Description:
Joel Makower interviews Bryan Sherbacow on the cost of sustainable aviation fuel and how the aviation industry can ensure an adequate supply in the future.
Title: Bryan Sherbacow Transcript
Duration: 5:24 minutes
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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 Bryan Sherbacow talking with no audio.
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Flightpath: Navigating the Route to Sustainable Aviation
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This episode
Sustainable aviation fuel
{Joel Makower sits onscreen. Facing him is Bryan Sherbacow. The camera alternates between speakers.}
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Joel Makower
Executive Editor
GreenBiz.com
Joel Makower
I’m Joel Makower, executive editor at greenbiz.com I’m here with Bryan Sherbacow, the chief commercial officer at world energy. So, what exactly is a sustainable aviation fuel?
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Brian Sherbacow
Chief Commercial Officer
World Energy
Bryan Sherbacow
For all intended purposes, it’s just jet A, it’s the same thing. The difference in fact, is not the performance within the turbans within the plants themselves, it’s the sustainable nature of the fuel. And that’s two-part, it’s the carbon reduction that takes place with regard to the production of the fuel and then it’s the sustainable performance of the fuel when it’s put into the plane.
Joel Makower
Talk a little bit about the cost implications of the sustainable aviation fuels. Where they are now to how much they can drop over what period of time?
Bryan Sherbacow
When we first started 10 years ago, we were operating in a pilot facility, and we were running inefficient batches. We were basically demonstrating the supply chain and we were demonstrating the commercial application inside a refinery. a\And so it’s done, again, small scale, batch processing. The cost was 50-60 dollars a gallon because of the inefficiencies. We then moved out from a batch process into a continuous process we started increasing the quantities that we were making regularly. And we started driving down the price. We believe there will be a cost parody within less than 10 years.
Joel Makower
So what would it take for World Energy to scale much more rapidly than it currently is?
Bryan Sherbacow
It’s really about getting the investors that we have on the sidelines comfortable with the point capital. We need the policy that’s going to support the investment. dollars are there, we get the regional low carbon policies, and the ability to be economically efficient, the money will flow and we’ll be able to expand our production. I would say the leading policy today globally with regard to creating the demand signal and the confidence and noble fuels has got to be in the state of California. They have a low carbon policy. It’s part of a cap and trade and low carbon policy that was initiated several years ago by then governor Arnold Schwarzenegger. That policy, and that price on carbon allows us to generate additional revenue. That as a result allows us to pass that onto our customers in other words reducing the cost. The world seems to be tipping towards California at the moment, we’re hoping that that policy gets recognized and replicated globally.
Joel Makower
The concerns about aviation and environmental sustainability have seemed to be growing over the past number of months. How has the conversation changed over the past year or so around sustainable aviation fuels?
Bryan Sherbacow
I would say that one of the most important changes that we have seen is really within the stakeholders of corporations, whether it’s the investors or the customers who are really demanding low carbon solutions and so this is getting all the way up to the board rooms and the board rooms are then telling their executive teams and their operational teams that they really need to do things differently. Within the board rooms they’re actually incentivizing their executive teams these days in certain instances. Tying their compensation directly to low carbon successes.
Joel Makower
What is being driven by are the greenhouse gas emission reduction goes off in science-based targets that they’re now striving to meet by the next 5 to 10 years or sometimes longer. They’re looking for opportunities to do that and they see aviation as one of the untapped areas.
Bryan Sherbacow
Showing that these products are available and the low carbon solutions are available., that they’re being deployed. I think these opportunities are awakening certain sustainability officers’ awareness and allowing them then to support and ask for the solutions on more wide scale basis. And we need larger constituencies recognizing what we can do today and sharing that information with larger audiences. The larger audiences then create more awareness and ultimately more changes within the way that the industry operates and the policy that incentivizes the access to low carbon solutions.
Joel Makower
So, let’s say I’m the CEO of a major airline, what should I be doing now to ensure an adequate supply of sustainable aviation fuels in the years ahead.
Bryan Sherbacow
Historically what CEOs and aviation companies have done is send demand signals through willingness to enter into offtake contracts with potential producers. The issue is the price sensitivity within those contracts is such that they’re saying ‘if you can produce it at a price that’s comparable to my current opportunity then we’ll buy as much as you can produce. The issue is that’s not sufficient today to deploy more production, there’s still an incremental expense that needs to be overcome. So, I would think that the efficient demand from a commercial aviation executive today is going to be to work through the policy. Whether its traditional refining or renewable refining, we have options with regard to what products we are going to make at our refinery, it can be ground transportation fuels, and it can be aviation fuels. So, we’re going to look at it into the marketplace and we’re going to see which is going to give us our best return ultimately to the planet and our investors. And today, policy is skewed more towards ground transportation fuels. The opportunity for executives is to reach out to policy makers to send demand signals.
Joel Makower
Bryan Sherbacow is chief commercial officer for World Energy, thanks so much Bryan.