WEBVTT - United Taps Green Jet Fuel as Net-Zero Plan Takes Off 0:00:00.760 --> 0:00:03.520 This is Dana Perkins and you're listening to Switched on 0:00:03.920 --> 0:00:07.120 the BNAF podcast, and on today's show, we have a 0:00:07.120 --> 0:00:09.720 special episode for you because we're going to bring you 0:00:09.840 --> 0:00:13.040 an interview from the BNAF Forum in Houston from the 0:00:13.080 --> 0:00:15.280 fifth of March. The theme of this event was the 0:00:15.320 --> 0:00:18.159 Barrel of Tomorrow, where the agenda highlighted the parts of 0:00:18.200 --> 0:00:22.360 the economy that are transforming in many respects, from hydrocarbons 0:00:22.520 --> 0:00:25.640 to electrons. One of the topics we touched upon was 0:00:25.680 --> 0:00:29.560 how aviation is changing. The aviation industry's pathway to net 0:00:29.680 --> 0:00:33.959 zero is far from certain. Operational improvements and technologies such 0:00:34.000 --> 0:00:38.160 as sustainable aviation fuels and zero mission aircraft could offer 0:00:38.440 --> 0:00:44.000 substantial emissions reductions, but questions revolve around timing, scalability, and 0:00:44.120 --> 0:00:47.880 customer willingness to pay. Airlines will play a pivotal role 0:00:48.000 --> 0:00:51.800 in implementing these solutions as the aviation industry looks to 0:00:51.840 --> 0:00:55.280 reach its decarbonization goals. So on stage we were joined 0:00:55.280 --> 0:00:59.280 by United Airlines Chief Sustainability Officer Lauren Riley and she 0:00:59.400 --> 0:01:03.080 was interviewed by Jade Patterson from bn EF's Renewable Fuels team. 0:01:03.280 --> 0:01:06.520 She shares United strategy and how their recent ad campaign 0:01:06.600 --> 0:01:09.240 with Oscar the Grouch plays into it. She also gets 0:01:09.240 --> 0:01:12.120 into the role of policy as well as venture capital 0:01:12.240 --> 0:01:15.800 in reducing aviation emissions. To find out where BNF's forums 0:01:15.800 --> 0:01:18.240 and summits are taking place around the world, you can 0:01:18.240 --> 0:01:21.280 find links in our show notes. Now to Jade's conversation 0:01:21.440 --> 0:01:24.679 on stage at the BNA Forum in Houston with United 0:01:24.680 --> 0:01:27.520 Airlines Chief Sustainability Officer Lauren Riley. 0:01:36.280 --> 0:01:38.039 Lauren, thank you so much for joining us. 0:01:38.760 --> 0:01:41.959 I was definitely talking to some people beforehand, a lot 0:01:42.000 --> 0:01:44.480 of United fans in the crowd, and I got to say, 0:01:44.520 --> 0:01:46.920 we're a little disappointed you didn't bring a chief trash 0:01:46.959 --> 0:01:49.800 officer Oscar, but you know, we're excited you're here, so, 0:01:51.120 --> 0:01:54.160 you know, just to kick things off. You know, United 0:01:54.200 --> 0:01:58.000 has been super involved in aviation decarbonization. You guys are 0:01:58.360 --> 0:02:00.840 very active in the soft space and and really pushing 0:02:01.080 --> 0:02:03.360 the envelope there. Can you just start off with a 0:02:03.400 --> 0:02:07.120 little bit of an overview of your roadmap to net 0:02:07.280 --> 0:02:08.639 zero and reducing your missions. 0:02:08.919 --> 0:02:11.720 Sure, and it's great to be here. Thank you to 0:02:11.760 --> 0:02:15.200 the Bloomberg team for having me. I think it's a 0:02:15.200 --> 0:02:17.560 little bit of a different discussion with me. This afternoon 0:02:17.560 --> 0:02:20.040 as a customer, because I'm hearing all about the supply 0:02:20.120 --> 0:02:22.120 and how we get to pay for it and who 0:02:22.160 --> 0:02:25.600 wants what. But there are absolutely constraints on the customer side, 0:02:25.600 --> 0:02:27.440 and I look forward to sort of exploring that today. 0:02:28.200 --> 0:02:32.799 So as a heartwobate industry, we're kind of in a pickle. 0:02:34.360 --> 0:02:37.000 We need to transition, but we don't have the marketplace 0:02:37.040 --> 0:02:40.040 and the solutions at scale to really make a difference yet. 0:02:40.760 --> 0:02:43.560 But yet we have these commitments to net zero by 0:02:43.600 --> 0:02:47.280 twenty fifty. United has a commitment to reduce our carbon 0:02:47.320 --> 0:02:52.120 intensity fifty percent by twenty thirty five compared to twenty nineteen. 0:02:52.200 --> 0:02:56.280 Sour most recent normal year of flying before the pandemic, 0:02:56.639 --> 0:02:59.480 that is SBTi certified, and we can talk about sort 0:02:59.480 --> 0:03:03.520 of the value of third party credibility and validation. But 0:03:03.600 --> 0:03:06.080 we need a plan to get there, and so we 0:03:06.240 --> 0:03:10.160 started publishing about two years ago our transition plan, our 0:03:10.240 --> 0:03:13.440 roadmap to net zero, and effectively you can think of 0:03:13.480 --> 0:03:17.400 it in sort of two categories. First and foremost is 0:03:17.440 --> 0:03:19.560 how do we simply just use less? So how do 0:03:19.639 --> 0:03:23.239 we burn less fuel? And we hear a lot about 0:03:23.360 --> 0:03:26.720 fuel in the context of aviation, because when you look 0:03:26.760 --> 0:03:31.280 at United's greenhouse gas inventory. Ninety eight percent of my 0:03:31.440 --> 0:03:35.600 inventory across the entire global operation is from jet fuel. 0:03:36.280 --> 0:03:39.080 So when you talk about climate leadership and transitioning to 0:03:39.120 --> 0:03:43.200 low carbon, you can't really have any integrity and sincerity 0:03:43.200 --> 0:03:46.160 in the discussion unless you're talking about replacing that jet fuel. 0:03:46.800 --> 0:03:50.120 So let's start by using less. And we're really trying 0:03:50.120 --> 0:03:52.360 to figure out how do we look at the value 0:03:52.400 --> 0:03:56.080 of fleet modernization. So United has invested in more than 0:03:56.160 --> 0:03:58.280 eight hundred new aircraft that are going to be coming 0:03:58.280 --> 0:04:01.680 online in the next decade. Each one of those aircraft 0:04:01.680 --> 0:04:05.280 that we introduce into our fleet twenty five percent more 0:04:05.360 --> 0:04:08.360 fuel efficient than the aircraft are replacing. So when you 0:04:08.440 --> 0:04:12.080 talk about a decarbonization plan, at least for this decade, 0:04:12.280 --> 0:04:15.160 fleet modernization is really crucial. I mean that is really 0:04:15.200 --> 0:04:19.760 actually a climate strategy. We also talk about next generation aircraft. 0:04:20.240 --> 0:04:22.720 How do you look at the new engine design? How 0:04:22.760 --> 0:04:25.000 do you look at new aircraft design? With some of 0:04:25.000 --> 0:04:28.000 the blended wing stuff you're seeing out there that super cool, 0:04:28.040 --> 0:04:31.159 but actually very very important when I'm looking at what 0:04:31.279 --> 0:04:34.640 happens when we hit twenty thirty, what kind of aircraft 0:04:34.640 --> 0:04:37.200 can we actually bring into our operation that can not 0:04:37.279 --> 0:04:39.919 just hit that twenty five percent reduction, but actually go further. 0:04:40.640 --> 0:04:44.160 And then of course there's operational efficiencies, so single engine taxing. 0:04:44.200 --> 0:04:46.360 You see those super tugs that pull the aircraft off 0:04:46.360 --> 0:04:48.880 the gate, those are important, they're electric, they're charged, they 0:04:49.080 --> 0:04:51.520 cause us not to have to burn fuel. Those all 0:04:51.560 --> 0:04:53.360 make a difference when you have the number of flights 0:04:53.360 --> 0:04:56.000 that we have in any given day. And then of 0:04:56.000 --> 0:05:00.720 course there's the alternative propulsion, so electric hydrogen that all 0:05:00.760 --> 0:05:04.800 of those are going to be i'll call them customer enhancement, 0:05:04.880 --> 0:05:06.680 So an opportunity for us to think a little bit 0:05:06.680 --> 0:05:09.280 differently about the services that we give to our customers, 0:05:09.480 --> 0:05:11.279 but we do it in a way that's low carbon 0:05:11.360 --> 0:05:13.320 and so that's a ton of fun and so that 0:05:13.440 --> 0:05:16.960 allows us to actually reduce the emissions from flight just 0:05:17.279 --> 0:05:20.440 use less. But then we get to saf and SAFF 0:05:20.480 --> 0:05:23.560 is the other fifty percent of our decarbonization plan. So 0:05:23.600 --> 0:05:26.240 when you think about twenty fifty, what is our portfolio 0:05:26.320 --> 0:05:28.000 going to look like? Well, I think you heard the 0:05:28.040 --> 0:05:31.440 panel before us and throughout the day that with alternative fuels, 0:05:31.440 --> 0:05:35.120 not every alternative fuels the same. There's many different technologies 0:05:35.160 --> 0:05:38.320 and conversion technologies out there. There's many different feedstocks out 0:05:38.360 --> 0:05:41.400 there and they all create alternative fuels in different ways, 0:05:42.160 --> 0:05:44.520 and so we took the time to actually break down 0:05:44.560 --> 0:05:46.000 for you and you can find it on United dot 0:05:46.080 --> 0:05:49.760 Com what we think will be sort of the contribution 0:05:50.160 --> 0:05:53.840 of these sort of generations of SAFF towards our net 0:05:53.920 --> 0:05:56.120 zero targets. So you hear a lot about half of 0:05:56.320 --> 0:06:00.679 that's renewable diesel converted to sustainable aviation fuel. Good stuff 0:06:00.960 --> 0:06:03.640 that's going to be important to us. We do have 0:06:03.680 --> 0:06:05.839 to solve for feedstock, So that was really interesting to 0:06:05.839 --> 0:06:07.719 hear Diarling and some of the other folks talking before me. 0:06:08.360 --> 0:06:10.159 But that's going to be about, you know, another twenty 0:06:10.240 --> 0:06:12.680 twenty five percent of our reduction. And then we talk 0:06:12.680 --> 0:06:16.080 about advanced biofuels. So think about ethanol. If you go 0:06:16.200 --> 0:06:18.280 fill up your tank and your car, you've got an 0:06:18.279 --> 0:06:20.200 ethanol blend and the gas that you put in there. 0:06:20.200 --> 0:06:23.240 Why are we not doing that for jets? Could we should? 0:06:23.279 --> 0:06:25.080 We've got a lot of ethanol in the United States. 0:06:25.520 --> 0:06:27.560 You talked about cover crops. I also heard that talked 0:06:27.560 --> 0:06:30.320 about this third season for farmers. That's also an opportunity 0:06:30.320 --> 0:06:33.240 for us to think about converting advanced biofuels into sustainable 0:06:33.279 --> 0:06:35.800 aviation fuel. And then there's the fuel of the future, 0:06:35.800 --> 0:06:38.680 which is power to liquid. So this is let's pull 0:06:38.760 --> 0:06:41.360 CO two out of the atmosphere, let's blend it with 0:06:41.400 --> 0:06:44.520 some a lot of renewable power right now and some 0:06:44.600 --> 0:06:47.720 green hydrogen, and poof, you've got a really beautiful sustainable 0:06:47.720 --> 0:06:51.240 aviation fuel. Doesn't work yet at scale, the economics are terrible. 0:06:51.400 --> 0:06:52.719 We're going to figure out a way to get there, 0:06:52.720 --> 0:06:55.599 but give me fifteen years. So there's different ways that 0:06:55.640 --> 0:06:58.359 we're actually going to realize our path to net zero, 0:06:58.800 --> 0:07:00.640 and we need all of them. We have asolutely need 0:07:00.680 --> 0:07:05.200 all of them. And frankly, as a customer that uses fuel, 0:07:05.640 --> 0:07:08.400 we can't do it alone. So having this conversation in 0:07:08.440 --> 0:07:11.280 a group like this around really truly what is the 0:07:11.280 --> 0:07:14.640 fuel of tomorrow? This is really important dialogue to have 0:07:14.720 --> 0:07:15.840 because we've got to do this together. 0:07:16.160 --> 0:07:18.360 Yeah, and I think, yeah, I really want to drill 0:07:18.400 --> 0:07:21.600 in on SAFF a little bit given the audience and 0:07:21.640 --> 0:07:24.200 what we've been talking about today, And I think it's 0:07:24.240 --> 0:07:26.800 probably safe to say that it's still early days for SAF, 0:07:27.360 --> 0:07:30.680 very low volume. So from an airline's perspective, what do you 0:07:30.760 --> 0:07:32.680 think is needed to see scale. 0:07:33.880 --> 0:07:37.600 So let me give you some context. Today United and 0:07:37.640 --> 0:07:41.560 I will caveat we have a massive growth plan. But 0:07:41.680 --> 0:07:45.880 today we use about four and a quarter billion gallons 0:07:45.920 --> 0:07:47.760 of fuel in a given year, So four and a 0:07:47.800 --> 0:07:50.440 billion gallons for one year for one operator. So keep 0:07:50.440 --> 0:07:53.200 that in mind. The equivalent of that in emissions forty 0:07:53.200 --> 0:07:55.840 two million metric tons of carbon emissions in the atmosphere. 0:07:56.600 --> 0:07:58.520 If we grow and I do not change the way 0:07:58.560 --> 0:08:00.840 I fly, I do not do the FLEA modernization, I 0:08:00.880 --> 0:08:03.520 do not in bed sustainably aviation fuels, I will more 0:08:03.560 --> 0:08:07.200 than double my emissions by twenty fifty. I should be 0:08:07.240 --> 0:08:09.160 going down to that zero, but I'm actually going to 0:08:09.160 --> 0:08:11.280 go up to more than ninety million metric tons. That's 0:08:12.000 --> 0:08:15.120 not okay, And so we do need to figure out 0:08:15.200 --> 0:08:18.920 a way to really draw that down, and that's really crucial. 0:08:19.760 --> 0:08:22.880 In twenty twenty, United used just a million gallons of 0:08:22.880 --> 0:08:26.560 sustainable aviation fuel just one last year we used seven 0:08:26.600 --> 0:08:29.440 million gallons. Doesn't sound like a ton, but it is 0:08:29.480 --> 0:08:32.840 a sevenfold increase. In the United States, twenty five million 0:08:32.880 --> 0:08:36.040 gallons of staff were available, so either produced here or imported, 0:08:36.640 --> 0:08:40.000 got roughly a third two quarter of that good but 0:08:40.080 --> 0:08:43.080 not great. But if you think about seven million gallons 0:08:43.120 --> 0:08:47.800 against a four and a quarter billion bogie, we really 0:08:47.880 --> 0:08:50.360 don't have a marketplace yet, and so this is all 0:08:50.400 --> 0:08:54.319 about how do you create a marketplace for these alternative fuels? 0:08:54.400 --> 0:08:57.840 How do you make it economically viable for an industry 0:08:57.920 --> 0:09:01.800 like ours to prefer to purchase that over a commodity 0:09:01.840 --> 0:09:04.520 product like Jeta. And that's what we're trying to solve for. 0:09:04.760 --> 0:09:06.719 And that's yeah, that's kind of a question that I 0:09:06.800 --> 0:09:09.640 think we get a lot these days is around kind 0:09:09.640 --> 0:09:12.000 of willingness to pay. So we'd love to hear your 0:09:12.040 --> 0:09:14.160 thoughts a little bit around you know, I think it's 0:09:14.160 --> 0:09:17.199 no secret STAFFA is more expensive than traditional jet fuel. 0:09:17.960 --> 0:09:19.400 Do you have an idea of kind of what's the 0:09:19.440 --> 0:09:23.480 demand elasticity when it comes to burning cleaner fuels? Like 0:09:23.720 --> 0:09:26.240 our customer is willing to pay for this? You know, 0:09:26.440 --> 0:09:27.600 who's going to put the bill here? 0:09:28.120 --> 0:09:30.960 Yeah? You know, it's actually been really interesting. We've had 0:09:31.480 --> 0:09:35.600 a long standing program at United it's called the Ecosky's Alliance, 0:09:35.600 --> 0:09:38.560 and we effectively partner with our corporate customers and that 0:09:38.600 --> 0:09:42.640 includes cargo, so you know, similar to maritime the ability 0:09:42.720 --> 0:09:47.360 to ship your your product low carbon is something that 0:09:47.400 --> 0:09:49.640 a lot of folks are very interested in supporting right now, 0:09:49.640 --> 0:09:53.000 and they can monetize that, which is really exciting. But 0:09:53.040 --> 0:09:55.320 we've been working with corporates for some time now to 0:09:55.360 --> 0:09:57.600 help pay that premium. And it's two to four times 0:09:57.679 --> 0:10:01.680 the cost of conventional jet fuel. An industry like aviation 0:10:01.920 --> 0:10:05.920 has maybe a four percent margin, so high revenue, low margin, 0:10:06.320 --> 0:10:11.040 we cannot carry that kind of exposure and stay competitive. 0:10:11.320 --> 0:10:15.079 It is a super sensitive industry. When it comes to pricing. 0:10:15.120 --> 0:10:16.560 You all go buy your ticket, You look for the 0:10:16.559 --> 0:10:18.240 lowest one, see if it works, and you buy it. 0:10:18.640 --> 0:10:21.200 And so when you introduce some of these two to 0:10:21.240 --> 0:10:25.199 four times costs for a commodity product, you suddenly create 0:10:25.280 --> 0:10:27.880 uncertainty and it could really impact your revenue and create 0:10:27.920 --> 0:10:31.640 these competitive distortions. We can't have that. So we've been 0:10:31.679 --> 0:10:35.960 working with some of these climate leading corporations to really 0:10:35.960 --> 0:10:38.960 help us finance that transition. And there's a great willingness 0:10:38.960 --> 0:10:40.640 to do it. I mean, I give them a tremendous 0:10:40.679 --> 0:10:43.199 amount of credit. They've been out there working with us 0:10:43.240 --> 0:10:45.560 to really put their money where their mouths are, and 0:10:45.600 --> 0:10:47.600 they want to reduce their scope through emissions and their 0:10:47.640 --> 0:10:50.720 greenhouse gas inventories, and they want to do and feel 0:10:50.800 --> 0:10:53.600 proud and confident around the solutions they're backing, and so 0:10:53.600 --> 0:10:57.040 they're willing to put dollars into things like sustainable aviation fuels. 0:10:57.440 --> 0:10:59.160 The challenge for them right now is that it's a 0:10:59.160 --> 0:11:01.120 bit of a fragment to market and they're kind of 0:11:01.480 --> 0:11:04.000 trying to figure out how they can streamline those things. 0:11:04.040 --> 0:11:07.320 But the willingness is there. The other example I'll give 0:11:07.360 --> 0:11:10.760 you is that just last year, United introduced for our 0:11:10.840 --> 0:11:15.240 leisure travelers, so takeout corporates, average traveler, you're going on vacation, 0:11:15.400 --> 0:11:17.920 when you go through the booking path, you have the 0:11:18.000 --> 0:11:22.640 ability now to contribute to sustainable aviation fuels that United 0:11:22.720 --> 0:11:27.120 invests in. I was super dubious because you know, carbon offsets. 0:11:27.400 --> 0:11:29.920 We had a program for a while, it didn't really work. 0:11:29.960 --> 0:11:32.040 Nobody really cared, and I get it because there's a 0:11:32.040 --> 0:11:34.480 lot of skepticism out there. But then we introduced this 0:11:34.600 --> 0:11:39.679 capacity around investing in staff supporting insect or reduction. We 0:11:39.760 --> 0:11:43.280 had a whole host of communication activity with Oscar the Grouch, 0:11:43.600 --> 0:11:47.280 our chief trash officer, explaining what is going on, why 0:11:47.280 --> 0:11:50.000 are we talking about staff. Why is it important? And 0:11:50.120 --> 0:11:52.640 I'll tell you. So, we've had this opportunity now for 0:11:52.720 --> 0:11:56.479 customers about twelve months, one hundred and fifty thousand customers 0:11:56.679 --> 0:11:59.760 and about a half million dollars. Doesn't sound like a 0:11:59.800 --> 0:12:02.440 live It's not really about the numbers themselves. It's about 0:12:02.440 --> 0:12:04.840 the engagement of customers and trying to educate them about 0:12:04.840 --> 0:12:08.040 the right solutions. It's working, and so I don't know 0:12:08.040 --> 0:12:10.400 if that converts long term into sort of tacking stuff 0:12:10.400 --> 0:12:14.400 onto tickets. I assure you my CFO wants nothing to 0:12:14.440 --> 0:12:17.920 do with that, but it does show there's a more 0:12:18.200 --> 0:12:22.400 there's a greater sophistication and appreciation for doing the right thing, 0:12:22.920 --> 0:12:25.920 in particular for these hard to abate industries like aviation. 0:12:26.000 --> 0:12:26.959 And that's really exciting. 0:12:27.160 --> 0:12:27.920 That's super cool. 0:12:27.960 --> 0:12:30.480 And I'm kind of curious your thoughts on that. Sounds 0:12:30.520 --> 0:12:34.000 like the carbon Offsets program maybe wasn't as successful. But 0:12:34.040 --> 0:12:36.800 why do you think customers are more willing to opt 0:12:36.840 --> 0:12:40.080 into this sustainbleviation fund or feels fund? 0:12:40.120 --> 0:12:40.280 Then? 0:12:40.360 --> 0:12:43.440 Yeah, so United launched a sustainable flight fund last year. 0:12:43.480 --> 0:12:45.200 And let me just explain that for a minute, because 0:12:45.200 --> 0:12:47.120 this is a bit of an un orthodox role that 0:12:47.200 --> 0:12:50.320 United has played in financing our transition. We stood up 0:12:50.320 --> 0:12:53.320 a venture fund maybe two three years ago, but last 0:12:53.440 --> 0:12:57.440 year we kind of did a focus in unsustainable aviation fields. 0:12:57.440 --> 0:12:59.800 We were seeing that nobody, nobody was really put money 0:12:59.800 --> 0:13:03.560 into and it was frustrating, so we went out and 0:13:03.600 --> 0:13:06.880 created a fund and opened it up to other investors. 0:13:07.440 --> 0:13:11.280 Today we have about twenty two investors, including United in 0:13:11.360 --> 0:13:14.560 this fund. It's two hundred and thirty million dollars and 0:13:14.600 --> 0:13:17.439 the fund reason just closed about two weeks ago. I 0:13:17.480 --> 0:13:21.520 think what's interesting about that is on the twenty two investors, 0:13:21.679 --> 0:13:24.600 we have the whole value chain, so it's anything from 0:13:24.960 --> 0:13:28.320 Ge and Boeing and Saffran all the way to on 0:13:28.360 --> 0:13:31.720 the other hand, corporates like BCG, Bank of America, Google 0:13:32.360 --> 0:13:36.760 and are Peers. We have four airlines that basically raise 0:13:36.800 --> 0:13:38.200 their hands and we want to be a part of 0:13:38.200 --> 0:13:40.920 the United train and really figure out how to do 0:13:40.960 --> 0:13:43.800 this right. So we have Air Canada, Air New Zealand, 0:13:43.880 --> 0:13:50.000 Jet Blue and Hawaiian and we're working together to identify 0:13:50.240 --> 0:13:53.080 what we believe are the technologies that are not only 0:13:53.200 --> 0:13:56.880 novel and interesting in decarbonization, but as an operator, we 0:13:56.920 --> 0:13:59.760 can uniquely look at and say can this scale, can 0:14:00.080 --> 0:14:03.079 bed this and how we actually run the airline? And 0:14:03.559 --> 0:14:05.240 if the answer is yes, we go ahead and invest 0:14:05.280 --> 0:14:08.480 in it. And so that's been a really amazing opportunity. 0:14:08.520 --> 0:14:11.640 You heard earlier today from Moji, who's the CEO of 0:14:11.679 --> 0:14:15.080 some Vita that's one of our investment companies. They essentially 0:14:15.160 --> 0:14:19.680 take a microbe and synthetically bioengineer it and crack it 0:14:19.720 --> 0:14:22.680 open with some crisper. I don't know. It's fascinating, but 0:14:22.720 --> 0:14:26.960 it's a feedstock play that allows us to actually address 0:14:26.960 --> 0:14:31.080 a constraint in the market today. High integrity feedstock, low 0:14:31.160 --> 0:14:35.040 CI everyone benefits, no land use issues. And so these 0:14:35.160 --> 0:14:38.280 kinds of innovations are coming forward now, thanks in great 0:14:38.280 --> 0:14:42.040 part to the Inflation Reduction Act, and it's really exciting. 0:14:42.160 --> 0:14:45.800 And so we've really stepped in not just purchasing the fuel, 0:14:45.880 --> 0:14:48.920 but working upstream to help finance some of these companies 0:14:48.960 --> 0:14:52.680 that are innovating around producing the fuel or a component 0:14:52.720 --> 0:14:53.200 of the fuel. 0:14:53.440 --> 0:14:54.360 Yeah, that's super cool. 0:14:54.360 --> 0:14:56.800 I mean it's also great to hear that other airlines 0:14:56.800 --> 0:14:59.040 are joining you. I think that's a testament to know 0:14:59.080 --> 0:15:01.360 the direction you guys are had, and that's that's really awesome. 0:15:02.200 --> 0:15:02.720 Do you mind. 0:15:02.840 --> 0:15:04.480 You kind of touched on it a little bit on 0:15:04.600 --> 0:15:07.000 kind of some of the barriers are trying to overcome, 0:15:07.040 --> 0:15:08.960 but really, can you explain a little bit more of 0:15:09.000 --> 0:15:10.840 what's the objective of this fund, what you guys are 0:15:10.840 --> 0:15:14.120 trying to achieve, and maybe are there any companies you're 0:15:14.120 --> 0:15:14.960 super excited about. 0:15:15.320 --> 0:15:18.320 Oh, there's tons of companies I'm super excited about. So 0:15:18.520 --> 0:15:21.320 I think there's maybe eight or ten investments currently in 0:15:21.360 --> 0:15:24.160 the fund. Some of them are what I talked about before, 0:15:24.200 --> 0:15:27.040 the power to liquid, so capturing CO two and converting 0:15:27.080 --> 0:15:29.560 it into a jet fuel of the future. Some of 0:15:29.600 --> 0:15:32.880 them are like Sivita, where they're really focused on that 0:15:32.960 --> 0:15:36.320 feedstock and creating a high integrity lipid. Just the other week, 0:15:36.360 --> 0:15:40.440 I tried butter created from one of these you know, 0:15:41.160 --> 0:15:46.680 created genetically created lipids. That was so fascinating. But you know, 0:15:46.720 --> 0:15:49.920 Butter's a lipid lipids we need for fuels. It's complementary 0:15:50.000 --> 0:15:52.600 upstream product. You know, how do we look at the 0:15:52.680 --> 0:15:57.320 ecosystem to enable the transition for sustainable aviation fuels? And 0:15:57.400 --> 0:16:00.240 so what's been interesting about it and hearing the dialogue today, 0:16:00.280 --> 0:16:03.440 you know, for us to succeed in aviation we're sort 0:16:03.480 --> 0:16:07.320 of this niche, smaller market, lots of planes, but not 0:16:07.440 --> 0:16:10.200 a super big industry. But for us to succeed, we 0:16:10.240 --> 0:16:13.080 need abundant renewable power that's cost effective. We need green 0:16:13.200 --> 0:16:17.880 hydrogen everywhere, we need some of these technologies like electrolyizers 0:16:17.880 --> 0:16:20.360 to really really work, and not like these little intibity ones, 0:16:20.360 --> 0:16:24.000 but like big and so we're thinking about how do 0:16:24.040 --> 0:16:27.720 we put all those component parts together to eventually allow 0:16:27.880 --> 0:16:30.520 us to be successful downstream when the market's mature to 0:16:30.520 --> 0:16:33.360 go to aviation. And so it's really again going back 0:16:33.400 --> 0:16:36.200 to this whole theme of ecosystem, how do we work 0:16:36.240 --> 0:16:40.600 the ecosystem to allow us to do decarbonize aviation once 0:16:40.640 --> 0:16:44.920 we get the right formula to incentivize investment in our space. 0:16:45.560 --> 0:16:48.440 Yeah, I'm really glad you've brought in the investment piece 0:16:48.480 --> 0:16:50.840 of it, because I think you guys have been really 0:16:50.840 --> 0:16:53.720 crucial to kind of coming up with more creative ways 0:16:53.920 --> 0:16:57.680 around investing in newer technologies. So, I mean, from your 0:16:57.680 --> 0:17:00.880 point of view, like, how do we need to change 0:17:00.880 --> 0:17:03.000 our way of thinking around investing in these projects in 0:17:03.080 --> 0:17:05.800 order to I guess see this industry scale. Do you 0:17:05.840 --> 0:17:08.200 think we need to kind of readdress the model here 0:17:08.359 --> 0:17:09.840 or what needs to change. 0:17:09.880 --> 0:17:13.720 I mean, if you can answer that question, please, that's 0:17:13.800 --> 0:17:16.320 the question. So what we're seeing right now and this 0:17:16.400 --> 0:17:19.320 is these are just my observations. There's a lot of 0:17:19.359 --> 0:17:22.199 interest in new climate tech. There's so much going on 0:17:22.400 --> 0:17:26.679 in sort of finding different ways to solution for industries 0:17:26.720 --> 0:17:29.119 like ours and all the other industries that need to transition, 0:17:29.480 --> 0:17:33.440 super interesting, lots of venture capital out there. Money is flowing, 0:17:33.720 --> 0:17:37.160 But what is not happening is going from that demonstration 0:17:37.320 --> 0:17:39.600 in the lab let me show you a cool project 0:17:39.960 --> 0:17:42.679 to the ten million gallon plant that I need to 0:17:42.760 --> 0:17:45.399 actually prove to Wall Street that they should put their 0:17:45.440 --> 0:17:48.040 billions in to make me the foreign quarter billion that 0:17:48.080 --> 0:17:50.240 I need a fuel. So there's kind of like this 0:17:50.400 --> 0:17:53.640 stalling that's happening in the sort of the moving from 0:17:53.680 --> 0:17:57.960 pilot to demonstration. And I get it because it's super expensive. 0:17:58.000 --> 0:18:01.200 I mean, that ten million gallon plant isn't cheap anywhere 0:18:01.200 --> 0:18:03.560 from five hundred million to a billion dollars. You don't 0:18:03.560 --> 0:18:05.399 want to put that kind of capital for that little 0:18:05.480 --> 0:18:07.600 product that comes out, and by the way, it's competing 0:18:07.640 --> 0:18:11.360 with the commodity product. So that to me really fundamentally 0:18:11.400 --> 0:18:15.159 goes back to policy I mentioned before. The Inflation Reduction 0:18:15.240 --> 0:18:20.480 Act really changed the whole paradigm around innovation. It's really 0:18:20.520 --> 0:18:25.119 not though, addressing sort of driving capital for long term 0:18:25.400 --> 0:18:29.880 sustainable shifts in aviation, unlike some of these other credits. 0:18:29.920 --> 0:18:33.240 You know, we talked about hydrogen sustainable aviation fuel had 0:18:33.240 --> 0:18:36.600 a tax credit for two years, not ten, And now 0:18:36.640 --> 0:18:39.200 we move to this next clean fuels production credit for 0:18:39.320 --> 0:18:42.040 I think it's three years, not ten. And so in 0:18:42.160 --> 0:18:46.560 terms of creating curiosity around aviation, it's there. But in 0:18:46.680 --> 0:18:50.520 terms of de risking and making our industry more bankable 0:18:50.600 --> 0:18:55.280 and making the financial institutions come to the table and say, yeah, 0:18:55.680 --> 0:18:58.560 I have confidence and I feel like I can really 0:18:58.560 --> 0:19:01.640 make a return in this mark it, it's not there. 0:19:02.119 --> 0:19:04.560 And so that's really fundamentally what I spend my day 0:19:04.600 --> 0:19:08.359 solving for is talking to policymakers, talking to banks, talking 0:19:08.400 --> 0:19:10.520 to investors, and saying, how do we put this puzzle 0:19:10.560 --> 0:19:13.040 together in a way that it allows us to all succeed. 0:19:13.520 --> 0:19:15.840 Yeah, that's super helpful, And I'm glad you mentioned the 0:19:16.160 --> 0:19:19.120 IRA and the policy piece there, And I think it's 0:19:19.160 --> 0:19:21.040 a lot of times we kind of compare and contrast 0:19:21.080 --> 0:19:23.720 the EU to the US on you know, they're going 0:19:23.760 --> 0:19:26.360 more demand side, and I'm curious, from the airline's point 0:19:26.400 --> 0:19:29.440 of view, what do you think is the best model 0:19:29.840 --> 0:19:33.880 in terms of growing and incentivizing demand and kind of 0:19:33.960 --> 0:19:36.640 creating that certainty for the market. Is it more kind 0:19:36.640 --> 0:19:38.919 of the production tax credit type model or is it 0:19:39.119 --> 0:19:42.119 having more mandates to really ensure airlines buy that. 0:19:42.760 --> 0:19:42.960 Yeah. 0:19:42.960 --> 0:19:49.119 I texted my friends in Europe and they have IRA envy, 0:19:48.680 --> 0:19:52.199 which is kind of fun. But they're also buying up 0:19:52.200 --> 0:19:54.600 all the SAFF. So in terms of who's getting the 0:19:54.640 --> 0:19:57.879 SAFF now, it's the people with the mandate. So that's 0:19:57.920 --> 0:20:02.600 a conundrum that we've got to figure out. My point 0:20:02.640 --> 0:20:05.960 of view is market based incentives do work right now. 0:20:06.040 --> 0:20:08.760 We need a space to allow the smart people to 0:20:08.800 --> 0:20:11.600 innovate because we didn't have the solutions before, or at 0:20:11.680 --> 0:20:14.720 least the diversity of solutions that are really going to 0:20:14.720 --> 0:20:17.879 make a difference for aviation, and that's happening now. I 0:20:17.960 --> 0:20:21.359 do think we can sort of shift the policy suite 0:20:21.800 --> 0:20:25.840 to allow that durability, that long term confidence that's missing 0:20:25.920 --> 0:20:30.159 for real capital and I'm talking like project finance type stuff, 0:20:30.200 --> 0:20:34.760 infra stuff to come to sustainable aviation fuels. But while 0:20:34.760 --> 0:20:37.840 we're waiting for that to happen, all of these component parts, 0:20:37.920 --> 0:20:40.359 the hydrogen, the greening of the grid, and all these 0:20:40.440 --> 0:20:44.440 transition component that is happening, and so we are dependent 0:20:44.480 --> 0:20:46.520 on all of that, as I mentioned before, and so 0:20:46.800 --> 0:20:49.440 until that happens, there's not really a play for sustainable 0:20:49.440 --> 0:20:52.600 aviation fuels quite yet. What I like to see and 0:20:52.640 --> 0:20:56.240 where United sits in terms of policy advocacy is that 0:20:56.280 --> 0:20:59.560 we are performance based in our advocacy, meaning if you 0:20:59.600 --> 0:21:04.399 can allow the policy incentives to encourage greater reductions over time, 0:21:05.000 --> 0:21:09.800 so the lower CI, the lower the reduction, the better 0:21:10.080 --> 0:21:13.560 the incentive you get. Then you allow the market to 0:21:13.600 --> 0:21:17.280