The SAF Podcast with Andreea Moyes, Air bp

Who knew that a career in retail could lead you to combatting climate change? We're joined by Andreea Moyes, Global Head of Sustainability at Air bp, who shares how she's now spearheading the charge towards sustainable aviation fuel (SAF). Listen in as she shares the industry's perspective on Co-Processing, eFuels, power to liquid technology, why Air bp has not signed any offtake agreements yet and how important strategic partnerships and policy clarity are in scaling up SAF.

Are we ready for a cleaner, greener future of aviation? Andrea gives us an insight into the complexities of SAF production and use, helping us understand how corporate partnerships and favourable policies can make SAF more affordable and accessible. She also discusses the potential of HEFA, alcohol-to-jet, for the future of SAF, the significance of goal posts and roadmaps in this endeavour, and her frustrations in the workplace. The future is here, and it's time to buckle up as we journey towards net-zero goals by 2050.

Find out more about Air bp here: https://www.bp.com/en/global/air-bp/aviation-fuel/sustainable-aviation-fuel.html

Find out more about SAF Investor and our conference in London on the 27th-28th February here: https://www.safinvestor.com/

If you like this episode, catch our recent discussion with Chris Brown, KPMG Ireland, on the realistic chance SAF has on making its targets, here: https://www.buzzsprout.com/2202964/13376452

Host: Alasdair Whyte, SAF Investor
Producer: Oscar Henderson, SAF Investor

Transcript

Alasdair Whyte: 0:06

I'm Alistair White. You're listening to SAF Investors SAF podcast. There's so many different stakeholders and people shaping the future of SAF, but Big Oil has a huge role to play. So for this episode, we're absolutely delighted to have Andrea Moyer's, global Head of Sustainability at Airbnb, and she's going to take us through what Airbnb is doing to produce and to market SAF and how important regulation is to the market.

Alasdair Whyte: 0:37

We hope you enjoy it. So we're absolutely delighted to have Andrea Moyer joining us this week, and Andrea is Global Head of Sustainability at Airbnb. How are you?

Andreea Moyes: 0:50

Hi, al, I'm doing great. How are you today? Very well, thanks.

Alasdair Whyte: 0:53

And you're coming to us from California, where the sun's shining.

Andreea Moyes: 0:57

Yes, about to start a very warm day today here.

Alasdair Whyte: 1:04

It's always. It's shiny there for you, though, isn't?

Andreea Moyes: 1:07

it. It is shiny, but the summer has been a hot summer too, so but not complaining, really grateful to live here and really love it.

Alasdair Whyte: 1:17

You've been at BP a long time. How did you end up in the aviation side and how did you end up in sustainability?

Andreea Moyes: 1:28

I started working at BP 19 years ago. Initially I joined in the convenience retail part of the business and back then BP was coming out of a long series of mergers and acquisitions with companies like Amaco and Arco and Castrol, so it was a large M&A activity and at the time BP was Fortune 2. Only Walmart was bigger than BP at that time. We had no tech companies back in the day. So it was a really interesting time.

Andreea Moyes: 2:05

I joined BP when we had such a merger of different cultures and systems and it was all about how do we harmonize and become one company, and so I did that for a while. And then I kind of moved around in other businesses in our downstream what we call downstream, so businesses that produce and market fuels that the company is producing. And so I worked in convenience retail for a while fuel pricing operations, strategic accounts. For a while I sold petroleum coke and about eight years ago I joined our aviation business and initially I was an account director working with some of our largest airlines like America and Delta Southwest, and then about three years ago I came into this role, the sustainability role, and here's where I am now.

Alasdair Whyte: 3:03

And your role doesn't just include SAF. It includes all of the sustainability areas you're working on.

Andreea Moyes: 3:09

Yes, yes. So the role is about understanding what the industry needs in terms of decarbonizing the sector and how we want to participate at BP to respond to those challenges. So it's beyond SAF, but certainly in the near term, saf is a very big component of the decarbonization journey.

Alasdair Whyte: 3:33

And when your colleagues are doing the job you used to do. They're out talking to airlines. Are they seeing SAF as something they need to start using today, or are they looking at more in a medium to long term?

Andreea Moyes: 3:47

Our customers are very eager to get as much SAF as they can right now. In fact, the lack of availability is one of the themes of many of our discussions. So yes, they want to use SAF, they're ready to deploy it, they have ambitions to decarbonize their operations and I think it's a very here and now opportunity.

Alasdair Whyte: 4:17

And should we explain a little bit about how Airbnb works, because BP is also producing or co-producing SAF, isn't it?

Andreea Moyes: 4:25

Yes, yes, so we produce SAF today via co-processing, so we bring in renewable feedstocks that are pre-treated and utilized in existing operations, and some of the fuels that we produce can be utilized in aviation. Airbnb supplies many airports around the world and some of that supply comes from our refineries and some of it is fuel that we bring in by ships, by rail, by pipeline. In some airports we have interplane operations, which means we are the ones that put the fuel physically into the wing of the airplane. And in other markets that have different models, for instance US, we don't have into plane operations, and sometimes we inject the fuel into a pipeline or we truck it to an airport, but in all cases the airport system is a commingled space of tanks and we bring in the fuel, like other suppliers do too, and that's how airplanes get supplied.

Alasdair Whyte: 5:37

And that for people who haven't lived into SAV, that's sort of. One of the key things is that most of the time when an airline's using SAV, it's commingled with other traditional fossil fuel.

Andreea Moyes: 5:48

Right. This is actually one of the reasons we love SAV as a concept, because it is a drop in fuel. Drop in fuel means you can put it in existing infrastructure and existing airplanes without any modifications, and this is very significant because it means we can use it now if we produce it, and also there's a lot less cost around redesigning aircraft or infrastructure to accommodate new fuels.

Alasdair Whyte: 6:16

And as a company you also work with other producers, so you'll buy SAV from a pure SAV refinery and then bring it into your network.

Andreea Moyes: 6:26

Absolutely yes, and there are some complexities on SAV there because typically new developers produce pure SPK synthetic paraffinic kerosene that needs to be blended up to 50% with conventional jet in order to be utilized in these commingle systems, and we perform that activity. We blend and test for quality and safety purposes and deliver the fuel into airport systems.

Alasdair Whyte: 7:00

Is blending that complicated? They just put it all in a big tank and give it a stir.

Andreea Moyes: 7:08

There are some, of course. Safety is paramount in aviation and there are some aspects around fuel quality that we need to be aware of and complications around blending. If you miss your recipe, then it's very difficult to treat or re-blend the fuel, typically because there aren't that many tanks where you can put fuel from one tank to another and so on. You have to be very conscious of the logistical constraints around blending. So it is. It's not a super complicated thing, but it is an art to do it well and correct.

Alasdair Whyte: 7:48

So you've got customers who are desperate for demand. How do you find supply?

Andreea Moyes: 7:57

So BP has it's doing already some production, but, more importantly, we're preparing for large scale projects that we have announced. So when we announced our ambitions to decarbonize in the sector, we looked at what we can do in our own portfolio and have announced five projects up to three bio refinery conversions, which some of them are existing refineries and two new projects. So we know now that those locations are Rotterdam, castillon in Spain, lincoln in Germany, cherry Point in US and Quinana in Australia. So those projects are in engineering phases, permitting and so on, and we hope to bring them online by 2030. Meanwhile, we continue to produce staff, as I mentioned, via co-processing already in two of our refineries, lincoln and Castillon, and this fuel is currently deployed in airports in Europe.

Alasdair Whyte: 9:10

The co-processing. For people who want a technical view of it, you basically take, I'm guessing, the EF, mainly the hydrogenated fats, and then you just whack it in the back of a traditional refinery, Daniel, and that's how you make it.

Andreea Moyes: 9:26

Right, so HEPA is the name of the technology. The actual feedstock we use is used cooking oil or other types of waste oils, but that's typically the one that's being used. Some refineries in US use also beef tallow, but in Europe we use cooking oil and it's pretreated basically to remove any contaminants that are impactful to the refinery equipment and processed very much in a very similar manner to fossil fuels today, which is one of the reasons that the industry loves oils waste oils so much, because they are compatible with technologies that we are quite familiar with already.

Alasdair Whyte: 10:10

And is it used? Cooking oils and fats Are they the feedstocks for all of the five projects you've announced?

Andreea Moyes: 10:17

These five projects are HEPA technology. They won't just use cooking oil. We're looking at a slate of feedstocks for these plants and use cooking oil isn't available at such a scale to give us confidence that we can use that at 100% level. But we're quite happy with the feedstock slate that we've selected. And one of the things that we're super excited about is actually maybe you've heard of cover crops oils. That goes in between normal agricultural cycle so it doesn't cause new land use and it has the potential to grow our production with HEPA technology quite a bit. So we're super excited about this and we're already doing some testing with the first shipments of Carinada this year. And can that grow anywhere? So cover crops there's more than one, and some of them like cold weather, some of them like warmer weather. Carinada is, I think, right now we're growing it in South America, but it has potential for the Americas in general and they estimate they could produce quite a lot of seed oil from existing agricultural lands in Europe and the Americas.

Alasdair Whyte: 11:53

And these projects, the converting? Will they be solo-saf or are they also gonna produce biodiesel?

Andreea Moyes: 12:03

The plants have a total capacity of 100,000 barrels per day. About half of it is meant to be saff, so about 50,000 barrels per day across the five projects would be SAF production.

Alasdair Whyte: 12:24

And I'm sure you don't want to give out a figure, but we're talking huge amounts of money in converting and building new ones.

Andreea Moyes: 12:31

Yes, I mean this is I can't give you I don't even have it the BP numbers because the costs have actually gone up quite a bit with inflation recently. But these plants are quite expensive, you know. They're in the billions of dollars ranges to build one of these plants. And we're really pleased that BP has committed to biofuels it is actually one of our five growth engines and we direct investments in these growth engines and really happy to have investment money for the Hafa plants.

Alasdair Whyte: 13:12

And how much of it is already committed to our lines.

Andreea Moyes: 13:16

The fuel that we'll produce.

Alasdair Whyte: 13:18

And 20%.

Andreea Moyes: 13:19

We don't actually have off-take agreements. That's something that we are consciously choosing to do, because we will discover the market and the uses closer to when we're producing the fuel. We don't think it's necessary to have long-term off-takes upfront. There's many reasons for that. There's a lot of elements of risk that airlines are not willing to commit to upfront and also we don't think that we should lock in some elements of risk that are gonna be more visible later on.

Alasdair Whyte: 14:02

That's really interesting, sivki, and I guess that's the advantage of having your own marketing side.

Andreea Moyes: 14:10

Yes, I think having great relationships with our airlines is definitely up there. We're also seeing a need to address a global optimization and balancing of feedstocks and production, because one of the things that impacts our choices is different regulations in different parts of the world. So we want to have the flexibility to produce fuels that are compatible with different regulation around the world.

Alasdair Whyte: 14:41

You spend quite a lot of your time meeting governments, don't you?

Andreea Moyes: 14:47

Not directly, but we do have advocacy work through trade association and different panel discussions and industry conversations. So yes, I do hear from them and we do have a dialogue and on the whole, is it the same issues anywhere in the world?

Andreea Moyes: 15:14

I should say different governments have different priorities and whilst the industry priorities to decarbonize, governments have other things on their agenda too, like energy security, creating jobs, attracting investment, prioritizing biofeedstocks in areas where they can use them or deprioritizing them where they think that this is not compatible with food security and land use change. So there's definitely a different approach in the way governments think about SAF policy around the world.

Alasdair Whyte: 16:02

Do you think that we'll ever get to a stage where it's policies firm, because it does seem to change a lot, doesn't it? It seems to be that, and you're right different approaches where the EU will take one view of something, even just across the channel. The UK will look differently. The US is going very differently to the rest. Do you see any chance of harmonization, or is that just nevigable?

Andreea Moyes: 16:26

So there are some really good harmonization areas. A good example of that is the Corsia Standard. So IKO has this program that was initially started as an offset scheme but has since evolved to provide a very robust global sustainability framework for SAF. And this is kind of the common denominator where all countries and airlines and industry players come to discuss and agree what SAF is and what pathways are suitable, what feedstocks are suitable, how to measure them and so on. So I am excited about being part of an effort that is intending to set a global standard for fuels In terms of what kind of fuels and how much and where.

Andreea Moyes: 17:21

That is still regional policy and I would say we've made a lot of progress. We've seen a lot of progress in Europe, uk and US in the last couple of years. These three regions account for almost half of the global volume. We would like to see more effort in other countries as well, and I think they're looking at examples from these regions to implement policies in their own jurisdiction. What I think is important to note is that good policy gives you mentioned earlier stability. So we want to see more of that. We want to see policy that gives stability over the lifetime of a project, both in terms of what it is that we're gonna produce and also assurance around cash flows, so that the project can be successful and operate.

Alasdair Whyte: 18:12

Are there any markets which are? Outside of those ones which you think are doing a good job or where you're seeing a lot of demand.

Andreea Moyes: 18:20

There's many countries in which we're seeing seeds for policy development. I think the one that I'm personally most excited about is China because the sheer size of it and they've taken some interest recently and started to look into what does the roadmap for China aviation decarbonization look like? At the minute they are in consultation around standards for sustainable aviation fuel, so I think they are more interested and potentially could become a country that looks at policy supportive policy.

Alasdair Whyte: 19:02

Are you seeing any demand from airlines in countries where there isn't a mandate?

Andreea Moyes: 19:09

Yes, I mean airlines are gonna need fuel for Corsi globally, because Corsi is a global program. However, when they look at the pricing in areas without supportive policy, it's not an attractive price. So they prefer to purchase staff in countries where there is some price gap element that helps to lower that.

Alasdair Whyte: 19:39

I think we're always discussing the sort of push mandates which tell you you have to have a certain amount by 2030 or 2050, and then you also have the pull from customers. Are you seeing enough customers who are prepared to pay extra?

Andreea Moyes: 19:59

on a voluntary basis, that demand is pretty limited. I mean, airlines are telling us in US which is one of these voluntary you called it pulled markets Airlines tell us they would like to buy SAF at conventional jet parity or at a very small premium. And even though we have a lot of incentives that almost close the gap completely with conventional jet, there's still a gap and it's higher than what airlines are willing to cover in terms of cost. So this is actually where partnerships with corporates come into help, because corporates are interested to pay for scope three mitigation and this is where book and claim schemes have been born and some airlines that started doing this a while back have more appetite for fuel in US because they have this additional contribution from their corporate customers. So we do see a big role for book and claim and corporates in closing the gap for the SAF premium so that airlines don't have to pay a high cost and so we can scale SAF in pull markets as well.

Alasdair Whyte: 21:20

And then in push markets like the EU, which is mandating how much SAF has to be used, do you worry that maybe it's not the most efficient way to use it? There's some airports where we see the odd flight. Then you've got other ones connected to major pipelines. You should probably get all of the SAF.

Andreea Moyes: 21:40

Yes, I mean physical book and claim is something that we've asked for in Europe to prevent high logistics costs from moving small quantities of SAF in all the airports, and it's very similar to how aviation works today, because I can't remember the exact numbers, but something like more than half of European volume goes through 10 airports or something like that. So this gives the industry a lot of efficiencies around costs because you do use the largest pipelines, the fastest and least costly ways to move fuel. But we do see European Union having a focus on developing access for SAF in all airports and eventually I think we will get there. But I think it makes sense at the beginning, when the blend mandates are quite low, to allow the industry to have efficiencies in logistics.

Alasdair Whyte: 22:43

Which does make sense, but it just shows how complicated lawmaking is.

Andreea Moyes: 22:48

Sure is.

Alasdair Whyte: 22:54

I know you don't be rude about your competitors, but do you think oil majors on the whole are doing enough in SAF?

Andreea Moyes: 23:03

I'm certainly proud of what BP is doing in this space. I think we've taken a very serious look at the problem. We're trying to solve the resources that we have available and we're working on all aspects for decarbonizing aviation. What are the pathways, what are the feedstock solutions, what's the technology? So I think other companies like BP are doing the same and perhaps once the policy is kind of locked and loaded, we're going to see more confidence to build projects. I think for the moment we're still emerging. I mean, the European Union just finalized their policy only this year, so we do require more policy clarity before we can see more scaling. But I do think that all the majors are taking this very seriously.

Alasdair Whyte: 24:06

I'm sure you've now got quite large numbers of people researching not just future feedstocks but also future technologies.

Andreea Moyes: 24:15

Yes, absolutely. We actually did that early on. When we created the aviation decarbonization and looked at participation options for BP, we saw that there are some technologies that are available and ready today for commercial scale, such as HEPA and potentially some alcohol to jet, but we have to work harder as an industry to leverage more scalable feedstocks such as biomass and renewable electricity through power to liquid.

Alasdair Whyte: 24:45

Do you think you'll be one of the first to set up a power to liquid or plant, or would you rather not be the first one and be maybe second?

Andreea Moyes: 24:58

Power to liquid isn't something new. There's already companies that do that for road fuels. So I think being the first is not necessarily a goal. I think being a company that delivers a successful commercial scale project is a worthy goal to have, because at the moment, a lot of companies are working on demo concepts, trying to see. There's many ways to do power to liquid there's more than one and so choosing the right one so you can have access to green hydrogen and reliable sources of carbon that's sustainable. So it's all about technology and where your feedstocks come from and where is your location. What's the supportive policy? There's just a lot of different things that you have to think about as you're creating one of these projects, and I think we're pretty advanced in thinking about these things, but I'm not sure if we're going to be the first or hopefully we're going to be early, one of the early ones.

Alasdair Whyte: 26:13

Is your star more to have five rather than just have one small pilot plant.

Andreea Moyes: 26:20

For power to liquid. Yes, I mean to be frank. When we were looking at the strategy for the sector, we didn't think eFuels was ready for this decade. We thought it was going to come later and so we had. Us and other colleagues in the industry had to come up to speed a bit faster when policy said you have to do eFuels right now. So still to be seen if we can deliver the commercial scale we need with eFuels in this decade and next more to come on that.

Alasdair Whyte: 27:00

If you're talking to someone who's got a new idea or starting up, you know who's got an idea for, or is taking, existing technology. What sort of advice would you give to them about the SAP industry? Do you think there's room for many different technologies and pathways?

Andreea Moyes: 27:16

Yes, absolutely. We need all technologies, all feedstocks. We need capital, we need talented people that are willing to take the risk and build projects. And I think the two big pillars that you're building your foundation on is you need to have the capital to build your project and also assurance that you're going to have cash flow that pays for the feedstock and operating costs once you have finished the project. Both of these components are very important. And then, in the middle, what technology you choose. Do you have secure feedstock? Do you have a good management team? All the usual things that one considers when they build a project.

Alasdair Whyte: 28:04

Is BP willing to invest in other companies?

Andreea Moyes: 28:09

Yes, we actually have a lot of examples. The new seed partnership we are very excited about and we think it's very important to develop not just technology but also feedstocks. So these are just a couple of examples in the SAP space. But we have large investments recently in EV charging and some other products.

Alasdair Whyte: 28:36

What advice would you give to other investors looking in the sector for the first time?

Andreea Moyes: 28:42

At the aviation sector or.

Alasdair Whyte: 28:44

SAP yeah.

Andreea Moyes: 28:46

I think the partnerships maybe is looking holistically at all the partnerships that you need to have in place in order for a project to be successful. So, securing all the components that I mentioned earlier the right technology feedstocks, telling who your customer is, what is your supportive policy, the financing partner I think these are the key pieces.

Alasdair Whyte: 29:17

If, at 10 years time, you had to pick a feedstock or a process that really excited you, what would you go for?

Andreea Moyes: 29:29

I mean HEPA is a really good, safe bet because you need relatively low CAPEX compared to some of these technologies that lighten up people's imagination. So I'd say definitely HEPA play. I think alcohol to jet is going to become more and more exciting because as ground fuels electrifies, there will be more ethanol available and looking for a home and that technology is also relatively lower CAPEX and plentiful feedstock, in the Americas at least, and I'd say, on the part liquid, probably methanol to jet because of the versatility that methanol gives in other sectors. So one of the things that we're very passionate about is to always have optionality across sectors and products to be able to optimize in function of feedstock availability and policy, responding to policy changes.

Alasdair Whyte: 30:35

Do you see BB converting more of its existing facilities from renewable diesel to SAF as ground transport demand falls?

Andreea Moyes: 30:48

It's a possibility, but hard to see it today because the policy for ground fuels is very well established and very successful. So it's not easy to switch capacity from renewable diesel to SAF today because there's the assurance of demand and the value of those products is very solid. I think we need to build a case for SAF in addition to renewable diesel, and certainly there will be some conversion in the future when the demand for ground fuels goes down.

Alasdair Whyte: 31:23

So it could be a nice boost in mid 2030s or 2040s. When you see the forecasts for the industry to hit net zero by 2050 and how important SAF is, are you confident there'll be enough supply?

Andreea Moyes: 31:43

So SAF has definitely a big role to play in decarbonizing the sector. Ayata has estimated that we need to reach net zero in 2050. We need at least 65% SAF, so there's no question that it needs to play a big role. I can't tell you if I'm, so we know where we need to get to in 2050. We know some of the things that have been committed for 2030, including BP's production. I'm not sure that as an industry, we have confidence that we're on track to reach the 2050 goals. A lot more technology development needs to happen between now and 2050 in order to get more confident that we're gonna be able to deliver. There's certainly enough on paper, in analysis, there's enough feedstock and potential for these technologies to deliver decarbonizing the sector, but it's very expensive and it's not very clear how we're paying for it yet.

Alasdair Whyte: 32:46

That's really interesting. So we can see up to 2030, maybe 2035, but it's when you need that commercialization to come in. That we're not sure about the economics is basically the issue.

Andreea Moyes: 32:59

Well, in countries where we have mandates, we have a clear pathway. There's no doubt about it. But that's just European Union and, to some extent, uk, although UK has still not released their final policy.

Alasdair Whyte: 33:14

It should have just stayed as part of the year. It would have been sort of if it had done.

Andreea Moyes: 33:18

Yeah, yeah, so it's. So this is not the world, it's just a very important part of the demand, but still there's large swaths of the aviation sector in other countries that don't have a clear path of getting from here to 2050. Yeah, okay, that's really interesting this is not just the economics.

Andreea Moyes: 33:45

You need the regulation to come first, Right right because we talked earlier how airlines on a pool basis, on a voluntary basis. Airlines don't have the appetite to pay a high premium and the cost for SAF is currently four to six times more expensive than conventional jet. So without supportive policy that gives us a way to pay for that premium, it's very hard to see how the world is going to generate enough demand to secure 65% of fuel as SAF in 2050. So policy is key. Policy is key to give us confidence to expand SAF capabilities and production. We're off to a good start, though. We're really excited about all the progress that's been done in the last three years in Europe, us, and I think we can build on this success and knowledge that we already have.

Alasdair Whyte: 34:39

So your optimistic that the industry will end 2050?

Andreea Moyes: 34:44

I'm not, I don't, I haven't thought about it, I think it's. We know that, even in our personal lives, the most important thing is to have a goal. If you don't have a goal, you don't know where you're heading. We have a goal, we know the tools that we have available to us to get there, and I think what we're asking for is more enthusiasm from the public and policymakers to help us get there.

Alasdair Whyte: 35:15

Yeah, that's great Because it's I've got lots of goals of. If I'd actually, I'd speak 20 languages by now if I met my goal. But you need those deadlines on the way, don't you? So the 2030 ones are actually very valuable.

Andreea Moyes: 35:29

Yes, I really love the roadmaps and the goal posts by decade because that gives us very good understanding of what we're working towards.

Alasdair Whyte: 35:40

What's your biggest frustration at work?

Andreea Moyes: 35:49

I really have to think about this. To be honest, this is the most exciting job I've had in my career. It's it's. There's so much new, creative, interesting stuff, interesting problems to solve. I rarely get frustrated. That's such a great answer.

Alasdair Whyte: 36:08

What's the best thing about your job?

Andreea Moyes: 36:12

I work with such diverse stakeholders our airline customers, my colleagues that work in technology incredibly smart people that can solve any problem really, if you, if you tell them exactly what you need and policymakers as we said earlier, they're all interested to help as well. Corporate customers, ngos, even I mean I. I really appreciate contribution from all of them. Oems are super involved and engaged with us. In fact, just last week we announced that we're doing Transatlantic SAF flight. That's gonna fly on 100% SAF and we're super excited to be one of the chosen suppliers for that activity. So we're very engaged with all the OEMs who are trying to expand the limits, the technological limits, and that's enabled us to to to bring even more SAF to the market. So I think that's that's it. For me. Most exciting is the diversity of thought and how everybody is aligned to to make this call possible.

Alasdair Whyte: 37:28

That's brilliant. Thank you so much for joining us. That was brilliant. Thank you very much, Andrea.

Andreea Moyes: 37:33

Thank you, al, thank you.