The Role of DAC in Aviation
Anna Stewart (00:02):
Clearly, sustainable aviation fuel is a huge part—the lion's share really, of the emissions reduction solution over the coming years. But it's not the only answer. And there will need to be other ways to reduce emissions. And I'm very curious about this technology. It's not something I know a huge amount about. And I actually have a cheat sheet of acronyms. You may not, so I will help you if you don't know all of these.
Anna Stewart (00:28):
CDR, DAC, DAC is Direct Air Carbon Capture, unless I'm wrong, which is a subset of CDR. Anna, why don't you kick us off. And actually, sorry, let me introduce our panelists. We have Anna Stukas in the middle, VP of Strategic Partnerships, 1PointFive. We have Lee Beck on the end here who's from an NGO, Senior Director of Europe and Middle East at Clean Air Task Force.
Anna Stewart (00:50):
And we have Lars Kroeplin, Senior Director of Corporate Responsibility Strategy at Lufthansa. But, Anna, you're the one I want to start with because I'd like you to just run us through how DAC works and what makes this in your mind a good solution.
Anna Stukas (01:07):
So Direct Air Capture very simply is taking carbon out of the air. And once we've got it, we concentrate it, and then we can put it safely and securely deep underground. As the video said, we could also take that atmospheric carbon, combine it with clean hydrogen to make Sustainable Aviation Fuel. So it's got a dual-pronged role there.
Anna Stukas (01:30):
But today it's far more cost-effective to take the carbon out of the air, to put it safely and securely deep underground. That essentially gives you a negative emission. So if we think about net zero, you've got one emission left over after you've done all of your reductions. Then you have a negative one because one plus zero doesn't equal zero.
Anna Stukas (01:54):
One plus zero still equals one. So very simply we're providing the negative one that you need to get to net zero.
Anna Stewart (02:02):
And what are the limitations of this?
Anna Stukas (02:04):
So the atmosphere is a virtually unlimited feedstock. We have plenty of carbon dioxide in the atmosphere. And it's available just about uniformly everywhere around the world. So when we think about feedstock limitations, we think: Do we have enough energy to power the process? It's critically important that we use renewable or non-emitting sources of power to provide the electricity inputs.
Anna Stukas (02:32):
There's… I think I've heard an anecdote. It's on the USDA website. Something like enough solar energy hits the surface of the United States in the course of one hour to power the economy for a year. The challenge is, how do you get those green electrons into being useful molecules? How do you get them in the right place at the right time?
Anna Stukas (02:52):
So we need renewable electricity and then we need the right rocks. I actually brought one, just in case anybody wanted to see. We get a lot—
Anna Stewart (03:01):
I’d love to see this rock. Thank you very much.
Anna Stukas (03:01):
Yeah. So we get a lot of people thinking that when you're putting the CO2 underground, that it's going into a big, giant underground cavern, that you're sort of blowing up like a balloon. But in fact, what you're doing is you're putting the carbon into rock just like that—that comes from our first project in Texas—with teeny tiny holes in it.
Anna Stukas (03:19):
There's tiny little holes in it. And if you were to take the water from your glass and pour it on to there, the water would absorb into those teeny tiny holes. And the CO2 basically does the exact same thing as that when you put it underground.
Anna Stewart (03:33):
Okay, so this sounds fantastic, magic, but I want to have a bit of a fact check from Lee over here. How supportive would you be of this sort of technology versus others? How durable is it when we start talking about offsets? You know, the my—you can't help it but feel a little bit skeptical, planting trees, etc., etc..
Lee Beck (03:53):
Yeah, thanks. I think first of all, optionality in solutions is really, really important. The last panel showed us that there's true scalability and economic limits to most solutions. And you know, when we look at these models like this climate perfectionism, oh we have these wedges and everything's going to work out fine. 2050 net zero all clear. And I think what we're missing is that the transition is extremely hard.
Lee Beck (04:18):
I think that again, the debate just showed how hard it is. And we're likely to run into risks and scalability limitations of all solutions over time. So we need as many as possible to reduce overall risk. And CDR is such a solution set. I think that carbon dioxide removal on a technological scale, CO2 storage has been proven for over 60 years.
Lee Beck (04:41):
It's safe. There's abundance of storage availability versus, say, looking at tree planting is a good example, like offsets really not defined. That gives you, you know, not as much certainty, not as much durability, permanence. And so what DAC offers over other forms of carbon removal is really that tonne for tonne reduction. But I think what we want to see is it scaled as soon as possible, especially as governments are providing incentives, the industry has to show that it can be done and that it can be done safely, and we can bring down the cost.
Why Lufthansa is Buying Now
Anna Stewart (05:20):
And we will move, I think, to issues of certification going forward. But first, let's go to you, Lars, because Lufthansa is fairly new to buying these sorts of credits. Walk us through what the delay was and why you've decided to take the plunge now.
Lars Kroeplin (05:37):
Yeah, I wouldn't say it's a delay. I mean, it's a developing story as we call it at CNN because this is the next level of technology. And let me try to build a bridge a little bit also from yesterday's CEO panel. Two of the four CEOs clearly made the point that sustainability is central to their leadership, to the organizations.
Lars Kroeplin (05:57):
When I say and of course, Scott from United. So when you take the series sustainability and you do a plan for your organization, you quickly come up with something that adds to Richard's headache. Because there are even in 2050, when we all want to be carbon neutral, there's a significant amount of residual emissions from fossil fuels remaining for our industry.
Lars Kroeplin (06:20):
And this is— IATA has a fact sheet on this, for, for offsets. It says up to 19%. This is more than other industries have. So basically, to meet carbon neutrality in 2050, we will need this reliable, long term, durability offsetting more than other industries. So if you make your plan, you need to bring up this topic in your planning.
Lars Kroeplin (06:51):
And this is what we've done, because we have our SBTi certification out. And of course you are looking at the long term, how can you achieve the Paris targets.
Anna Stewart (06:59):
And how does this balance out with sort of how much SAF you're investing in and your sort of offset credits?
Lars Kroeplin (07:07):
Well, it balances out in a way that I guess what the, the letter, discussion showed that SAF is, of course, one of the main solutions because it is real reduction. There is not new CO2 emitted. So this has to be the priority, of course, of the industry. But as, as Lee already said, there are a number of levers and we should have them all in our hands for now.
Lars Kroeplin (07:32):
And not knowing how the single methods or solutions will develop over time.
Anna Stewart (07:38):
When we look at DAC—not D-A-C, I knew I was getting it wrong—When we look at DAC, this can feed back into SAF reduction. So actually it feels like a bit of a no brainer in that sense.
Anna Stukas (07:51):
We think so. Although we, you know, we're biased. We're the ones making it, but it's an incredibly versatile tool. It allows us to create those real, measurable carbon removals today. As Lee said, we quite literally put a flow meter on the front end of our process that measures exactly how many molecules of carbon we've pulled out of the atmosphere.
Anna Stukas (08:14):
We put a flow meter on the wellhead where we're putting the CO2 underground. We can measure exactly how much CO2 is going underground, and it's that very versatile tool. Today, it isn't cost effective to make SAF from Direct Air Capture from the atmospheric CO2. Costs about twice as much to make SAF out of it than it does to put it underground.
Anna Stukas (08:37):
So today, investing in carbon removals helps us to scale up that feedstock for SAF in the future, but doing so in a way that is economically viable today.
Anna Stewart (08:47):
So it doesn't make sense yet?
Anna Stukas (08:49):
Not yet.
Anna Stewart (08:49):
When will it?
Anna Stukas (08:51):
When the cost of clean hydrogen comes down.
Anna Stewart (08:55):
Ah. That's a whole other discussion, isn’t it?
Anna Stukas (08:57):
We can park that one.
Anna Stewart (08:58):
But okay, then if we take this as potentially a future feedstock for SAF, should aviation have priority when it comes to DAC credits, DAC technology?
Lee Beck (09:13):
Well, I mean, I think that comes down to how the entire energy system is developing its decarbonization options. I think one huge question about aviation is, this sector is still growing. The majority of people have not been on a plane. Right. And so as other sectors in transportation decarbonize, aviation’s share information will grow and the pressure on the industry will grow.
Lee Beck (09:40):
And so I think as we're scaling DAC and fuels there will be huge competition for these solutions. From a scalability perspective, our analysis actually showed if you're kind of putting all the solutions together in future scenarios, you're really hitting the limits of overall fuel availability. Plus, of course, you have, you know, SAF, everyone's talking about SAF.
Lee Beck (10:06):
It's really not clear what it is. Is it e-fuels? Is it by biofuels? Is it? You know, this is a huge thing that I'd like to see defined with the help of the industry and government. But it's really you're really hitting the limits of overall fuel, clean fuel availability for the entire transportation sector. So I think there's huge questions.
Lee Beck (10:26):
And future competition for these solutions from a scalability perspective.
Certification, Trust, and Industry Adoption
Anna Stewart (10:31):
Now, as we mentioned, the ETS, CORASIA, all of the fun, um, bodies in the last panel, you're buying CDR credits, does that work within CORSIA and the ETS? Is it certified? Is it recognized?
Lars Kroeplin (10:48):
For CORSIA it will be recognizable, for the ETS it's not right now. They're working on it. But as I said earlier, the topic of carbon removal. So especially these very technical and high reliability ones, is still very much developing. It's not on the—It's not really in everybody's mind, let's say. So this is—I also I'm grateful that IATA brought it up to the stage today, because I guess we were so caught up in the SAF discussion that we left the residual emissions a little out of sight.
Lars Kroeplin (11:22):
So this is now the next step we need to do.
Anna Stewart (11:24):
How many airlines are actually investing in these credits at the moment? Are you one of a handful?
Lars Kroeplin (11:30):
I would think it's a handful, yeah.
Anna Stewart (11:31):
And what will it take for more airlines, Ana, do you think, to become more interested? Is it going to be once this is certified by the ETS, for example.
Anna Stukas (11:42):
So we've definitely seen slightly more than a handful of aviation leaders on three continents so far lean in and choose to purchase carbon removals from Direct Air Capture. We've seen tremendous support. And, you know, to Lee's point about will the aviation sector or should the aviation sector get priority? I think it's really telling that the aviation sector has really leaned in and taken a leadership role right next to sort of the tech sector in terms of advance purchases and advance market commitments for carbon removal.
Anna Stukas (12:15):
And, you know, stepping in early is one of those ways of securing future supply. So that piece is really critical. I think in order to see this go from dipping your toe in the water to a broader part of a compliance strategy, there are a few things that need to happen. First of all, we've got CORSIA eligibility.
Anna Stukas (12:39):
That is pretty much sorted. So we envision that—
Anna Stewart (12:46):
Was that easy?
Anna Stukas (12:48):
No. But if it was easy, it would be boring. Nothing about the aviation sector is easy. If putting people into a tiny metal tube and hurtling them off of the surface of the earth was easy, you know—It is hard. But that's what makes it rewarding. That's what makes it meaningful. So we've gotten a pathway for Direct Air Capture to sequestration to be approved as a CORSIA eligible emission unit.
Anna Stukas (13:15):
That's table stakes. In order to see broader penetration, I think the first thing we need is awareness and a recognition that, you know, the IATA net zero road maps call for 500 million tonnes of carbon removal in 2050. We can't just snap our fingers in 2049 and magically have a $500 billion industry appear. You have to start that investment today, and you have to start low and then grow over time.
Anna Stukas (13:41):
In order for that to be done in a way that is viable for the industry to adopt. The other thing that we need is customer understanding and acceptance of what it is that airlines are doing, and that this is something that they should be supporting and getting on board with. That this is something that is very clear, that provides a measurable benefit.
Anna Stukas (14:07):
And is a high integrity solution, and having that public acceptance, I think, will be critical to— not to put words in Lars’ mouth, I think we should have Lars talk about what he needs to see. But, you know, you need that knowledge that this is going to be something that when you deliver a package that says to your customers, “we've combined sustainable aviation fuel, lower carbon aviation fuel, if you happen to be here, and carbon removals together,” that that's something that when you offer it to your customers that your customers are going to be happy with.
Clarity in Messaging
Anna Stewart (14:43):
Lee, let's pick up on some nice points. First of all, the message. Has it been clear enough to this industry that this is a solution that needs to be invested in? And secondly, what would you say about the certification process? What needs to happen there for this to become an easier sell to airlines?
Lee Beck (15:03):
I think the message from whom? Right. I think there is availability of the technology despite not at scale, at the scale needed, 500 million is 500 times of what you're building in Texas right now. But I think from governments, you know, there could be a better understanding of the overall solution set for, aviation decarbonization and a more optionality based, policy approach, because I think what we're getting stuck in is a lot of fuel discussions, but the fuels are actually still combusted, so there's still CO2 emissions.
Lee Beck (15:39):
And then there's this confusion about residual emissions versus tonne per tonne. So I think there is there can be a clearer message to the industry. And what also needs to be sorted out, I think who can pay for what and what could be a sustainable business model, thinking about customer segmentation and price sensitivity. And when I'm thinking about airline tickets, I think, on the second question, which was certification.
Lee Beck (16:09):
Certification. Yeah, yeah, I think right now, there's different carbon removal or voluntary carbon markets, which are honestly all over the place. I think, from our perspective, we're excited to see that the European Union is really taking a stab at a gold standard. The CRCF, that then could potentially lead to global harmonization. I think that's what we'd like to see.
Lee Beck (16:32):
So to make it easier, because right now you're really, really confused. And you're also, it could be that, you know, trees could be just as valuable as DAC offsets. And obviously they're not the same. Right? So I think there is much more clarity needed. And a much bigger push as soon as possible to have global harmonization and also make sure that these markets create public trust via integrity and also limit, you know, dual count, double counting, things like this.
Anna Stewart (17:01):
So much of this is about trust. What would you say to airlines who are contemplating buying into this?
Lars Kroeplin (17:10):
Well, I think the why we invested now, you asked for earlier. And let me elaborate a little bit more on this. So the first thing is when you look at a holistic decarbonization strategy, you will not it will not work without having removals at the end for the remaining emissions. And they are significant, as I said earlier. The second thing is very much what was said earlier.
Lars Kroeplin (17:36):
We are in a similar situation, like SAF, the technology is there, but as the International Energy Association said, 65%, I think, they said of all the technical solutions we need to decarbonize are not viable on an economic way right now. So we need to scale. And you need to start early to scale. It’s similar to SAF, because, if you don't build a market, how will it ever work?
Lars Kroeplin (18:03):
There has, of course, more to it. There's more to building a market than just the demand. There’s also, of course, the government, government support. So much of what was discussed earlier. So but we decided to start building that market and show demand and to hopefully then also ignite more and more and more building of these plans.
Lars Kroeplin (18:24):
And then this the third thing that I also feel very important it is you need to bring these new technologies from and, potential too to a reality. And this is what we learned at Lufthansa Group very much from SAF. We were an early adopter. We were trying to bring it into the market also publicly, to single tickets.
Lars Kroeplin (18:46):
Every customer can be part of that SAF journey. And this makes SAF very tangible in a way of not, of course, not tangible in ways you can touch it. But is it very tangible for our internal colleagues as much as our customers. So there's a bunch of SAF coming up River Rhine each week now. And so for us, it is a reality.
Lars Kroeplin (19:07):
Is it the major part of our fuels today? No, but it's a reality. And people work differently in a reality than in something that could happen, maybe in whenever, whatever amount of years. And this is what we also try to, to build now, this same moment, we try to build within our company on CDRs.
Anna Stewart (19:23):
I'm curious what you said about kind of creating a market, because I think it was Scott Kirby yesterday in the CEO panel who spoke about how we shouldn't be so worried about SAF, because look at wind, look at solar, people were worried that these technologies would never take off. They were too expensive. But markets were created largely through the support of government.
Government Support and Market Growth for DAC
Anna Stewart (19:42):
So is this something that you would like to see, Anna, is more government support to help get this technology off the ground?
Anna Stukas (19:50):
I think you'll see a lot of similarities to the SAF discussion from earlier. You need a combination of carrots and sticks. We're very lucky that as part of the Inflation Reduction Act in the United States, significant incentives were added for Direct Air Capture to sequestration. That's part of what's helping us to unlock our projects in the United States.
Anna Stukas (20:10):
So our first commercial project is targeted to capture 500,000 tonnes of carbon from the air every single year. We have subsequent plans to deploy future plants, down in the south of Texas. That was one of the plants that was selected as part of the US Department of Energy's DAC Hubs program. So that government support is absolutely critical to getting those early plants off of the line.
Anna Stukas (20:35):
Because just like with wind and solar, the first time you do something, it's always going to cost more. It's not unique to sustainability solutions. It's, you know, the first airplane cost more. So we need to build the first few plants. We need to get on with it. We're super excited. If I was allowed slides, you would have a picture of our plant, being constructed right behind us right now to show you that this is real.
Anna Stukas (21:01):
We've got over $1 billion of steel going into the ground right now. This is actually happening. And a big part of why it's happening is that that government support and incentives, we also then need to see performance-based policies that start low, grow slow, so that you aren't imposing undue targets that the industry can't meet, that recognize the role that durable carbon removals that can store carbon on geologic time scales to counterbalance our fossil emissions has to play alongside low carbon fuels, whether it's SAF or LCAF or anything else.
Anna Stukas (21:40):
Pick your acronym. So they're very complementary solutions. We need both of them. And we're starting to see nascent policies like the low carbon fuel standards in California and British Columbia that were referenced on the opening panel yesterday. They're starting. We're seeing that happen. We're seeing the U.S. Department of Energy with their procurement announcement for carbon removal starting to set the standard for what good looks like.
Anna Stukas (22:09):
I think that that's a really key point in terms of building that trust to be able to say it's not just an airline who's decided that this looks good. This is also, you know, the US government, the Canadian government is developing a federal protocol for Direct Air Capture to sequestration. We've got the CRCF and the EU all starting to set that standard for what good looks like and then create the demand that complements the incentives.
Anna Stukas (22:33):
So that we can go forward and deploy this at large scale.
Anna Stewart (22:36):
It's bold and exciting beginnings. And I'm sorry we couldn't show your slides, but thank you very much for bringing this rock. And if anyone would like to admire it in the coffee break, I'm going to give it back to you. You know where to go and see it. Thank you very much for all of your insights. I feel like I've learned a lot, particularly in this session, and I hope all of you have done to.
Anna Stewart (22:54):
And I hand it back to Anita, because I believe it might be time for a little break.
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