Watch: Creating sustainable supply chains

Description:

A leading expert on supply chain sustainability discusses how companies can respond to the growing pressure to shift their operations and build a sustainable future.

Title: Creating Sustainable Supply Chains

Duration: 4:55

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The Shell™ pecten logo appears, then fades. A three dimensional model of Earth rotates while white silhouettes of planes fly across the globe. On the right side of the screen, a shot of Alexis Bateman talking with no audio.

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Flightpath: Navigating the Route to Sustainable Aviation

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This episode

Creating Sustainable Supply Chains

{Joel Makower sits onscreen. Facing him is Alexis Bateman. The camera alternates between speakers.}

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Joel Makower

Executive Editor

GreenBiz.com

Joel Makower:

I'm Joel Makower. We're talking about what it will take to make aviation sustainable with Alexis Bateman, Director of the MIT Sustainable Supply Chain Lab. Hey, Alexis. So, let's talk about aviation, sustainability and supply chains. Tell us about how and where those three intersect.

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Alexis Bateman

Former Director, Sustainable Supply Chain Lab

Massachusetts Institute of Technology

Footnote reads: *Alexis was Director at the time of taping.

Alexis Bateman:

When you look at the whole system of things, air [cargo] does have very high emissions impact, but it also carries really high-value items despite only carrying a very small portion of the goods. So, looking at those three factors, we land on the criticality of aviation in supply chain. So, there won't be reduction of that use. And in fact, during COVID the need to air freight goods went way up because of the urgency for certain materials to arrive in a very short amount of time. The most clear and relevant and current example would be pharmaceuticals, in particular, high-imperative vaccines, right? And so we can't compromise on the timeline to deliver it to the customer, as opposed to other goods where we might be able to change the delivery time or the modes to fit our needs. Aviation is critical for certain sectors.

Joel Makower:

What's the role of sustainable aviation fuel in all of this? How much of a difference can it make?

Alexis Bateman:

I think it's a pretty significant impact and we know that because no one's going to stop using air to move goods. We need it for high-value, highly perishable goods reaching market on time. That's not going to go away. We have to understand that we're still working within the bounds of traditional supply chains that we need to move goods around in expedient way. And so sustainable aviation fuel being one solution of a suite of solutions and how we actually scale that and actually transition away from fossil fuel-based aviation fuel, can certainly be one key solution in reducing the overall emissions of aviation.

Joel Makower:

So when it comes to making aviation sustainable, explain the difference between a carbon offset and a carbon inset

Alexis Bateman:

Carbon offsets would be accounting for the impact of, whether that be your goods’ movement or whatever level of unit of impact you're trying to mitigate, and purchasing the environmental attributes of a project in another part of the world to actually mitigate the impact of your industrial emissions. The new approach that is becoming more common is a carbon inset. Instead of purchasing those offsets in other parts of the world, we’d be insetting that within the actual production of SAF and the use of SAF in the supply chain. So that change is one, upgrading the industry, keeping it within the value chain and creating those collaborative opportunities, I think that’s another differentiator, which is looking at fuel providers working with carriers and scaling the use of SAF.

Joel Makower:

What would carbon insetting look like for the aviation industry?

Alexis Bateman:

That is the question that we're working to refine, which is, sustainable aviation fuel is one solution to reduce the overall impact of aviation, we know this needs to be addressed and SAF is one solution. But certainly right now it's not really economically viable nor has really a great pathway for scaling. And so how can we use the value for something that we might have bought carbon offsets for, where that would be going to some other exercise in another part of the world, how can we use that investment and reinvest it to actually pay for the premium of SAF? And reinvest that value from the offsets that would have been historically somewhere else, into aviation.

Joel Makower:

What does this mean for logistics service providers? Will they soon be competing on sustainability?

Alexis Bateman:

So I think that in a busy marketplace and when you're competing, that that can be a differentiator, particularly as there's a greater requirement from shippers to really understand what does their logistics network look like? What is the overall impact? How can we account for it? How can we show a reduction over in time?

Joel Makower:

What gives you optimism?

Alexis Bateman:

People are looking us up and calling us up, and saying, "Help us answer the hard problems," whereas historically, they didn't even want to talk about it. So that optimism that I've had over time is just continuing on that trajectory, because there are people ready to tackle the hard challenges whereas they were afraid to ask the questions a decade ago.

Joel Makower:

Thank you, Alexis.

Alexis Bateman:

Thank you, Joel.

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