WEBVTT - Biofuels and EV Charging in Carbon Credit Tussle 0:00:00.240 --> 0:00:03.199 Hi, this is Dana Perkins and you're listening to Switched 0:00:03.240 --> 0:00:05.920 on the Banna Of podcast. Now today we're going to 0:00:06.000 --> 0:00:09.280 talk about biofuels and electric vehicles in the same breath, 0:00:09.400 --> 0:00:13.000 because really we're thinking about road transport. The first part 0:00:13.039 --> 0:00:14.960 of the show, we're really going to focus on some 0:00:15.040 --> 0:00:18.239 of the main dynamics of biofuels, what they are, where 0:00:18.239 --> 0:00:20.599 they come from, what some of the policy and incentives are. 0:00:20.920 --> 0:00:24.280 We have two analysts on our team from different teams actually, 0:00:24.280 --> 0:00:26.920 that are going to be able to really develop this 0:00:27.000 --> 0:00:30.040 for you because one of them is Ryan Fisher, he 0:00:30.360 --> 0:00:33.920 is our lead Charging infrastructure analyst, and the other is 0:00:34.040 --> 0:00:37.080 Jade Patterson and he is a senior associate focused on 0:00:37.159 --> 0:00:40.320 renewable fuels, and they both come at this from a 0:00:40.560 --> 0:00:44.159 very different side, but have been able to collaborate on 0:00:44.200 --> 0:00:46.919 a number of different research notes and tools on our 0:00:46.960 --> 0:00:49.960 side that it gives them a new understanding on what 0:00:50.040 --> 0:00:53.040 that future of road transport really looks like in the 0:00:53.120 --> 0:00:55.320 longer term. Now, they're going to throw out some really 0:00:55.360 --> 0:01:00.280 interesting things around various policy incentives and credits release to 0:01:00.320 --> 0:01:02.480 be at the center of this. Now they get into 0:01:02.480 --> 0:01:05.000 some detail on different types of credit schemes, and it 0:01:05.040 --> 0:01:08.199 may be worth just quickly simplifying this for you. So 0:01:08.400 --> 0:01:11.240 there really are two main mechanisms that they get into. 0:01:11.560 --> 0:01:14.360 One has to do with volume targets and another one 0:01:14.400 --> 0:01:17.440 has to do with carbon reductions regardless of fuel source. 0:01:17.920 --> 0:01:21.440 So let's think now about what the future of biofuels 0:01:21.920 --> 0:01:25.080 and how it interplaces with the electric vehicle industry, what 0:01:25.280 --> 0:01:28.560 that all really looks like. As a quick reminder, BNP 0:01:28.720 --> 0:01:31.480 does not provide investment or strategy advice, and we have 0:01:31.600 --> 0:01:33.680 a full disclaimer that can be found at the end 0:01:33.680 --> 0:01:36.640 of the show and now on When Energy Too to 0:01:36.840 --> 0:01:45.399 Jade and Run. So today we're going to talk about biofuels, 0:01:45.440 --> 0:01:47.760 but it's going to be mixed in with a conversation 0:01:47.920 --> 0:01:50.720 around transportation, one of the things that biofuels is so 0:01:51.000 --> 0:01:55.520 very good for, or maybe inferior, depending upon who you're asking. 0:01:55.600 --> 0:01:57.840 In any case, we've got two of our analysts on 0:01:57.920 --> 0:02:00.640 today to really talk about how this is playing out, 0:02:00.640 --> 0:02:05.400 how biofuels is playing into the competitively potentially ev market. 0:02:05.760 --> 0:02:09.000 And I'm joined today by Jade Hey Danna. It's good 0:02:09.000 --> 0:02:10.600 to be here with you, Thanks for having me, and 0:02:10.680 --> 0:02:14.040 also with Ryan Hey Dana will we spe here, so 0:02:14.080 --> 0:02:15.960 one of the things we actually do at our summits. 0:02:16.000 --> 0:02:18.560 And just back a little bit earlier. In February of 0:02:18.639 --> 0:02:22.360 this year, we had our Transportation Focus Summit in San Francisco, 0:02:22.440 --> 0:02:24.520 and we did end up having one of our BNF 0:02:24.520 --> 0:02:26.600 debates where we get two of our analysts on stage 0:02:26.600 --> 0:02:29.400 to kind of argue differing points. Now we'll see how 0:02:29.400 --> 0:02:32.440 many things Jade and Ryan actually disagree with each other 0:02:32.560 --> 0:02:35.760 on today when we get into this. But Jade is 0:02:35.800 --> 0:02:38.440 more focused on the biofuel side of things and Ryan 0:02:38.760 --> 0:02:42.000 is focused on the electric vehicle side of things, So 0:02:42.400 --> 0:02:44.440 there will be some places where I'm sure you guys 0:02:44.440 --> 0:02:47.160 are looking at things through slightly different prism as we 0:02:47.240 --> 0:02:50.839 think about the transportation transition how this all plays out. 0:02:51.480 --> 0:02:55.320 So while we get started on this topic, I'd like 0:02:55.480 --> 0:02:59.160 to first ask why are we talking about biofuels, Jade, 0:02:59.160 --> 0:03:02.799 I mean some respect, I'm asking you to explain what 0:03:02.880 --> 0:03:04.960 your role is in the business and what you research. 0:03:05.160 --> 0:03:08.920 Because when I think back to when I first got 0:03:08.960 --> 0:03:12.520 involved with bin ef to begin with, this could be 0:03:12.639 --> 0:03:14.880 either a long time or not very long ago, depending 0:03:14.919 --> 0:03:18.640 upon who you're asking. But let's say ten plus years ago, 0:03:18.960 --> 0:03:21.280 there was a lot of conversation around wind, solar and 0:03:21.360 --> 0:03:26.400 biofuels and less on some of the other complexity around 0:03:26.720 --> 0:03:30.400 the industry, and now biofuels is very much back in 0:03:30.440 --> 0:03:34.200 the conversation. So maybe you could also explain why this 0:03:34.280 --> 0:03:36.000 is the right time for us to be having a 0:03:36.040 --> 0:03:40.840 conversation about biofuels. Yeah, thanks, Dana, that's a really great question, 0:03:41.280 --> 0:03:43.840 and it's kind of worth noting that. Yeah, you're right, 0:03:43.840 --> 0:03:46.560 biofuels were really popular and kind of the the early two 0:03:46.600 --> 0:03:49.880 thousands up to the kind of twenty tens when they 0:03:49.920 --> 0:03:52.840 sort of started to plateau. And part of the reason 0:03:52.880 --> 0:03:55.640 that biofuels sort of dropped off the radar was a 0:03:55.680 --> 0:03:58.320 lot of the conventional biofuels that we talk about, so 0:03:58.520 --> 0:04:01.920 sanol and biodiesel, they actually need to be blended within 0:04:02.360 --> 0:04:05.880 gasoline for ethanols case, and diesel for biodesels case. And 0:04:06.080 --> 0:04:09.040 most of those blend rates are typically for ethanol up 0:04:09.080 --> 0:04:12.280 to around ten percent due to engine performance issues of 0:04:12.360 --> 0:04:14.720 going any higher, and for biody so it's typically around 0:04:14.760 --> 0:04:17.760 five percent. So that's really sort of capped the growth 0:04:17.760 --> 0:04:21.640 of those biofuels that across the world in recent years. However, 0:04:21.760 --> 0:04:25.479 with the new growth of different types of biofuels. So 0:04:25.480 --> 0:04:27.200 one of the main ones that we've been talking about 0:04:27.279 --> 0:04:31.200 lately is renewable diesel. In what's different about renewable diesel 0:04:31.240 --> 0:04:35.200 compared to say, biodesel, is it's chemically similar with existing 0:04:35.279 --> 0:04:37.560 diesel from crude oil. And so what that means is 0:04:37.560 --> 0:04:39.760 you don't have to blend renewable diesel like you do 0:04:39.880 --> 0:04:43.440 bio diesel. And so this allows for the market to 0:04:43.520 --> 0:04:47.120 grow beyond those blending limits of say five percent, and 0:04:47.200 --> 0:04:49.960 go up as high as one hundred percent theoretically now, 0:04:50.040 --> 0:04:52.040 as we can kind of get into later. Probably a 0:04:52.080 --> 0:04:54.800 lot of the limitations now are around the feedstocks used 0:04:54.800 --> 0:04:57.640 to make biofuels, which rely on energy, crops and other 0:04:57.760 --> 0:05:00.440 sources to be produced. So that's what it's been really 0:05:00.520 --> 0:05:03.440 driving that growth lately, is this kind of renaissance, this 0:05:03.520 --> 0:05:07.080 growth of new types of biofuels like renewable diesel, and 0:05:07.320 --> 0:05:10.520 we expect the capacity to really grow drastically from around 0:05:10.880 --> 0:05:14.320 four or five billion gallons per year globally for renewable 0:05:14.320 --> 0:05:17.880 diesel up to around sixteen billion gallons, So a pretty 0:05:17.920 --> 0:05:20.679 big jump in capacity expected in the next few years. 0:05:20.880 --> 0:05:22.640 And let's start at the beginning, or at least for 0:05:22.760 --> 0:05:26.720 the biofuel itself, in terms of the feedstock, what feedstocks 0:05:26.800 --> 0:05:30.560 are really popular right now and which ones maybe are 0:05:30.680 --> 0:05:34.960 more contentious. When you talk about ethanol and biodesel, what 0:05:35.040 --> 0:05:38.560 we call the conventional fuel is those typically come from crops. 0:05:38.600 --> 0:05:41.240 So for ethanol in the US, and it's kind of 0:05:41.240 --> 0:05:44.080 worth noting that the US is the largest biofuel producer 0:05:44.080 --> 0:05:46.600 in the world. Second is Brazil, and that EU is 0:05:46.640 --> 0:05:49.240 in third, and so most of ethanol in the US 0:05:49.440 --> 0:05:52.720 is produced from corn, around almost one hundred percent. In Brazil, 0:05:52.800 --> 0:05:54.839 a lot of that comes from sugarcane, and in the 0:05:54.839 --> 0:05:57.960 EU it's kind of an even mixed really of wheat, sugarcane, 0:05:58.040 --> 0:06:00.440 and ethanol. And when you look over to the biodies aside, 0:06:00.640 --> 0:06:03.680 the majority of those feedstocks are composed of what we 0:06:03.680 --> 0:06:06.640 call vegetable oils, so that's things like rape seed oil 0:06:06.760 --> 0:06:09.760 or canola, as well as soybean oil and palm oil, 0:06:09.800 --> 0:06:13.160 which was historically another kind of major source. So those 0:06:13.160 --> 0:06:17.039 are the main kind of historical feedstocks. And today one 0:06:17.080 --> 0:06:19.440 of the big shifts that we're seeing with renewable diesel 0:06:19.520 --> 0:06:22.599 is it's still relying on the same feedstocks that we're 0:06:22.760 --> 0:06:26.640 used for biodiesel, so again you're vegetable oils, but it's 0:06:26.680 --> 0:06:30.440 also trying to rebrand itself as using more waste oils. 0:06:30.440 --> 0:06:33.680 So that's things like use cooking oil, animal fats from 0:06:33.720 --> 0:06:36.760 meat processing facilities, as well as things like corn oil, 0:06:36.800 --> 0:06:39.240 which comes from making us at all. Actually, and so 0:06:39.560 --> 0:06:41.960 you see the shift of kind of renewable fuels starting 0:06:41.960 --> 0:06:45.480 to use more kind of waste oils. And that's really 0:06:45.520 --> 0:06:47.599 what I think the goal is for a lot of 0:06:47.600 --> 0:06:50.960 these projects is to leverage more waste instead of creating 0:06:51.000 --> 0:06:54.039 more energy crops, which creates land use change and that 0:06:54.080 --> 0:06:56.080 sort of thing. And so let's say, in theory where 0:06:56.120 --> 0:07:00.520 we are using more waste products to create the bio fuels, 0:07:00.920 --> 0:07:05.760 are they considered still quite sustainable, because if we are 0:07:05.839 --> 0:07:08.200 thinking back to two thousand or even to twenty ten, 0:07:08.400 --> 0:07:10.440 the view was that they burn cleaner. I could draw 0:07:10.440 --> 0:07:13.840 a parallel here with natural gas. But because it burns cleaner, 0:07:13.880 --> 0:07:16.960 it is more sustainable. Is that still very much the 0:07:17.040 --> 0:07:19.160 view of them or are they seen as sort of 0:07:19.200 --> 0:07:23.840 a bit inferior to perhaps electrifying certain parts of the grid. 0:07:23.840 --> 0:07:25.600 And I think this will end up taking us into 0:07:25.680 --> 0:07:29.320 the electric vehicle conversation in some respects because when you 0:07:29.360 --> 0:07:32.000 think about batteries and then the upfront emissions, but then 0:07:32.280 --> 0:07:36.080 tailpipe emissions reduce dramatically. Yeah, you make a good point there. 0:07:36.400 --> 0:07:38.520 So you know, when you burn biofuels, as you do 0:07:38.560 --> 0:07:41.920 with hydrocarbons from fossil fuels, you still have tailpipe emissions. 0:07:41.920 --> 0:07:44.600 You can't really get away from that with biofuels. But 0:07:44.720 --> 0:07:48.760 biofuels do typically have a lower life cycle carbon emissions 0:07:48.800 --> 0:07:52.280 profile then say conventional fuel, And it really does range 0:07:52.280 --> 0:07:55.360 depending on the feedstock and depending on the process that's 0:07:55.480 --> 0:07:58.920 utilized to make that fuel. And so let's take the extremes. 0:07:58.920 --> 0:08:01.760 If you look at ethanol right made from corn, it 0:08:01.800 --> 0:08:05.400 typically has a higher carbon emissions profile than say, using 0:08:05.720 --> 0:08:08.400 US cooking oil. And the main driver behind that is 0:08:08.440 --> 0:08:11.360 because when you look at the life cycle analysis of 0:08:11.440 --> 0:08:14.680 making corn ethanol, you have to also factor in the 0:08:14.760 --> 0:08:18.080 process of making the corn need fertilizer, you need gasoline 0:08:18.120 --> 0:08:21.560 or diesel to power your tractor to actually harvest that product, 0:08:21.640 --> 0:08:24.480 and then to make the biofuel itself converting it from 0:08:24.640 --> 0:08:27.480 corn and start into an alcohol. And so you have 0:08:27.520 --> 0:08:30.320 all these kind of process emissions that go along with that. 0:08:30.760 --> 0:08:32.959 Was with a waste oil like say use cooking oil. 0:08:33.000 --> 0:08:35.080 Because it's a waste you don't have to account for 0:08:35.120 --> 0:08:38.679 all the upstream emissions for producing that molecule. You kind 0:08:38.679 --> 0:08:41.240 of start at the point of processing it and converting 0:08:41.280 --> 0:08:42.959 it in. So all that to say is you can 0:08:42.960 --> 0:08:46.760 see for biofuels it's typically around either like a forty 0:08:46.760 --> 0:08:50.240 percent reduction for ethanol's case, and then all the way 0:08:50.280 --> 0:08:52.880 up to an eighty percent reduction and carbon emissions for 0:08:52.960 --> 0:08:55.120 say like a used cooking oil. And while we're still 0:08:55.120 --> 0:08:57.840 getting our feet under us, I think of biofuels and 0:08:57.880 --> 0:09:02.000 I think of Brazil, what other regions in the world 0:09:02.240 --> 0:09:06.079 are also biofuels producers in a big way? And then additionally, 0:09:06.120 --> 0:09:08.600 let's take it a step further, and what is the 0:09:08.600 --> 0:09:11.320 policy environment right now? Yeah, I mean I think that 0:09:11.400 --> 0:09:13.719 the policy environment is all over the map if we 0:09:13.800 --> 0:09:16.040 take a step back and I think about why these 0:09:16.040 --> 0:09:19.840 biofield policies were enacted originally. Take the US for example, 0:09:20.000 --> 0:09:23.200 the reason for this biofield policy was more driven and 0:09:23.240 --> 0:09:26.320 today still is by energy security. So when you look 0:09:26.360 --> 0:09:29.640 back before the shale boom, and you know early two thousands, 0:09:29.679 --> 0:09:32.520 the US was only around the third largest producer of 0:09:32.559 --> 0:09:35.280 oil in the world and relied heavily on foreign oil 0:09:35.360 --> 0:09:38.520 from Russia and Saudi Arabia and other Middle Eastern countries. 0:09:38.559 --> 0:09:40.480 And that was a big problem, right, you know, did 0:09:40.520 --> 0:09:43.520 a lot of tententious oil trade issues and that sort 0:09:43.520 --> 0:09:46.880 of thing which sent oil prices really made them really volatile, really, 0:09:46.920 --> 0:09:49.440 and so these biolefields policies were meant to kind of 0:09:49.480 --> 0:09:54.360 combat that concern around energy security and not really focused 0:09:54.400 --> 0:09:56.719 on reducing carbon emissions. And so I think that's one 0:09:56.720 --> 0:09:59.520 of the big problems with the existing policy. Like say, 0:09:59.559 --> 0:10:01.959 there were new fuel standard in the US, which is 0:10:02.000 --> 0:10:04.480 the federal policy, and you have other policies now that 0:10:04.480 --> 0:10:07.880 are kind of being enacted that are helping to incentivize 0:10:07.920 --> 0:10:11.400 more carbon emissions reductions, like the California Low Carbon Fuel Standard, 0:10:11.400 --> 0:10:15.640 for example, which basically credits biofuels or any even electric 0:10:15.679 --> 0:10:19.760 vehicles to reduce carbon emissions and be rewarded for that 0:10:19.840 --> 0:10:23.040 emissions reduction rather than say just a blanket kind of 0:10:23.240 --> 0:10:27.560 quota or mandate for a certain biofuel. Now, for a 0:10:27.640 --> 0:10:31.560 very short break, stay with us, and then just coming 0:10:31.600 --> 0:10:34.560 back to the question around other parts of the world. 0:10:34.720 --> 0:10:39.080 Is Brazil really the center of the biofuels industry? Brazil 0:10:39.200 --> 0:10:42.440 in terms of supply is second behind the US in 0:10:42.520 --> 0:10:46.320 terms of total output. All amazing good, I had it wrong. 0:10:46.400 --> 0:10:50.959 I need to associate it with my home country exactly. Yeah. 0:10:51.000 --> 0:10:54.000 So if you put the US, Brazil and EU together 0:10:54.080 --> 0:10:57.240 that there accounts for around eighty percent of biofuel supply 0:10:57.320 --> 0:10:59.679 in the world. So those are the top three regions 0:10:59.720 --> 0:11:03.480 really that when we talk about biofuels competing with evs 0:11:03.520 --> 0:11:05.840 and being used to decarbonize, those are the markets that 0:11:05.880 --> 0:11:09.080 we're looking at. And the US and the EU particularly 0:11:09.080 --> 0:11:11.640 are with the Inflation Reduction Act and the EU with 0:11:11.760 --> 0:11:14.880 the Red three the Directive and other EU Fit for 0:11:14.960 --> 0:11:19.160 fifty five discussions. That's really what's bringing biofuels back to 0:11:19.200 --> 0:11:21.480 the forefront to figure out how are we going to 0:11:21.840 --> 0:11:25.640 actually decarbonize our transportation sector, which I think accounts for 0:11:25.679 --> 0:11:28.640 around a quarter of global emissions, So it's a big problem. 0:11:28.720 --> 0:11:31.160 And trying to figure out where these where biofuels and 0:11:31.160 --> 0:11:33.520 where evs fit in and how they kind of work 0:11:33.600 --> 0:11:36.199 together is the big question that I think Ryan trying 0:11:36.240 --> 0:11:40.280 to help understand our biofuels posed to win in a 0:11:40.280 --> 0:11:43.640 big way with the US Inflation Reduction Act. There's a 0:11:43.640 --> 0:11:45.600 few changes that have been made. It's mostly kind of 0:11:45.600 --> 0:11:49.480 been an extension of existing policies. The biggest change really 0:11:49.480 --> 0:11:51.960 in terms of biofuels has actually been the addition of 0:11:51.960 --> 0:11:55.920 a sustainable aviation fuel tax credit, which basically has a 0:11:56.040 --> 0:11:59.360 higher value in terms of its dollars per gallon incentive 0:11:59.360 --> 0:12:01.760 than say a road fuel and so I think that's 0:12:01.760 --> 0:12:05.400 actually the US's way of trying to pivot biofuels away 0:12:05.480 --> 0:12:08.360 from just simply a road seal and using it more 0:12:08.360 --> 0:12:11.840 for other industries like aviation, where electrification is less of 0:12:11.840 --> 0:12:16.360 a viable solution. So you would mention sustainable aviation fuels. 0:12:16.640 --> 0:12:20.280 And I'm thinking just generally of fuels, and we will 0:12:20.400 --> 0:12:22.600 very much come to the electric vehicle part of things 0:12:22.640 --> 0:12:24.760 in just a moment. But when we're thinking about fuels, 0:12:24.760 --> 0:12:27.520 then I think oil and gas companies. Is the biofuel 0:12:27.559 --> 0:12:30.760 space something that the oil and gas community is really 0:12:30.800 --> 0:12:35.559 gravitating toward or are these really disconnected but cooperating industries. 0:12:36.600 --> 0:12:39.199 That's a very great question, and I'd say it's sort 0:12:39.200 --> 0:12:43.520 of a moving target. Historically, the biofuels industry and the 0:12:43.600 --> 0:12:45.960 oil and gas industry have really been at odds with 0:12:46.000 --> 0:12:48.400 one another. You know, you have the bioflowes industry that's 0:12:48.480 --> 0:12:52.400 asking the government to ramp up the quota for more biofuels, 0:12:52.440 --> 0:12:55.880 which obviously hurts the demand for oil and gas, and 0:12:55.920 --> 0:12:58.599 so the oil companies are kind of against that. Additionally, 0:12:59.040 --> 0:13:01.720 the way the policies work, at least in the US 0:13:01.920 --> 0:13:04.920 is the refiners are the obligated parties that have to 0:13:05.040 --> 0:13:07.760 either blend biofuels or they have to buy these credits 0:13:07.920 --> 0:13:11.640 to offset not using as much biofuels to meet their obligation. 0:13:12.160 --> 0:13:14.360 And so what that means it hurts the margins, It 0:13:14.480 --> 0:13:17.640 hurts the profits for these oil and gas companies, and 0:13:17.720 --> 0:13:19.760 so historically a lot of oil and gas companies were 0:13:19.800 --> 0:13:23.280 against the use of biofuels. However, I think that narrative 0:13:23.280 --> 0:13:25.600 has started to shift over the last let's say five 0:13:25.679 --> 0:13:28.520 years or so, and I think what's happening is actually 0:13:28.520 --> 0:13:31.560 a lot of the oil and gas companies, instead of say, 0:13:31.600 --> 0:13:36.000 buying these credits from another energy producer, have decided to 0:13:36.040 --> 0:13:40.000 just own those biofuel production facilities themselves. Valero is a 0:13:40.040 --> 0:13:42.200 great example of that. They and I think around ten 0:13:42.280 --> 0:13:44.600 percent of ethanol production in the US. Now there are 0:13:44.679 --> 0:13:47.760 major US refiner of companies like Chevron and VP also 0:13:47.840 --> 0:13:50.920 kind of making entrances into this space. Chevron just bought 0:13:50.960 --> 0:13:55.080 Renewable Energy Group last year, which is a major diesel producer, 0:13:55.160 --> 0:13:56.920 And so you're starting to kind of see these oil 0:13:56.920 --> 0:14:00.280 companies start to invest in the biofuel space to have 0:14:00.360 --> 0:14:03.240 to buy those credits and be beholden to those swings 0:14:03.240 --> 0:14:06.199 in credit prices and actually generate the credits themselves. So 0:14:06.200 --> 0:14:08.679 I think that's actually been the shift, the oil companies 0:14:08.679 --> 0:14:11.760 really starting to take part in the biofuel space. So, 0:14:12.000 --> 0:14:15.680 as promised, let's switch into EVS and let's give Ryan 0:14:15.720 --> 0:14:20.160 a chance to be a participant to our lovely conversation here. 0:14:20.520 --> 0:14:23.680 When we're thinking about road transport, vehicles are very much 0:14:24.040 --> 0:14:29.920 omnipresent in this debate about how we decarbonize cities and 0:14:30.360 --> 0:14:33.520 entire countries when they're looking at transport related emissions. But 0:14:33.920 --> 0:14:37.520 biofuels certainly play an important role. As you've outlined, there 0:14:37.600 --> 0:14:40.680 are important policy incentives which do give them an edge. 0:14:40.760 --> 0:14:44.600 Where are we finding cooperation and perhaps conflict between the 0:14:44.680 --> 0:14:48.640 electric vehicle space and perhaps how these policies interplay with 0:14:48.800 --> 0:14:52.440 electric vehicles and biofuels together. Yeah, it's a really interesting 0:14:52.480 --> 0:14:54.160 one and it's great to hear kind of all Jade's 0:14:54.160 --> 0:14:56.880 answers as well. So I'll come at this very much 0:14:56.920 --> 0:14:59.680 from the EV side, maybe not knowing much about both 0:14:59.760 --> 0:15:02.000 fuel at all, and people really want to know how 0:15:02.040 --> 0:15:03.960 do you make money out of EV charging and these 0:15:04.200 --> 0:15:07.960 carbon credits that you can create by delivering electricity to evs. 0:15:07.960 --> 0:15:09.880 And I'm like, Okay, this is a cool topic. Let's 0:15:09.880 --> 0:15:12.440 explore this a little bit further. And these credits can 0:15:12.440 --> 0:15:14.440 account for the ten percent of the revenues for some 0:15:14.480 --> 0:15:17.040 of these public charging companies. So we started doing some 0:15:17.120 --> 0:15:19.000 research on that, and as I get further, I start 0:15:19.040 --> 0:15:23.240 to realize there's this kind of friction between biofuels and 0:15:23.320 --> 0:15:26.440 evs when you get to the subsidies and what's going 0:15:26.440 --> 0:15:29.600 on in these systems. Then Labe Jade described a little 0:15:29.600 --> 0:15:31.680 bit the funds going out there, and really what was 0:15:31.720 --> 0:15:34.640 the political aim of those funds. The one in the US, 0:15:34.480 --> 0:15:37.680 there's kind of forty billion scheme the Realable Fuel Standards 0:15:37.760 --> 0:15:41.680 a year aiming to produce biofuels. But then on a 0:15:41.800 --> 0:15:44.520 country or even global scale. Now everything's about evs and 0:15:44.560 --> 0:15:48.560 the OEM's having evs, so setting kind of volumes of 0:15:48.640 --> 0:15:51.440 biofuels largely, to be honest, when you look at some 0:15:51.440 --> 0:15:53.920 of these schemes, seems a bit strange when really the 0:15:54.000 --> 0:15:57.160 aim should be carbon reduction, and arguably that the biggest 0:15:57.160 --> 0:16:00.800 carbon reduction can be attrieved by moving to electrics. You 0:16:00.920 --> 0:16:03.440 sort of see different regions and different ways, but the 0:16:03.520 --> 0:16:06.600 low carbon Fuel Standard is one that's now rolling out everywhere. 0:16:06.600 --> 0:16:08.160 So what they do is they set a target for 0:16:08.200 --> 0:16:10.920 the emissions of fuels and if you're above that target, 0:16:10.920 --> 0:16:13.680 which largely gasoline and diesel are, you generate deficits, and 0:16:13.760 --> 0:16:16.880 if you're below then you generate credits. The credits so 0:16:16.920 --> 0:16:19.760 far have been heavily dominated really for maybe in the 0:16:19.800 --> 0:16:23.320 past ten years by biofuels and fuels like that. But 0:16:23.400 --> 0:16:25.720 slowly evs are obviously coming on to the market and 0:16:25.720 --> 0:16:27.600 becoming a bigger part of the fleet, and they're now 0:16:27.760 --> 0:16:30.720 like edging up to fifteen twenty percent of those credits, 0:16:30.720 --> 0:16:33.280 so you see this issue. What that's actually done is 0:16:33.280 --> 0:16:35.200 tank the credit price in a way, because you've now 0:16:35.200 --> 0:16:37.280 got this big supply of removable diesel that Jake kind 0:16:37.320 --> 0:16:39.200 of talks about and then you've got this bigg supply 0:16:39.280 --> 0:16:42.720 of electricity credits and with that tanking the credit price, 0:16:43.200 --> 0:16:45.840 then nobody kind of wins because you might not meet 0:16:45.880 --> 0:16:48.800 your aims. So from a perspective one outside you look, 0:16:49.200 --> 0:16:51.520 what do you actually want to do? From a political perspective, 0:16:51.880 --> 0:16:54.160 and a lot of the biofuels being Jade pointed on 0:16:54.240 --> 0:16:58.400 it that they're produced by food crops Jade called energy crops, 0:16:58.440 --> 0:17:00.800 which I don't really like the phrase, and it's the 0:17:00.840 --> 0:17:03.240 same as like renewable diesel. It gives people an aspect 0:17:03.320 --> 0:17:05.600 that this is really a good thing. But I do 0:17:05.760 --> 0:17:07.480 come to the question of how good is it. The 0:17:07.520 --> 0:17:09.879 biofuels in Europe thing it was seventy five percent of 0:17:09.920 --> 0:17:13.920 those currently made from food. The biofuels in America, you've 0:17:13.960 --> 0:17:18.280 got corn monocropped across huge waves of the US. I 0:17:18.359 --> 0:17:20.240 think it worked out and it was nearly the whole 0:17:20.280 --> 0:17:22.600 size of the UK would be taken up just by 0:17:22.640 --> 0:17:25.920 corn that is going into this fuel. From a policy 0:17:25.960 --> 0:17:28.119 making standpoint, it does bring the question as to what 0:17:28.280 --> 0:17:31.520 really is sustainable and what isn't. But there's clearly some 0:17:31.640 --> 0:17:35.640 hard to abate sectors that might need biofuels, aviation, shipping. 0:17:36.040 --> 0:17:39.159 How do you then have this market that's available without 0:17:39.160 --> 0:17:41.200 giving it the kind of stepping stone to get there. 0:17:41.240 --> 0:17:44.000 So I think there is some arguments so use road transport, 0:17:44.040 --> 0:17:46.680 scale some of these systems up and move. But I'm 0:17:46.680 --> 0:17:49.439 a bit pessimistic that you can actually make these fuels 0:17:49.440 --> 0:17:52.280 with waste on the scales that are really needed. Having 0:17:52.320 --> 0:17:54.480 looked at this in any kind of detail, you brought 0:17:54.560 --> 0:17:57.640 up a couple of things. But firstly, Jade, you've been challenged. 0:17:57.800 --> 0:17:59.640 So I think you sort of at this point need 0:17:59.720 --> 0:18:04.560 to defend biofuels and their sustainability credentials. Yeah, you know, 0:18:04.840 --> 0:18:07.240 I think this is a tricky one to tackle, right. 0:18:07.760 --> 0:18:11.440 There is certainly a lot of questions around sinability of biofuels. 0:18:11.480 --> 0:18:14.879 You know, you can ask ten people what's sustinability of 0:18:14.960 --> 0:18:17.439 corn ethanol and you're gonna get ten different answers. And 0:18:17.560 --> 0:18:19.680 I think Ryan's right, like a lot of these energy 0:18:19.720 --> 0:18:23.240 crops that I call them do compete with food that actually, 0:18:23.359 --> 0:18:25.280 you know, when you get down to the nuances of it, 0:18:25.359 --> 0:18:27.720 For example, corn, a lot of it that's grown to 0:18:27.800 --> 0:18:30.680 make us and all actually isn't used for food consumption 0:18:30.800 --> 0:18:34.919 for humans. It can produce byproducts such as different grains 0:18:34.920 --> 0:18:36.679 that can go into like animal feed, but a lot 0:18:36.720 --> 0:18:40.600 of it actually isn't specifically for human consumption. But isn't 0:18:40.600 --> 0:18:43.920 it not for human consumption because they're planting the crawl 0:18:44.000 --> 0:18:46.840 that is more valuable because of these systems to put 0:18:46.880 --> 0:18:48.879 it in a car like it could be anything that 0:18:49.000 --> 0:18:51.920 they's planted exactly. I think that's the argument comes in 0:18:51.920 --> 0:18:55.199 that by planting this field corn or corn that is 0:18:55.240 --> 0:18:57.760 strictly just made for making fuel, you're you're disposing line 0:18:57.800 --> 0:19:00.840 that could be used for the growing corn human consumption 0:19:01.160 --> 0:19:03.280 or other crops for food. So it's really I think 0:19:03.280 --> 0:19:06.919 on the land use competition that you really have to 0:19:07.080 --> 0:19:09.919 think about what's best for society. Is it to make 0:19:09.960 --> 0:19:12.240 it for fuel or is it to grow for food? 0:19:12.240 --> 0:19:15.600 And that's I think where the debate it's interesting. Well. Additionally, 0:19:15.640 --> 0:19:17.320 when you're bringing up the credits, I mean, one of 0:19:17.359 --> 0:19:21.600 my questions is are the I guess life cycle emissions 0:19:21.720 --> 0:19:25.080 actually brought into consideration in this sort of debate. I'm 0:19:25.080 --> 0:19:27.040 going to guess that the answer is no, and that 0:19:27.200 --> 0:19:28.800 I'm going to take us down a rabbit hole to 0:19:28.800 --> 0:19:30.800 which we have no answer. But what I mean by 0:19:30.840 --> 0:19:34.080 this is when we think about electric vehicles taken a look, 0:19:34.200 --> 0:19:37.600 depending upon where your battery is actually made, and if 0:19:37.640 --> 0:19:40.040 it's made on a dirty grid, in theory, you have 0:19:40.119 --> 0:19:42.159 quite a bit of carbon that you essentially need to 0:19:42.200 --> 0:19:45.240 pay off overtime by driving. You know, if you drive 0:19:45.240 --> 0:19:47.160 it a certain number of miles but you have zero 0:19:47.200 --> 0:19:50.119 tailpipe emissions, there comes a break even point, and that 0:19:50.200 --> 0:19:53.840 break even point always pays off within the lifetime of 0:19:53.920 --> 0:19:58.080 that car, so they are better from an emission standpoint. 0:19:58.119 --> 0:20:00.560 This is research we've done. We know that. And then 0:20:00.600 --> 0:20:03.440 on the other side, you think about agricultural emissions, things 0:20:03.480 --> 0:20:07.200 coming from fertilizer and agricultural practices in many different ways, 0:20:07.200 --> 0:20:09.240 and something that we at B and F are actually 0:20:09.280 --> 0:20:12.480 looking into even more with our newest research team, which 0:20:12.520 --> 0:20:15.680 is focused on agriculture and land use. Within these kind 0:20:15.720 --> 0:20:19.480 of two other parts of the biofuels and electric vehicle 0:20:19.520 --> 0:20:23.800 space and these other emissions. Are those being discussed more 0:20:24.200 --> 0:20:27.560 or is the focus really much further down the line 0:20:27.880 --> 0:20:30.919 when people like you and I are interacting with taking 0:20:30.920 --> 0:20:33.159 a flight or hopping in a car, I think the 0:20:33.160 --> 0:20:35.720 emissions and jade will be the expert on how they 0:20:35.760 --> 0:20:38.480 do biofuels, but they take into acout life cycle emissions 0:20:38.520 --> 0:20:40.120 and land uice and things like that to come out 0:20:40.119 --> 0:20:42.640 with a school which is basically like how many grounds 0:20:42.640 --> 0:20:45.080