Kohei Yoshikawa & Satoko Arima on Decarbonizing the…

Introduction

KOHEI YOSHIKAWA (00:00):

I thought it's going to be a science fiction. And I also thought that it's going to be the technology in 2030s, 2040s. We need to have more social awareness.

ANNA STUKAS (00:13):

ANA has chosen to take action and I think that's incredibly bold and brave.

SATOKO ARIMA (00:19):

If you look into it: We have a solution, so let's make a difference.

ANNA STUKAS (00:34):

Hi, my name is Anna Stukas. I'm a vice president of business development at Carbon Engineering. We're a Canadian-based climate solutions provider developing direct air capture technology. I'm here today in Tokyo at the headquarters of All Nippon Airways (ANA) where I'm joined by two members of ANA’s decarbonization team in their corporate planning department. Mr. Kohei Yoshikawa, who's a director in the decarbonization team, and Ms. Satoko Arima, who's an assistant manager on the team. We're here today to talk about some of the challenges and opportunities faced in decarbonizing aviation and how Direct Air Capture can play a role in helping aviation to reach net zero. We know that the aviation sector is incredibly challenging to decarbonize. Can you speak to part of what makes it so hard to decarbonize?

SATOKO ARIMA (01:28):

So this industry is in one of the hard to abate sectors. You can see that we and also other airlines already started focusing on creating the strategy to decarbonize and then challenging to the climate solutions.

Why ANA is Taking Action

ANNA STUKAS (01:50):

I've always found ANA’s portfolio approach to be particularly inspiring, recognizing how all of the different pieces come together, your combinations of investments in efficiency together with sustainable aviation fuel and then recognizing that there will still be residual emissions. And the leadership that you have shown and chosen to use direct air capture to sequestration or carbon removal to address your residual emissions, I think is tremendous. Your 2050 plan highlights that you will need removals to counterbalance your residual emissions. Can you speak to what made you decide to take action today?

KOHEI YOSHIKAWA (02:38):

I understand that there's no silver bullet in decarbonizing aviation. My previous role was in the jet fuel procurement part of our company and I spent so many years in introducing SAF into a regular operation and as we go deeper into the characteristics of sustainable aviation fuel, we realize that there is always going to be a residual emissions. So I think it's going to be a flip side of the same coin. And even though we replace a hundred percent of our jet fuel with sustainable aviation fuel, there is always residual emissions. So just like you mentioned to counterbalance that residual emission, we would definitely need negative emissions technologies, which is reflected in our decarbonization transition strategy. And the reason why we need to start today is that it's like a cross sector collaboration, which is outside of the aviation industry, which is going to take some time to build momentum. And also we understand it is really going to take time to research and develop new technologies. Think about 2050 is going to be, I can say we have 27 years more, but the same time we can say we only have 27 years. So there is a need to stop and think about it, and to take action today.

Weighing Risk & Opportunity

ANNA STUKAS (04:04):

That's fantastic and thank you for taking action today. When you think about your decarbonization strategy, and I know a released their midterm environmental plan that had to respond to the changes in IKO and the CORSEA regulations. Can you speak to—between now and 2050—how are you weighing the different risks and opportunities of your transition plan?

SATOKO ARIMA (04:33):

The biggest challenge for us is to balance the two conflict elements, we believe. The one is as an operator of aircraft, we like to expand our network. And on the other hand we would like to curve the CO2 emissions. So these two elements are pretty much conflicting. By 2030, as our corporate strategy, we will reduce more than 10% emissions on both international and domestic flights. The public sector and private sector should be working very closely, which we are doing right now, for example, to make the domestic SAF production as well. Yeah. And our domestic SAF production has been on the plan right now and we are expecting 10% of SAF will be delivered by 2030. And also looking at overseas, for example, in the United States’ case, they have multiple options for supporting the industry and then also the new technology companies like yourself and 1PointFive, for example, like DOE DAC have a grant and also the Inflation Reduction Act (IRA), those supports will be necessary, I believe to continue our journey to decarbonization.

ANNA STUKAS (06:21):

Absolutely. You really need the combination of the supportive environment in order to commercialize these new technologies together with leading customers like yourselves who are showing that there is a market demand.

KOHEI YOSHIKAWA (06:42):

In my own words, the challenges, no, the opportunities are we have powerful partners like 1PointFive and Carbon Engineering who are willing to support our decarbonization journeys towards 2030 and 2050. And as we previously mentioned, the decarbonization in aviation sector can only be done through a combination of different measures. And we, for our own airport, we have been doing our best to minimize the use of our aircraft jet fuel during our regular operations. And we're encouraging our pilots not to use extra fuel during the flight as long as the safety permits. And also we have been very active in introducing low carbon fuels such as sustainable aviation fuel. But the only missing part was the countermeasure towards the residual emissions. So now we're very happy to have this solution coming from 1PointFive and Carbon Engineering. And the risks we are recognizing are that we need to have more social awareness of various technologies. We spent a lot of energy in promoting new type of fuel—which is sustainable aviation fuel—in our home market. So before we introduced this new type of jet fuel, almost nobody was aware that the technology is there. So I think it is airline's role to make a big voice and raise the social awareness of new technologies. And also we tell our valued customers that we have solutions to tackle with the climate challenges.

ANNA STUKAS (08:33):

I can see how that would be very important. I know as someone who gets on an airplane myself, I'm very cognizant of my desire for needing to be in different places in the world or wanting to be connected with my family. I want to be able to do so in an environmentally responsible manner. And I think investments like ANA has made go a long way to helping passengers to feel that they are making a positive difference while they're flying.

KOHEI YOSHIKAWA (09:06):

Yes. So I would say that our role is to realize our corporate vision uniting the world in wonder by promoting decarbonization. And in the past few years, safety and health is our top priority that is delivered to our customer. But now the pandemic is over, phasing out, and the next challenge is to how to tackle with climate change and how to prove that aviation industry have the solution to work on this huge topic.

ANNA STUKAS (09:43):

I love that focus on solutions. It's easy to get discouraged if we only think about the problems, but to be able to present solutions I think is very powerful.

KOHEI YOSHIKAWA (09:55):

Yes, we're proud that we're connecting people and we are connecting goods that needs to be delivered and we cannot give up our mission to continue this role. And to do that we need solution that can actually work towards our climate challenges.

Sustainable Aviation Fuel

ANNA STUKAS (10:14):

I know one of the challenges with sustainable aviation fuel is the ability to scale it and to find the right feedstocks for it. I know one of the future feedstocks for sustainable aviation fuel could be atmospheric carbon dioxide. Could you speak to how you might see those investments being complementary? How you can invest in carbon removals today as a way of growing your feed stock for sustainable aviation fuel for tomorrow?

KOHEI YOSHIKAWA (10:46):

Through the realization of carbon recycling model, I think it's going to be really important to reutilize the carbon to our source of energy. So of course Direct Air Capture technology can work to directly reduce our emissions, also can help to provide our future energy.

ANNA STUKAS (11:13):

Can you share what is ANA’s future promise?

KOHEI YOSHIKAWA (11:16):

Our action is closely aligned with our corporate management vision, which is uniting the world in wonder. And to do that, I think we'll have to develop our business in an environmentally friendly manner so that we can meet the requirement from our valued customers and the requirements from society.

ANNA STUKAS (11:38):

One of the things that we often hear from airlines is that they are waiting to see SAF production come online. ANA has chosen to take action and I think that's incredibly bold and brave. Can you speak to why it's so important for ANA to take action today rather than simply waiting for solutions to become available?

SATOKO ARIMA (12:01):

So of course stuff is very important for us for the longer term commitment and we are also working on the expanding the SAF production in Japan as well. But we need to focus on other things that we can do right now. So one of the options was direct capture, like negative emission technologies. So as we explained, the portfolio for decarbonization is very important. We do not have one solution. That's why while we are working on SAF production encouragement, we are also taking action for creating and exploring the multiple options to decarbonize. So that's what we are doing right now.

Partnering With 1PointFive

ANNA STUKAS (12:56):

And can you speak about what drew you to carbon removal from Direct Air Capture technology as part of your portfolio?

KOHEI YOSHIKAWA (13:16):

So I recognize that there are various project in the carbon credit market, but what we wanted is a touch of the project. What we value is the permanency of the carbon removals project and also the scalability that fits with the size of our appetite in the decarbonization future in aviation industry and also the transparency. So we have that kind of certain criteria for selecting the technologies and Direct Air Capture technology was the perfect solution to meet all of these three criteria we require.

ANNA STUKAS (13:56):

Can you tell us a little bit about what your biggest learnings were in the process of buying carbon removal? It's not like buying jet fuel, which is something that airlines do every day. It's not something that's tangible. Can you tell us about what you learned from buying carbon removal?

SATOKO ARIMA (14:15):

With showing our partnership with 1PointFive and Carbon Engineering, yourself, we can show the world and also the industry that we have solution. So even though it's set to have limited solutions, however, if you look into it, we have a solution. So let's make a difference.

KOHEI YOSHIKAWA (14:40):

Everything about what we have discussed already between Carbon Engineering, 1PointFive, and ANA was a learning curve. And of course sustainable aviation fuel is part of jet fuel, where we have knowledge already. But Direct Air Capture is a totally new technology to us. So when we firstly heard the concept of Direct Air Capture, to be very frankly, I thought it's going to be a science fiction. And I also think thought that it's going to be the technology in 2030s, 2040s. But when we first visited your R&D facility in Squamish, I thought it's the technology available today. So that was the biggest finding for myself personally.

ANNA STUKAS (15:24):

Wonderful. And we're so glad that you had a chance to come and visit in Squamish. I know ANA doesn't buy anything they haven't seen.

KOHEI YOSHIKAWA (15:32):

Yeah, that's our policy.

Leading On Climate Solutions

ANNA STUKAS (15:34):

I think what I hear from you is that for an airline to have a leadership position in the world and to continue to grow and to connect your customers, it's critically important to also have climate solutions. Am I getting that right?

KOHEI YOSHIKAWA (15:50):

Yeah, exactly. And I can say what we are selling is not the air ticket. What we are delivering is innovation and the new style in travel experiences and challenging something new is at the core of our company spirit. And as you might recall, we were the first airline that introduced next generation aircraft, which is Boeing 787 here. And also in the old days, we were the first airline that we introduced in-flight TV program in the aircraft in the world. So challenging something new is a very exciting one and that fits with our company culture. And now I'm very pleased to have the new technology in this climate challenges space and I'm very proud to have Direct Air Capture in our portfolio today.

ANNA STUKAS (16:49):

Thank you so much for joining me today. It's such a pleasure to be here with you.