ethanol. What role do you think all of these will play in reducing our carbon footprint?
MR. BAINS: We need all alternative sources of fuel. Now like I said a moment ago, they all have different technological maturities. We heard talking earlier today about electric for maybe small regional planes of two to three to four passengers. Today, I don’t fly on those planes. I fly on the regional planes with hundreds of passengers. And unfortunately, there’s nothing on the drawing board for the next 10, 20 years that would fly on electric or hydrogen.
So, while it’s important that we keep developing that technology, that we keep looking at ways to scaling it up and to make it move faster, we also need to tackle climate change today. There are tens of thousands of planes in the sky today that we are making them more efficient through winglets, through more efficient engines, et cetera. But the root cause of burning the petroleum jet fuel still needs to be tackled.
MS. ARATANI: That’s true. Well, we have a question from a review. Maureen Herzog from Colorado would like to know what can the airline industry do to reduce their footprint with regards to climate change?
MR. BAINS: Maureen, that’s an excellent question. And I think the airline industry has already done a tremendous effort to reduce the emissions. They’re buying modern planes with winglets, more efficient engines. We heard from GE how they reduced the emissions. More efficient rooting. Making the planes lighter. Having less waste on board the planes. All these things greatly contribute to the reduction of climate change emissions.
At the same time, we also need to encourage the uptake of sustainable aviation fuel. As today, that is the only fuel that will actually tackle the root cause of climate change from planes.
MS. ARATANI: Okay, great. Do you have any thoughts on other alternative fuel options being developed for aviation?
MR. BAINS: So, I think there are many different routes to making renewable aviation fuels, sustainable aviation fuel. Neste works through used cooking oils and waste oils. There are routes through ethanol. Neste’s also investigating, actively investigating using algae. We are also looking at municipal solid waste and forestry waste, which would be quite exciting. So, when the trees are harvested, the tree tops and the branches, they could still be converted into fuel, which would then also reduce aviation fuel. So, we see lots of different technology routes from very many different feedstocks to making sustainable aviation fuel.
MS. ARATANI: Great. Can you talk about--we talk a lot about how sustainable aviation fuel is good for the environment. Can you quantify for our viewers what difference using fuel produced by Neste makes on the environment or in the environment?
MR. BAINS: So, in terms of--in terms of greenhouse gas emissions, but especially CO2, burning SAF in a jet engine does not add any CO2 to the atmosphere, because the CO2 in the fuel was present in the used cooking oil, was present in the vegetable oil, so the animal fats that we use. So, burning the fuel doesn’t add any CO2. So, from that point of view, it is actually net zero. Where the--where the pollution comes from today is in the manufacturing of the fuel and the transportation of the fuel. That’s why Neste is committed to going to carbon-neutral production by 2035, so that we move already the whole production side of the CO2 footprint. And as we work then with our partners to make the transportation of the used cooking oils or the waste to our refinery and then from the refinery to finish the sustainable aviation fuel to the airport more efficient, we reduce that as well. So, the aim is that eventually we are able to provide a fuel to our customers that has net zero emissions.
So, these are--these are real possibilities in the decades to come. Sustainable aviation fuel also has less particulate matter, produces less carbon black in the atmosphere, which has been associated to the seeding of clouds. So apart from just a CO2 impact, there’s also the impact on the other pollutants that are created in the atmosphere and very often in the communities near the airports from which the planes take off and land.
MS. ARATANI: You bring up such a good point, which is I think we tend to think that maybe there’s just one solution. But really, it’s the system, right? It’s not just producing the fuel that is sustainable but being able to distribute it in a sustainable way. That’s so interesting.
MR. BAINS: Absolutely. Absolutely. It’s the whole lifecycle analysis. From the moment you get the raw material to it’s been produced into a fuel goes into the plane and then it’s combusted, so you need to really add up all the carbon in the whole chain. And when Neste does that, we are able to demonstrate that we’ve reduced the emissions by up to 80 percent compared to just combusting petroleum jet fuel.
MS. ARATANI: Well, great. Well, this has been such an interesting conversation. But unfortunately, we’re out of time. So, thank you very much, Jeremy Bains, for joining us here on Washington Post Live.
MR. BAINS: My pleasure. It was enjoyable joining you. Thank you, Lori.
MS. ARATANI: Great. And I want to remind our viewers that we have a great program tomorrow. My colleague Robin Givhan will be--my colleague Robin Givhan will be interviewing actor and rapper Daveed Diggs tomorrow. So be sure to register at WashingtonPostLive.com. And there, when you go there, you’ll see a preview of some of the other great programs that we have coming up.
So, thank you so much for joining us today, and please come back and watch Washington Post Live again. Thank you.
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