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If you’ve flown on American Airlines recently, there’s a chance your plane was fueled by a small amount of sustainable aviation fuel (SAF). Jill Blickstein, Vice President of Sustainability at American Airlines, joins the show (18:27) to talk about the latest advancements in SAF, fleet upgrades the airline has made to enhance its sustainablility and an AI-enabled system called ‘Smart Gating’ that conserves fuel and saves time for travelers. American Airlines is undertaking numerous initiatives to reduce its carbon footprint. As Jill explains, many of those efforts come in places passengers might not notice, but certainly lead to more sustainable air travel.
Highlights from Jill Blickstein
Update on sustainable aviation fuel (SAF) – (20:10)
American Airlines’ goals for SAF usage – (23:56)
Using SAF to attract business travelers – (26:36)
Creating a SAF certificate for all travelers – (30:22)
The potential for zero-emission hydrogen-electric aircraft – (30:47)
Partnering with the Bill Gates-backed Breakthrough Energy Catalyst – (33:24)
Other sustainability initiatives at American Airlines – (35:10)
‘Smart Gating’ – (39:47)
Powering operations with renewable energy – (42:20)
Validation from the Science-Based Targets initiative – (43:02)
Other Show Segments
Sustainable or Suspicious – (1:54)
Top Headlines from SmartBrief on Sustainability – (6:53)
Sustainable precast concrete products made with locally sourced recycled materials
Comcast boosts its energy efficiency
Electrifying roads to cure electric vehicle ‘range anxiety’
Here and There – (13:04)
3 ways to make data centers more sustainable
Sign up for the SmartBrief on Sustainability newsletter
(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)
Sean McMahon 00:09
Hello, everyone and thank you for joining us for another episode of the sustainability smart pod. I’m your host Sean McMahon, and today I’m joined by Evan Milberg and Jaan vanValkenburg. One of our normal partners in crime, Karen Kantor… well, she’s on vacation this week. So the three of us are going to have to fill in for her.
Jaan van Valkenburgh 00:26
Actually, Karen and I had dinner on Sunday night here in New York. She came in, and we had a great time at a vegetarian restaurant. I didn’t realize she was vegan, like myself. And so we had a great time.
Sean McMahon 00:39
Oh, that’s great. You’ve been on vacation. She’s hanging out with you. That’s what I call team building. We’d like to submit the check for that to management.
Jaan van Valkenburgh 00:46
I’ll send it soon.
Evan Milberg 00:48
I would have joined you guys if I wasn’t 200 miles away.
Sean McMahon 00:51
Right? Yeah, geez, I guess my invite got lost in the mail. I mean, I only would have had to travel something like 3000 miles to join you for dinner. But if I had made that journey, chances are it would have flown. And that segues perfectly to our guest today. Coming up in a few minutes, we’ll be joined by Jill Blickstein, the Vice President of Sustainability at American Airlines. Air travel is a hard to abate industry, and American Airlines is one of the biggest carriers. So Jill has all kinds of sustainability challenges coming her way on a daily basis. We’re gonna hear from her about advancements in sustainable aviation fuel, fleet upgrades that include newer lighter braking systems. And my favorite, an AI enabled system called Smart Gating that conserves fuel and saves time for travelers like you and me. American is undertaking numerous initiatives to reduce its carbon footprint. But the biggest takeaway I have from talking with Jill is how many of those efforts come in areas that most travelers never notice. I learned a lot from talking to Jill, and I think you will, too.
But for now, let’s kick things off with the first regular segment of the show. It’s something we call sustainable or suspicious. Evan, I think you’ve got today’s topic for us. So what do you got?
Evan Milberg 02:12
I do. So today’s topic is E liability. We have this great article from the Harvard Business Review called getting a clearer view of your company’s carbon footprint. And I think the story does just that I think what I really liked about the story is that it’s not just some cut and paste advice. It has a real case study from a company called gitI tire, which came across a real problem companies face when trying to improve sustainability, determining how to procure and use emissions data and a pilot study. And verifying the accuracy of that data, I think was crucial to that company’s development of an E liability method, which in turn inform strategies to reduce emissions.
Sean McMahon 02:54
All right, well, we’ll slow down just one second here. What is e liability?
Evan Milberg 02:58
So the liability Institute defines e liability as an accounting algorithm that essentially allows organizations of all different tiers to produce real time accurate and auditable data on both their total direct and supplier emissions. That’s referred to as cradle to gate.
Sean McMahon 03:19
I gotcha. So companies are trying to assess their own so that they can then you know, tout that to customers or competitors,
Evan Milberg 03:25
essentially, that’s my understanding of,
Sean McMahon 03:27
I can see how this is gonna be really important. And I think we’ve talked on previous episodes about, you know, the SEC, and disclosure rules that are coming out. And so where companies can acquire or you know, find reliable data is going to be massively important. It’s gonna be a huge market, actually, for any of those data firms out there. So I can see why this be very important. Yan, what do you think?
Jaan van Valkenburgh 03:49
I think this is much better than what most of them are doing, which is the GH gap, which does a lot of double counting. Because basically, you’re trying to get it from creation, instead of basically an arm’s length away. It reminds me of value added tax, when you’re looking at different countries, say you, you know, source one material and one country or you, you mine it in one place, and you do it another place, you distribute, and you’re putting different costs and you’re having to pay tax in each place. Same with transfer pricing for multinationals that have multiple locations and are doing part of that job for that product in each different little place. It’s the same concept. And it really works. I’m sure someone will eventually find a way to to cheat at it. But I think this lays a really great foundation on it. And it seems like it has legs. They’re doing a lot of articles on it. And one of the authors of it, one of the creators of it has created a Institute at the University of Oxford to I don’t know what the resources are for that but they’re pushing it I think because it makes a lot of sense. And the same people who know how to do transfer pricing VAT to do all those calculations will be really excellent aides to doing this
Sean McMahon 05:10
just more work for the lawyers and the accountants, right.
Jaan van Valkenburgh 05:14
And I think eventually, you could end up paying for your carbon this way, just like you pay your transfer, pricing and VAT.
Sean McMahon 05:24
Wow, that’d be quite an advancement. So it’s funny, you know, later in the show, we’re gonna be hearing from Jill Blickstein from American Airlines. And we talked about that a little bit in our conversation in terms of how companies are trying to keep track of their own carbon footprint, and were to, for lack of a better word attack the most carbon intensive parts of either their supply chain, or they’re just overall operations. So you know, a tool like this or an approach like this is definitely something that seems to dovetail well, with, we’ll be hearing from Jill. So when it comes to our big test of whether something is sustainable, or suspicious, what do you guys think of this one? Thumbs up,
Evan Milberg 05:57
it’s a thumbs sideways for me. And the reason it’s a thumbs sideways for me is it has all of the makings of an actionable case study. But until we actually see it in the field, and other companies following suit, I’m hesitant to say that it’s all the way sustainable. Wow,
Sean McMahon 06:18
you would have been you have been rough in the old Roman Colosseum days. I don’t know what happens when the Emperor goes sideways. I don’t know what they did back then. I’m gonna say it’s, it’s sustainable. I think that, like you said, it’ll take a while to be adopted widely. But what I sense from the marketplace is that companies like to have a few different options at this point of what tactics or what tools they should deploy. And if this one becomes, you know, the preferred, yet still reliable and credible. I think it gets us there. All right. So now we’re gonna move on in the next segment of this show, Karen usually steps in and recounts all the top headlines from the smartbrief on sustainability newsletter, but she’s on vacation, and somewhere in the Big Apple having fun, apparently, on, Evan, you’re gonna step in and do some double duty for us today. So what kind of headlines we got?
Evan Milberg 07:09
Yeah, so the first story I want to highlight is from an outlet called Israel 21 C. Now, if you’re not familiar, Israel, 21 C, covers the way people in that country are innovating at the intersection of science, business and technology. So it highlights one company called criteria innovations, which is doing that by developing sustainable precast products made with locally sourced recycled materials. Just a little side note, locally sourced is the big buzz phrase in concrete right now. So that material has potential for using all sorts of things like wall tiles, cladding, an even some select Load bearing elements and vertical construction in home building. So as our lead editor for the American Concrete Institute’s for newsletters soon to be five with us, I’ve seen a lot of innovative ideas coming out of Israel in recent years. And this is just the latest one. So
Jaan van Valkenburgh 08:03
this makes me think of a story we ran in civil engineering. About a month ago, a Dutch company called New Horizon urban mining cells building materials gathered from its demolition products.
Evan Milberg 08:16
Yes, c&d Waste is going to be, I think, a really big trend in the construction industry in the next decade or so.
Jaan van Valkenburgh 08:23
I think about a quarter of the US waste is considered construction waste, so
Sean McMahon 08:29
well, that sounds great. I mean, what’s the next door you got for us?
Evan Milberg 08:32
Yeah, so one of smartbrief sister brands next TV recently reported that Comcast claims its broadband network is 36% more energy efficient than it was just four years ago. Comcast says it consumed 21.2 kilowatt hours of electrical power to deliver a terabyte of data in 2019. But reduce that to just 13.6 kilowatt hours per terabyte and 2022. And this is really interesting considering the various studies on consumer trends that show folks are really aligning themselves with more sustainable brands. I think if this data is packaged, well, Comcast could maybe steal some market share from mainstream competitors and streamers?
Jaan van Valkenburgh 09:15
Well, it’s already being packaged in a way that it’s on the product instead of the company like most of their competitors do. So I think that is the purpose of these stories. It might have some influence, perhaps not switching people but gaining I think new customers from very young first time customers, because changing your internet provider is is actually kind of stressful. I don’t think most people would want to do it.
Evan Milberg 09:46
Not very energy efficient either. I might add it
Sean McMahon 09:49
as if they want to make it hard to change. I just kidding. I don’t wanna get
Evan Milberg 09:55
Sean McMahon 09:57
All right. Well, that sounds great because anything a company decides As Comcast can do to improve their sustainability, that’s gonna have a huge impact on pretty much everywhere these days. And and what’s the what’s the next story you got for us? All right, so
Evan Milberg 10:09
if you’re a listener of this show, you’re likely well aware of the so called range anxiety associated with electric vehicles. So our friends at the construction index recently shared a study out of Sweden, that suggests a straightforward solution with a not so straightforward path to implementation, in my opinion, and that’s electrifying roads. The researchers are claiming that electrifying roads will allow automakers to drastically reduce the size of EV batteries. Something our friend Frank Menchaca, was talking about a lot a couple of weeks ago. And that’s a big deal, given the tenuous nature of the material supply chain and China’s subsequent chokehold on it.
Sean McMahon 10:51
So when we’re talking about electrifying roads, what are we talking about here?
Evan Milberg 10:55
I’ve seen some some research out of Purdue on this topic. And my impression here is you’re essentially putting conduction technology inside the concrete or the asphalt in a way that where you just drive over the road, it can charge the Eevee in real time.
Sean McMahon 11:17
Okay, I gotcha. Yeah, I think I’ve heard stories about this in the past as well. Yeah, it’s
Evan Milberg 11:21
not it’s not exactly a new technology. But I think what’s novel about the study here is the connection to range anxiety. And essentially how you solve that.
Sean McMahon 11:32
Yeah, I’m gonna jump in and just be a pretty skeptical on this little technology, I gotta say, Sure. Is it possible? Yeah. But I’m just not really seeing a place where all the other part of the payment of all the other moving parts have to fall into place for that conduction to work. All right. The vehicles themselves gotta be able to onboard that. And that’s just a whole nother thing. I think there are other ways that range anxiety can be addressed, or there’s more charging stations, swappable batteries, quite frankly, swappable cars, that stuff just seems more likely, in my mind, and then some of this cool cutting edge road stuff, because then I think we’d also run into other issues with, you know, maintaining these roads, right. road maintenance around the world is a huge thing. How are you gonna take care of this huge motorway that has this technology embedded in it? I don’t know.
Evan Milberg 12:21
Well, and I think that’s the criticism of a study like this is what’s your timeline for implementation? Because this sounds like something that could be mainstream by, say, 2050. But we’re dealing with drastically oversized EV batteries now. So what what is your solution right now. And every day, I feel like we’re seeing a lot of stories lately about evey charging stations breaking down very easily, and customers being really frustrated with it. And I think improving those charging stations first, maybe with some of that bipartisan infrastructure, a lot of money would go a long way.
Sean McMahon 12:59
Okay, well, thanks, Evan, I think you did a great job pinch hitting for Karen there. And now it’s on to the next segment of our show, here and there. Yan usually kind of takes us somewhere around the world or in some technology that is being used to enhance sustainability. So what do you got for us this week, John?
Jaan van Valkenburgh 13:22
Well, this week, we’re going to Western Europe, to look at data centers. So there are three ways to make data centers more sustainable. One is to power them with renewable energy, you should put solar panels on the rooftop, we’ve seen that. Second is to better manage the cloud data. When workloads are high, you consolidate jobs to a few servers, that can save as much as 30% of energy. But it’s not for great for performance. You can also throw out some data. Shawn, you and I were talking a little bit about that earlier.
Sean McMahon 14:00
Yeah, there’s a really funny story I saw in tech radar, according to the experts, 41% of data that’s saved in data centers is not needed. Like companies hang on to this data, and they never go back and access it. And that really hit home for me, because I know that study was about on the corporate side. But I think every single one of us, like every single person listening to this podcast, just looks himself in the mirror and says, How much data do I have saved somewhere that I’m never, ever going to access?
Jaan van Valkenburgh 14:31
Yeah, that kind of hits home.
Sean McMahon 14:33
I tabulate all my emails. I’m bumping my head on 200,000 emails in my inbox, and I think about almost 150,000 Those I’ve never read. I’m just too lazy to go through and delete them all. And then don’t get me started on like, that’s on the worksite right, but don’t get me started on like my personal stuff like photos and things like that. I have a Google Drive that I’ve been paying for for, I don’t know, 10 years, something like that. And all the vacations I’ve gone on all the family gatherings I’ve ever Add. I mean, gosh, I’d like to tell you that I go back and just scroll through all those photos and videos of when the kids were little and things like that. But man, I very rarely do that. And if I do, it’s because Google like, throws it at me and says, Oh, 10 years ago, you were doing this, and I see it. So I’m just as guilty of hogging all the space on these data centers, that’s never going to be used. And so stories about this, but how to make them more sustainable or more energy efficient? Yes, there’s things they can do on the technology front. But it’s also the users have a little bit of responsibility to bear here.
Jaan van Valkenburgh 15:34
Yeah, that 41% really hit me as well. And you’re right. But I will say that that figure, they were asking the center people, the data center people, they weren’t talking to the owners of the data necessarily, or the data analysts, and you don’t know where the correlations between different data points are going to be found. So yes, a lot of data is out there. And it’s not being used. But we don’t want to get rid of it. Because we’re scared, we might need it. And the fact is, we need to start finding some creative solutions. So I have questions about that. 41% I gotcha. I think it depends on who you ask. And by the way, all of my photos are incredibly valuable.
Sean McMahon 16:17
All right. But getting back to what’s going on in Western Europe, how are some places tackling this problem?
Jaan van Valkenburgh 16:22
Okay, so you power it differently, you manage it differently, or you locate it differently. And that’s what’s happening in Western Europe. So the goal of finding a different location for the cloud is to reduce the heat signature, or to recycle the facility heat. And basically, recycling is really where it’s at in Western Europe. In Stockholm, the city plans to heat in about 12 years from now. 10th of its homes within the data center. Kete. The organization is called Stockholm data parks. It’s private data centers that have partnered with the city with the energy company and with the local grid operator. You’ve got something similar happening in Paris, where a Parisian climate change Arboretum is being heated by a major data center. In Norway, they have 175 acre office slash business park called lease Parkin, where they’re building it with infrastructure underground, that will allow tenants to buy shared energy from data centers. And in England, which has very cold winters, as I remember. So the public pools there have to be heated, because you’re in England, you just do a little chilly little too chilly or not. Yeah, yeah. When I first read this article, I was like, Why do they have to? Why would you need a oh, wait a second. England? Yeah, it needs to be heated. Yeah, I would never go into a no, absolutely not. So the public cools, we’re going to have to close because of heating costs. And what they found was that they could solve this problem by putting the data centers under the public pools. Everybody wins. Similar thing is happening in Switzerland. So it’s just something to consider.
Sean McMahon 18:17
Yeah, I guess you can count me among the people who never thought a datacenter would play a role in keeping public pools open. But a it’s a big and wild world out there, I guess. And speaking of the big world out there. Now it’s time for our interview with Jill Blickstein, the Vice President of Sustainability at American Airlines. But before we get started, I want to point out that while we’re all missing care in this episode, you still get to hear from another smartbrief content expert. That expert is my esteemed colleague, Angie Giroux, and she covers the aviation industry for SmartBrief, so I invited her to join me and Jill for our conversation. I hope you enjoy it.
Hello, everyone. And thank you for joining us today. My colleague, Angie Giroux and I are pleased to be joined by Jill Blickstein from American Airlines. Jill, how you doing today?
Jill Blickstein 19:08
Great. How are you doing today?
Sean McMahon 19:10
Great, great. We’re here to talk about everything that American Airlines is doing in the world of sustainability. So let’s start right from the top. When people think of American Airlines, they think of these big beautiful jets zooming around the sky. And so you know, when you take a fleet wide view on everything your organization’s doing, what are some of the steps that American Airlines has taken to become more sustainable?
Jill Blickstein 19:27
So sustainability is a pretty big challenge for aviation. And that means all airlines, particularly big airlines, and American is one of the largest airlines in 2019. Before COVID, we used about four and a half billion gallons of fuel and we emitted about 40 million tons of co2. And so while we’re flying some of the more efficient airplanes like the Boeing max and the Airbus 321 Neo, we’ve been through a big fleet renewal project over the last couple of years. You know, we still burn fossil based jet fuel. And so there’s a huge effort going on in our industry and working with fuel producers and governments and others to try to find a replacement or renewable version of that fuel. And so that’s something I’m hoping we’re going to talk more about today.
Sean McMahon 20:10
Yeah, let’s get right into that. I think you’re alluding to sustainable aviation fuel, commonly referred to as SAF. So for listeners who might not be familiar with Saf, what is it? How are these fuels created? And just walk us through the basics?
Jill Blickstein 20:23
Absolutely. So the sap that we’re using today, we’re burning a tiny, tiny bit, I call it about a teaspoon, we’re burning a tiny bit of sap today. The stuff that we’re buying is made by a company called Nesta based in Finland. And the idea is that you can take waste fats and oils and refine them into a fuel. And when you combine that fuel that renewable fuel with fossil jet fuel at no more than 50% SAF to petroleum jet fuel, and commonly it’s blended more like 35 or 30%, the resulting fuel is equivalent to Jet A. And I know a lot of times when I say that people kind of Blink and look at me, like how could that be real, but there’s an international standard setting body that actually approves jet fuel, and they approve the technical specifications of jet fuel. And so they’ve approved with this this fuel made from waste oils and fats is called Heba fuel. It stands for hydro process esters and fatty acids.
Sean McMahon 21:20
That sounds like a whole lot going on there. Okay,
Jill Blickstein 21:23
that sounds like it sounds a lot like a little too close to food, right. So the nasty fuel that we’re buying today is actually made from beef tallow, which is be fat, you know, we blend it and we take it in by ship to the Port of San Francisco. And it goes into the pipeline there, and it’s delivered to the airport. So that’s the kind of fuel is being made today. And again, it has that blend limit. What’s what’s amazing about that fuel, is that it can is a drop in fuel. And by that I mean it is dropped into the common tanks and airports, a lot of people don’t know, like all the airlines share at big airports, we all share these common tanks, so our fuel goes in. And then obviously, it’s mixed with all the other fuel and then it’s it’s used by every airline, that right, we get credit for the emissions reduction, because we’re using it. But think about that, like it’s made from beef towel, it goes into the common tanks, and then every airline can fly on it, every aircraft today can fly on it right, we’re not making changes to the fueling system, we’re not making changes to the aircraft for it. And if you’ve flown out of San Francisco or LA in the last five years, you’ve probably flown on a little bit of stuff.
Sean McMahon 22:25
And I understand it’s one of the most important things in terms of it being able to be used with any existing infrastructure and existing planes, things like that. Because otherwise, you run into supply issues in which airports are going to have this special kind of feeling which ones aren’t. So having it be more of a blend, I guess we’ll call it is is crucial, right?
Jill Blickstein 22:41
It’s crucial, because we’ve already put billions of dollars in investments into the fueling system into the pipelines into the tanks, right. And we can’t recreate that for a new kind of fuel. So sometimes people will say, Well, you know, I want to, I want to buy SAP and I want it I want this app to go on my plane, I want this app to go into like my route. That’s not how it works, right, it’s going into common tanks, a little bit is going on to every plane. And that’s why we use what’s called a bucket claim system. So you know, American bought the fuel or whatever airline bought the fuel, it went into the common tank. So we we get to claim the the environmental benefit of that fuel, but it is going into every we typically don’t fuel planes individually. Usually they’re their fuel from a common system. And the bottom line on SAF is that on a lifecycle basis, SAF has 75% lower greenhouse gas emissions than petroleum jet fuel 75%. In an industry where we can on a tip on a good year, reduce our emissions by one or half two, or 2% 75% is a very big number. And I would say that as we get better at making staff and as we use newer, more efficient pathways, that number is going to go up. In fact, we expect that eventually we have staff that is reducing our emissions by 90 to 95%.
Angie Giroux 23:56
You’ve added a lot of clarity there. Thanks for explaining that. smartbrief has included stories in our aviation newsletters about how American Airlines is looking to have 10% of fuel BSA f by 2030. Can you update us on American’s progress on reaching that goal?
Jill Blickstein 24:15
Absolutely. So roughly speaking, if we’re burning about 5 billion gallons of jet fuel in 2030, our goal is about 500 million gallons of, of SAF by then and let me just put that in context a little bit for you. So last year, we probably burned more staff than any other airline. I don’t have definitive figures on this yet, but it’s about 2 million gallons, you know, in a year where we probably use three and a half to 4 billion gallons of jet fuel. So it really is a tiny amount. And there’s very little staff available in the marketplace today. Now that’s going to change, right? We’re learning about new production facilities coming online. We’re helping to get some of those facilities built as lots of airlines are looking to Do this. And the new provisions of the inflation Reduction Act there is a special blenders tax credit for the very first time. So that’s drawing new production and interest in investment into the United States and South. We have two contracts one with a company called a meet us and another with a new company, a company called GMO, who make all kinds of renewable chemicals and fuels and are starting to get into the Saft business. So we have definitive agreements to purchase about 220 million gallons of sap in 2030. And so we’re about to a little more than 20% of the way towards our goal in 2030. What’s interesting about that is when we go to sign contract, there’s two things I want to mention when when we go to sign contracts for staff, one of the things that’s really different is we’re signing contracts with companies who haven’t built their plants yet. And just think about how different that is from how we normally fuel right, we’re normally buying fuel from the oil majors fuel. Jet fuel is a super commodity, incredibly liquid, we trade with airlines, we trade with airports like it’s, it’s a very well oiled machine, right, no pun intended. Whereas now we’re buying stuff from people who haven’t made jet fuel yet. So it’s just a very uncertain kind of endeavor. And of course, all the stuff in the world, most of the stuff in the world is being delivered into California, because California has a financial incentive. So it’s cheaper to deliver stuff into California. Well, at some point, we’re all going to run out of California capacity. That will be I think that will be a high quality problem. I’m excited for
Sean McMahon 26:22
that day. Okay, now, you mentioned California a couple of times now, and you know, flights out of LA or San Francisco, or you’re probably using Southfield for that, or sorry, I guess if fuel is redundant, isn’t it? Sorry. Anyway, so I want to ask you a question. I do a lot of stories on the finance side, and a lot of companies are trying to, you know, the SEC is going to be coming out with some disclosure rules, right? Where companies need to track their mission, scope one, scope two, scope three. And I know you already mentioned that, like some people, you put a little bit in every plane, so you can’t really ask for a route that has the most staff. But do you see a future where that might be the case, particularly for routes that are maybe more relying on business travelers? Or if I’m Google, and I’m flying a bunch of people up and down from LA to San Francisco and back, you know, or wherever, maybe on the East Coast, it’s going to be New York to DC or New York to Philly or somewhere like that? Do you see a future where that segment of passengers will want to make sure that their executives are there people are flying on planes, where they can then track Hey, we’re, we’re using an airline American is offering more staff than any other competitors. So we’re going on American because American allows us to check that box or report that part for the SEC, is that something that’s just too pie in the sky? Am I just dreaming? Or is that something you think might become a reality, I think
Jill Blickstein 27:33
that’s gonna become a reality. So I share that dream with you. It will not be that South is on my plane. But it will be the case that you if you’re a big company, or that wants to reduce your emissions from your employees traveling, you will be able to come to me and by the emissions reduction value of staff. And I say it that way. Because if you’re a company Company X, and you want to be able to reduce your emissions, you don’t want to buy fuel from me, right? You want to get the credit from having flown on staff. And when I say flown, I mean that as an image not as an as a reality. Right? So if American has bought 2 million gallons of sap, let’s say or is using 2 million gallons of sap, you can then buy the image emission reduction value of that. And that’s because of how the scopes work. Right. So let’s just take one minute to talk about scope one and scope three, right? Scope. One are the direct emissions. When I American Airlines, USAF, I take the scope one emissions reduction, because it’s made from renewable source. But I have also incurred a scope three emission for the business travelers who traveled with us. So American burning jet fuel is not your direct emission, it’s your indirect emission, it’s your upstream or downstream. I get confused which one it is. So I can still take the scope one emission reduction for SAP and you can take the scope three at the same time. That’s double counting. But that double counting is built into carbon accounting. carbon accounting was meant to have this because the people who created it wanted me the airline to have an incentive to reduce my emissions. And they wanted you my customer to talk to me about reducing my emissions. Does that make sense?
Sean McMahon 29:14
Yeah, absolutely. That’s the symbiotic relationship. I hate using that word. Because I seem I feel so cheesy, but it’s a symbiotic relationship that the policymakers are trying to generate, right?
Jill Blickstein 29:23
Yes, they want you to pressure your supply chain. And they want me to pressure my supply chain too. So I’m now talking to my jet fuel producers about how they can reduce their emissions in the production of jet fuel. So we’re all supposed to be pressuring all of our supply chains. And in that way, we really will get more serious emissions reductions.
Sean McMahon 29:41
So that takes you back to what you’re saying earlier about house. You’re exploring relationships with manufacturers, you haven’t even built the plant yet. So now you can have some insight or input on how they create that plant and build it and operate it right. Yes.
Jill Blickstein 29:53
And I’m also having conversations with my customers, you know, we’ve sold, we’ve done exactly what you’ve been talking about. We have actually sold the emission reduction To the value of sustainable aviation fuel to a set of corporate customers who themselves have, for example, science based targets, they really need to reduce their scope three. And a company like Deloitte, for example. They don’t have a lot of direct emissions, they have a lot of scope three, because they travel a lot. And so we actually approached them and said, we want to test out this new, this new way of transacting with Saf, right? Because eventually we want to do is create a SAS certificate. That’s the end goal, so that you as even if you’re a leisure traveler, you’re going on vacation with your family, but you want to offset your emissions, maybe you could buy a carbon offset, or maybe you want to buy, you want something that’s actually in the airline business, you actually want to buy the emission reduction value of staff, you one day, you will be able to go buy a staff certificate. Wow.
Sean McMahon 30:45
It’s incredible even just to take the family on vacation.
Angie Giroux 30:47
Yes, it’s good stuff. Seems like there’s a lot of great opportunities going on for staff. We’ve been hearing about zero Abia and other ways American Airlines is investing across the industry to reduce his carbon impact. Can you tell us a little bit more about those efforts?
Jill Blickstein 31:03
Absolutely. So we have a goal to reach net zero emissions by 2050. And we do have a science based target approved for 2035 as well. So we have to reduce our emissions very significantly, at least by 2035. And obviously thereafter, if we’re going to meet the goals of the Paris agreement, we have a plan that we’ve laid out for how we’re going to do that, which relies a lot on SAF and on new modes of propulsion, and on having the newest aircraft and engines. So new propulsion, we’ve invested in two companies, one is their Avia, and another is universal hydrogen, both of whom are working on hydrogen propulsion for aircraft. Now, hydrogen propulsion is not new, the military flew on hydrogen in the 1950s, I think. But the modern version of it using fuel cells is really in its infancy. And I will say, you know, I’ve been doing this role for about three years. And in that three years, I’ve seen a huge amount of acceleration, right, we got the soft tax credit, we’re seeing a lot more soft production, we’re seeing hydrogen has gone from something that people said was impossible. Now, both those companies have done have performed test flights using a hydrogen fuel cell actually burning hydrogen, and to make electricity to power the rotors. So zero Avia wants to create first very small regional planes. And you know, obviously start small so that we can go to something bigger, and universal hydrogen did a test flight, they are going to do a retrofit for small regional planes at the beginning, although these are more like I think, 40 to 50 seater. So that’s a decent sized plane. And then what they what they want to focus on is the hydrogen, the logistics of hydrogen fuel delivery to airports. So this was something we talked about at the beginning. You know, SAP is great, because you don’t have to create a whole new logistics system. The idea, we also probably can’t create a whole new hydrogen logistics, infrastructure. But what they’re what universal hydrogen is doing is creating capsules that can contain the hydrogen that can be moved by truck easily from airport to airport or among airports. And that can be loaded pretty easily onto the plane. So you’re not talking about creating a whole new fueling system. And so American Airlines is investing in both sides, I call it of the hydrogen, what will become the new hydrogen ecosystem, right? It’s having a new hydrogen propelled plane. And it’s having a way to deliver the fuel that is low emission and efficient.
Sean McMahon 33:24
Okay. And speaking of other initiatives, or other, you know, efforts that American’s making, I saw you got y’all are interacting with the Bill Gates led Breakthrough Energy ventures, what’s that relationship look like? And how did it get started?
Jill Blickstein 33:35
So we are a anchor partner of Breakthrough Energy catalysts. So Breakthrough Energy has a bunch of different companies in it. One of them is Breakthrough Energy ventures, which is obviously doing venture investing catalysts. The goal of catalyst is to provide low cost capital, to companies and projects that are positioned to scale. So it’s not super early investing. It’s investing in technologies that work in the lab. And that and we’re these companies need extra capital, we need capital to build to actually get to scale. So it’s very kind of purposeful, we’ve been looking around for a strategic partner on sustainability. Because, well, obviously, airlines don’t make fuel right? We don’t make airplanes we go to OEMs. And we ask them to make us airplanes and engines and all these other things, right? We don’t make we don’t make all the stuff we eat fly the airplane. So we’re not. I wouldn’t call us like the experts in making any of those things. And so we were looking for a partner who shared our goals, but could help us make the smart choices about where to invest. So we have $100 million commitment to Breakthrough Energy catalyst. Catalyst has already made an investment in Lonzo jet, which is a staff producer in the United States. It’s going to make alcoholic jet staff meaning they’re going to make staff using ethanol, and they needed the catalyst financing to build their test plant. So it’s only the test plant is gonna make about 10 million gallons a year I think, but once they get the technology right and the test plant, then they can go build bigger plants and that is sort of A great test case for how we want catalysts work.
Sean McMahon 35:02
Well, that sounds great. I’d love to get an update from you down the road about other kinds of smaller ventures that are getting bigger through the catalysts. So we’ll try to follow up with you on that.
Angie Giroux 35:10
Jill, can you talk a little bit about American’s plan to transition aircraft from steel to carbon fiber breaks?
Jill Blickstein 35:17
Yeah, so this is interesting, you know, the most brakes on planes are made from steel, which is pretty heavy. And the military actually pioneered the use of carbon brakes. Because they were lighter, they could absorb more energy, and they lasted longer, they were also more expensive. Now, I think because of innovations in technology, that price has come down somewhat, but also because they’re lighter. And they last longer, right, there’s a return on investment there. So we have recently begun a plan to purchase carbon brakes from saffron for our 737 fleet. And we’re going to save lots of fuel and lots of emissions. And that’s one of the things we can do in our operation, right? And we’re looking at things like that we probably have a list of 20 or 30 Different things that we’re we’re always in in the mode of pricing out when can we get a return on the investment in these things? How will they help our operation? Where can we save on maintenance? You know, one thing that we did in the last couple of years, we invested in a new application, you know, the pilots now instead of having to have these big books of directions and instructions, they now get lots of the information they need to operate the flight on their iPad, right? That’s the new flight bag is the iPad, and through the Wi Fi on the plane, we’re delivering real time weather information to pilots. So they’re constantly are able to check on an ongoing basis. Has the weather changed? Are we seeing a storm are we seeing turbulence and turbulence obviously, is a critical safety issue, but also very important to fuel burn. And so pilots now see a very clear screen that shows them where where turbulence is and shows them how to change their route and usually a slight change in altitude to avoid an area of turbulence. And we have saved millions and millions of gallons of jet fuel by giving pilots this new tool in the cockpit.
Sean McMahon 37:02
Again, it sounds like something that passengers might not really realize is happening in the cockpit, but it is enhancing their travel experience.
Jill Blickstein 37:08
Exactly, exactly. I mean, just like the lighter paint, you know, we’re putting lighter pain that lasts longer on our aircraft, passengers aren’t going to really see that or recognize the value of that. But it also saves fuel. I mean, that’s, you know, the technologies that we started talking, you started out talking about the staff and the and the new propulsion, those are going to come really upscale, it’s going to take probably a decade for those to really come on sale. So what we’re doing, we’re doing everything we can in our operation today to save fuel. In the end, it’s going to save us, you know, one to 2% I’d say of jet fuel of our of our jet fuel on our emissions, whereas SAF and new propulsion, the new propulsion, if we can grow the industry for green hydrogen, that could be zero emission flying.
Sean McMahon 37:51
Yeah. And he said the prospect or the potential that zero emission flight is even, you know, even more breathtaking, I guess you’d say, it’s even better. It just occurred to me, a lot of the things we’re talking about right now are things that passengers might not notice. Right. You mentioned, like, you know, you might not even know if your plane is, you know, powered by staff or percentage of staff, and some of these other things that are going on behind the scenes. But what are some of the things just from a sustainability perspective, or, you know, conserving fuel or just reducing carbon emissions? What are some of the things that American’s working on that passengers might see or might benefit from directly, and it’s really kind of putting it in front of them rather than behind the scenes.
Jill Blickstein 38:25
You know, you’re absolutely right, that customers don’t see the most important things that we’re doing to reduce our impact on the planet. And so everything from the fuel, I mean, obviously, they’ll see it when they’re boarding a whole new kind of aircraft, for example. But there’s a lot of other things we do in our operations that have a big impact. And I’d love to talk about those in a bit as well. What they do see are the plastic cups and the plastic cutlery and the plastic wrap on their food and all of that and we are working to reduce that. I say that with some hesitancy because I think during we had a lot of plants before COVID. And COVID just took everyone you know, we weren’t allowed to hand the can of coke to the passenger anymore, right in COVID. So it really put a stop to a lot of the things we were trying to do. Lots of those things have been reintroduced. We are recycling more, we’ve picked up the recycling. We’ve replaced plastic cutlery with bamboo cutlery and lots of lights. Before COVID We got rid of the plastic stirring sticks and the straws. Of course, we’re an airline. So we couldn’t get rid of all the straws. I think we still have one or two straws for people who need them. But we were able to get rid of most of the straws. And we’re very big. So when we go to replace something, we have to have a supply chain that can really deliver that product to us. And so yes, we’re making we’re making progress and our customers should should be seeing on their flights, lots of new products that might look a little bit different than the products that we’re used to seeing.
Sean McMahon 39:47
So I was on your website doing a little bit of research ahead of this and I did see something that caught my eye and it’s called Smart Gating. And I think every traveler can relate to the feeling of you know, you’ve landed at your destination, your taxi Then over to the concourse. But then the pilot comes on and says, Oh, well, we got to sit on the tarmac because we don’t have any gates to park at right now. So it sounds like American’s working on smart gating is something that American’s working on to try to fix that. Can you describe what smart gating is for our listeners?
Jill Blickstein 40:17
Yes, absolutely. So assigning planes to gates was a manual process. And it took four hours, this is my favorite part, it took four hours every night between 10pm and 2am, that the dispatch team had to sit down and like map out where every plane was going to gate. And then as soon as something went wrong, they had to fix it completely fixed the plan, right, because it all every flight cascades to the next slide, what we did was we used, we built internally, a machine learning application that sits on top of the existing application and takes that four hours down to basically like two and a half minutes that it takes to actually assign. And of course, you know, the teams went out to every airport to learn all the intricacies of what you want to do is, you know, lay in the plane, probably at the gate that is well positioned for the next flight, right. So that’s also saving you saving you time and money. In the end, what it’s done, we’ve deployed it at DFW and at Dallas Fort Worth, and at the Charlotte airport, which are two of our biggest hubs in the United States. And it’s already saved us a million gallons of fuel by reducing taxi time by about two minutes. So those two minutes that you’re sitting there wondering, if you’re like driving into the next state, that ride is gonna feel shorter, and it’s gonna burn less fuel, and it’s gonna save a lot of emissions.
Sean McMahon 41:23
You said, it’s a machine learning tool, and we live in a world where it seems like AI is a bad word these days. But are you suggesting, Jill that there’s AI being put to good use, is that what you’re trying to tell us?
Jill Blickstein 41:31
That’s exactly what I’m trying to tell you. There are lots of very complex operations at an airport. If you ever get a chance to get a view of what airport operations look like our COO showed us one of those fast action films where they speed up all the action, you can see what it really takes to get an airplane off the ground. It’s multiple teams working on multiple in sequence, right. And so much has to happen. And so much has to happen in the right sequence and fast for us to turn an aircraft and so anything we can do like like smart gating, where we’re using these new tools, you know, the all those people who were spending four hours trying to assign planes to gates, think what they can do now, with that time, and that freed up brain power. So it’s pretty exciting.
Angie Giroux 42:13
I think it’s fascinating technology I’m picking it really does, you know, enable a smoother travel experience for passengers. Okay, I
Sean McMahon 42:20
was looking at your website, when in terms of you know, operations that are powered by renewables. There’s something in there about how your your corporate headquarters, I think at DFW is 100% renewable.
Jill Blickstein 42:29
Yes, we are purchasing renewable energy certificates to offset all of our electricity use in our North Texas facility. So that includes our headquarters and our integrated operating center, and our training facilities, and obviously the airport as well. And we’re talking to all of our airports about how we can work together to reduce fuel use to reduce electricity use electricity, the emissions from purchase electricity are less than 1% of our total emissions. So because we burn so much jet fuel jet fuel is really the focus of our work, but we haven’t lost sight of the need to also reduce our electricity use.
Sean McMahon 43:02
Now, I want to circle back to something you mentioned earlier about how American you know has its carbon emissions targets validated by the science based targets initiative. Can you explain to our listeners what that is and how that process took place?
Jill Blickstein 43:13
So the science based targets Initiative is a set of environmental nonprofits, I think its World Wildlife Foundation CDP World Resources Institute, they saw that lots of companies were trying to set netzero goals and emissions reduction goals. And they also saw that investors and customers were struggling to understand how one company’s goals compared to another company’s goals. And if those goals had any science behind them, me now we have the Paris Agreement. Now we have the IPCC reports telling us what we really need to do to reduce emissions to meet the goals of the Paris agreement to essentially arrest global warming. So what they did was they came up with this rubric they call science based targets. So for example, they will tell companies, they have they published a pathway. So companies needed to be able to route that reduce their emissions on a certain path, to be able to get to zero by 2050. And they call that so that’s a ScienceBase. Target for for 2050. And they said to companies, okay, you want to publish a pathway or a target and you want our blessing. You submit your target to us, and we will review it, and we’ll tell you if it meets our criteria. And what I’ve read is that they thought nobody was going to want to do this. And it turned out that hundreds and hundreds of companies wanted to do this, because companies face the same problem, right? They wanted to set a emissions reduction goal, they want to show that they’re taking climate change seriously. And they needed external validation. And so the whole idea of the science based target initiative, I think, kind of exceeded the expectations of the people who set it up. So they they have been growing the initiative and for a long time, airlines could not even apply because all the emissions reductions targets from sbti. They were all absolute. So they said you have to get Your emissions absolutely down by whatever percent by let’s say 2035. They realized that it wasn’t appropriate for every industry. Because as we grow, our emissions are going to grow. And because we don’t have near term ways to really cut our emissions significantly, right, because we don’t have satphone. We don’t have new propulsion yet. Just real
Sean McMahon 45:20
quick, just to explain to listeners, so some industries have ready made solutions that are or at least really close to being ready. Other industries, whether it’s airlines or shipping or whatever, little farther away,
Jill Blickstein 45:31
yeah, airlines and shipping are called hard to abate. Very hard to evade, not really the moniker you want to have. Whereas think about like road transport is decarbonizing today with electric trucking can decarbonize by using renewable diesel, which is made from the same feedstocks, the same inputs that SAP is made from, I like to say I’m a little jealous of road transport, although the bonus is that as road transport decarbonize, it’s going to free up that ethanol production. And maybe we can, we’re on a path to be able to reuse that ethanol to make stuff. So that’s pretty exciting. So going back to the sinespace, target for a minute. So what they would what they did was they realized they had to create unique pathways for these hard to evade industries. So I think oil and gas has what aviation we have our own pathway, it’s a reduction in carbon intensity. So think about it as emissions per seat, for example. And we have to reduce our emissions essentially proceed by about 45% by 2035. So it’s far away. It’s a drastic cut. But that’s we expect SAF to be really scaling by 2030. And we expect to have be able to take advantage of cost competitive stuff in the 2030s. And we expect hydrogen propulsion to be well on its way by that as well.
Sean McMahon 46:45
Wow, that would be incredible. That’s for sure. All right. Well, hey, Jill, listen, this has been a fascinating conversation. Thank you so much for your time. We really appreciate it.
Jill Blickstein 46:53
Shawn And, Jay, thank you so much for inviting me. This was a lot of fun. And I’m happy to come back and report back on our progress.
Sean McMahon 46:58
We look forward to that. Thank you. Thank you. All right, everyone. Well, that’s our show for today. Thank you all for listening. And if you haven’t already, please subscribe or follow this show on Apple, Spotify, Google, or wherever you listen to your podcasts. And as always, please be sure to share it with your friends and colleagues. Have a great day.