Meeting expectations for sustainable aviation: A conversation with Angela Foster-Rice
Flightpath host Joel Makower, recently spoke with Angela Foster-Rice, senior vice president at Everland and former head of sustainability at United Airlines, to discuss what it will take to make aviation more sustainable.
This excerpt from their Q&A examines the airline industry’s progress so far; the mix of technologies, policies, and market forces needed to decarbonise air travel; and the role of travelers and investors in helping drive change. Please note that this transcript has been edited for length and clarity.
Joel Makower: Angela, from the perspective of your 15-year career, how would you describe the aviation industry's sustainability journey to this point?
Angela Foster-Rice: Back in 2008, the industry made very aggressive carbon-reduction goals, and I think it's done a really terrific job keeping its commitment. What's different now is that expectations are much higher, so we need to see whether the industry can meet those growing expectations.
Joel Makower: One of the realities of the moment is that the airline industry is hurting and is on a path to recovery that’s probably going to take a while. Do you anticipate that the current business slowdown will impact airlines’ sustainability initiatives?
Angela Foster-Rice: From what I'm hearing—both in public statements and also in private conversations—the airline industry is very committed to meeting the goals it has already established. Along with the industry as a whole, individual airlines have also made bolder commitments. I think we’re going to see a pause in some sustainability efforts because the airlines need to take care of their employees, customers, and communities that have been impacted by COVID. I think that's exactly the right answer and that's how you build trust with your customers and your other stakeholders. But I don’t think that COVID will have a long-term impact on sustainability goals.
Joel Makower: What would it take for there to be a race to the top, where each airline wants to outdo each other in addressing the climate crisis?
Angela Foster-Rice: I think we're about to find that out, to be quite honest. The COVID period has been a moment of pause and reflection, and we're going to see how customers respond post-COVID to the actions that airlines are taking. If we see customers increase their interest in airlines reducing their emissions, the airlines that are ready to go and have options for the customers are going to benefit.
Joel Makower: How would you describe what business travelers expect right now from airlines when it comes to sustainability?
Angela Foster-Rice: Something like 65% of customers are now making decisions on whether companies are aligned with their ethical beliefs, such as a need to protect the environment. So there's growing demand and interest from business travelers and also from general travelers for airlines to reduce their carbon footprint.
Joel Makower: How are airlines doing? Are you seeing any encouraging signs?
Angela Foster-Rice: We absolutely are seeing engagement by airlines. One of the key pieces of the puzzle is reducing carbon within liquid fuel. There have been great innovations and airlines have engaged to really make that happen. Sustainable aviation fuel (SAF) first became legal in 2009, and we've gone from pilot projects to small commercial scale in just a short period of time. Another piece of the puzzle is engaging around carbon offsets and helping customers purchase them more easily.
Joel Makower: Buying carbon offsets can be extraordinarily complex; there are different types at different price points. What advice do you have for a company thinking about how to buy offsets?
Angela Foster-Rice: You start by asking if the offsets are following a globally recognized standard, such as the Verified Carbon Standard or the Gold Standard. These are offsets that have been certified to high standards of quality. But in addition to that, you should think about what kind of impact you want to have: Is it empowering women? Is it water quality? Protecting biodiversity? You can find carbon offsets with impacts that not only tie into carbon sequestration, but also into a company’s broader corporate social responsibility goals.
Joel Makower: What's the risk to airlines if they wait to jump in to decarbonisation and let others be the early adopters?
Angela Foster-Rice: I think the risk is pretty high. An airline that’s looking at the small quantities of SAF that are available today could say, “Well the fuel is not here, so I can't buy it.” But the truth of the matter is that if the airlines don't demand more SAF and don't put their skin in the game, then the facilities won't be built. On the other side, around offsetting, there’s real movement where you have intermediaries essentially buying up the offsets that are in existence today. If airlines aren't coming to the table sooner, they'll actually face higher pricing long-term, both for fuel and for offsets.
Joel Makower: Sounds like a chicken-and-egg scenario around supply and demand and the price of fuels and offsets. What do we need to do to break that cycle, or accelerate it where it’s beneficial?
Angela Foster-Rice: First, on the fuel side, there's a lot of competition with ground fuel. Trucks and cars utilize about 75% of liquid fuels, so they're a much bigger piece of the puzzle in this competition as the technologies evolve. There is not the same level of incentives for SAF versus renewable fuel for trucks and cars, and that really comes down to policies: What kind of state, federal, and local policies can encourage SAF use? We're seeing the biggest improvements and growth in California, where you have a couple different initiatives available.
On the carbon-offset side, I think it comes down to the fact that airlines don't really have the balance sheet to do the purchasing and invest in offsets. We are seeing a lot more corporations with commitments to addressing climate change. If these companies can come forward and partner with airlines and with fuel suppliers to look at the entire supply chain, I think all three of those players can ensure that the offsetting occurs.
Joel Makower: You described three levers that have to be pulled: the innovation lever, the policy lever, and the market-demand lever. If you were to pull just one of those, which one would have the most impact in furthering the SAF market?
Angela Foster-Rice: The biggest piece we need is policy, because the technology exists and there’s real demand from airlines for SAF, but the costs are just too high. In order to address those costs, we have to have the right policies in place. We had a Defense Production Act that provided financing to help reduce capital investment costs for SAF production, but that funding is no longer available. There also had been a blending tax credit, which also was incredibly helpful. But as we’ve seen, for these policies that help they need to be there consistently to ensure that these facilities can actually be built.
Joel Makower: What about the role of investors? Do you see shareholders starting to hold airlines accountable and pushing them to go further in decarbonising?
Angela Foster-Rice: When it comes to investors pressuring airlines, we're still pretty early on. They are certainly asking the right questions of airlines and wanting to understand their decarbonisation strategies. But because the airline industry is so hard to decarbonise you don't see the same differentiation among airlines as you might in other industries. It's hard to see that maybe five years from now there will be differentiation between who's really using SAF and who's not. Those deals are being brokered today and will come to fruition down the road. So investors are asking questions, but they're not making decisions based on differentiation among airlines at the moment.
Joel Makower: We have a great tradition of waiting for technology to solve our problems. Why shouldn't we simply wait for aviation technology to solve this problem for us?
Angela Foster-Rice: We need to be engaging in technology, and we are, but the problem is that aviation’s larger carbon footprint is from longer flights. Shorter flights are really the ones that will be enabled by new technologies such as battery power and hydrogen fuel cells—at least for several decades to come.
If you look at aviation and solving the carbon piece, 80% of the industry’s carbon emissions are from flights that are over a thousand miles. We really don’t have the ability to just change the technology for those flights, and we can't wait for them. We really need to engage on what's drop-in ready today, which is SAF.
Joel Makower: What could airlines do to engage their customers and help them understand that they actually participate in the decarbonisation process?
Angela Foster-Rice: I anticipate that over time we'll see the industry creating a platform for customer engagement. They need a way for customers to see that if they're willing to pay a bit more, they can actually help the airline use SAF and that they can make a difference for the natural ecosystem by sequestering carbon.
If people don't see, touch, feel, and understand what they are doing, then they're not going to spend the extra money to make it happen. So I think the most important thing is for airlines—or airlines in concert with fuel companies—to make the consumer’s impact really transparent. They need to tell a concrete story that if you pay a bit more you can help ensure that the flight is lower carbon, that you're protecting these ecosystems, and that you're making a difference from a climate-crisis perspective.
Joel Makower: Looking ahead a few years, what is the virtuous cycle we could achieve where success begets even more success in decarbonising aviation?
Angela Foster-Rice: I think it will be when people can really see and understand the impact they're having. It has to be something tangible that people believe in, and that they get regular reports about showing what impact they've had. Like if somebody has helped to buy SAF or has bought offsets, airlines should be able to communicate what impact they had with that flight or during that year thanks to decarbonisation. When people really believe and understand that change is happening because of those purchases, we’ll see progress accelerate.
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