The Letters of (Low Carbon) Transit: business aviation and World Energy pard’ner up, via book & claim

From Houston and elsewhere, Davos-attenders and others news has arrived that World Fuel Services and World Energy have a World Economic Forum Sustainable Aviation Fuel Program designed to increase SAF availability and supply chain efficiency within the industry.

The program will be available in time for business jets traveling to the 50th Annual Meeting of the WEF to enable lower carbon emissions of flights departing from Jet Aviation’s facilities at Teterboro (TEB), Boston/Bedford (BED) or Dulles International (IAD) to Davos, Switzerland, for the January 2020 event.

SkyNRG is also now into the act, and explained:

How it works…

Set your ambition

Based on your leadership’s carbon footprint and your ambition level, we determine what SAF volume you want to commit to.

Sign up

You sign-up for a single offtake of SAF and absorb the respective premium (i.e. the price difference between fossil and SAF).

Source & deliver

For the annual meeting of the World Economic Forum we source the SAF volume from World Energy, we guarantee sustainability, and deliver it to a nearby airport to maximize your impact, optimizing sustainability of the supply chain and cost- effectiveness.

Fly & claim

An independent, third party auditor verifies the delivery and claims, and we provide you with a sustainability certificate to claim your carbon neutral flight.

Although Jet Aviation does not physically offer SAF at TEB, BED or IAD, the WEF SAF Program allows fuel consumers at those locations to opt-in and claim SAF environmental benefits. Under the program, for each gallon of conventional fuel purchased at TEB, BED or IAD, an equivalent amount of conventional fuel will be replaced with SAF on flights departing from Jet Aviation’s Van Nuys (VNY) location in California.

World Fuel Services and World Energy believe that the launch of the WEF SAF Program with Jet Aviation is another step forward in increasing the aviation industry’s access to low-carbon fuel and creating greater efficiencies in the distribution of SAF. World Fuel Services and World Energy expect to work with other strategic partners to expand the program to address the growing demand for cleaner-burning, low-carbon aviation fuels.

“World Energy is on a mission to expand access to new and innovative ways to drive change toward a lower-carbon future. We are excited about expanding our collaboration with World Fuel Services to provide ever-increasing access to sustainable aviation fuel,” said Bryan Sherbacow, chief commercial officer of World Energy. “This process expands access to the benefits of SAF with maximum efficiency.”

The Book & Claim

You may have heard of this mechanism from the world of renewable natural gas, wind and solar and the way we account for low-carbon energy — if you buy a “renewable energy” package from your local power company, it doesn’t mean that they are actually supplying the precise electrons fed off a solar or wind project, into your home.

The electrons are fed into the system and accounted for at the point of entry on the gird (the “book”), and you use electrons in your home or office which are regarded as renewable because your payment caused the renewable electrons to be generated (“the claim”).

But, it’s easier to understand than that, because book & claim is the system we use to move money around the world to pay our bills.

For example, I deposit one hundred dollars in cash at my local bank, then I write a $100 check to a supplier, and they cash the check and receive $100 in cash. But they don’t receive the five twenty dollar bills I deposited. They just get five twenties at random, and the cash withdrawal is deducted from my account at settlement. When I made my deposit, my dollars were accounted for at the point of entry into the money system (“the book”), and when my supplier cashed my check it was deducted against my ledger, not someone else’s (“the claim”).

Why book & claim is useful

Infrastructure is expensive and setting up supply-chains for very small airfields is even more expensive, and small companies have to prioritize to service the bigger airports, first. So, it might be years before every general aviation airfield has reliable, affordable renewable fuel supply at the pump next to each runway.

There’s a deep dive into the science of Book & Claim that came out in Energy Policy just the other day — you can read all about it here.

Also, when United Airlines buys a million gallons of renewable fuel, it’s loaded along with fossil fuels, in a blend, at an airport tank farm. An individual United Airlines flight would only use those exact renewable molecules if we happened to load the fuels right at the wing, which might happen for demonstration or inaugural flight, but is not business as usual for airlines. So, we use Book & Claim.

Book and claim solves the problem. The order at, say, the Boston airfield causes the renewable fuel gallon to be purchased and pumped in Van Nuys. So, the order for a low-carbon fuel is causing a low-carbon fuel to be loaded on an aircraft somewhere in the aviation system (“the book”), and the credit for causing that reduction in carbon is awarded to the company that ordered to fuel not the one who happened to consume the fuel (“the claim”).

Why book & claim of renewable fuels is superior to indirect offsets

You’ve heard about offsetting, of course. Usually, a small money payment is made to “pay” for the carbon you are using, and that money, so goes the theory, pays to generate renewable electrons or gallons somewhere else in the system. It’s very similar in some ways to Book & Claim, because an offset is credited to a purchaser (“the claim”), even though the actual fuel or power might be used somewhere else by someone else because it was more efficient to add the fuel or power at some other entry point into the energy supply (“the book”).

Similar, yes, but different in one vital respect. That is, Offsets vs Book & Claim.

Book & Claim generally refers to like-for-like — a renewable fuel gallon is booked here, claimed there, but it’s all renewable fuel. Offsets can be unlike-for-like — a renewable power gigawatt is booked here, but claimed against an aviation offset credit purchaser there, for example, When the purchaser pays to offset a fossil fuel gallon of aviation fuel, the offset money could be used to create solar power in Burundi.

Why’s that a problem?

In two words, Potemkin Power, a concept borrowed from the Potemkin Villages of the Soviet Era, show villages that were not actually constructed to house people but rather to fool foreign visitors into thinking that Soviet Russia was a worker’s paradise.

How does Potemkin Power work, exactly?

Well, say we have a cheap option to erect solar power in, say, Burundi. Maybe Burundi doesn’t have a way to distribute that power. Or, maybe this represents new power generation for Burundi rather than replacing, say, a coal-fired power plant.

In either case, we are adding renewable power capacity to the system without taking out fossil power. It sounds like we are offsetting power but in fact we are generating more of it.

Potemkin power schemes have the ability to chew up dollars for power gen that doesn’t actually reduce the demand for fossil energy, so it doesn’t decarbonize society. Not that there’s anything wrong with adding solar power in Burundi, the people desperately need more power and a workable grid to lift themselves out of poverty. It just isn’t an offset.

Book & Claim avoids this

Because Book & Claim is like-for-like, there’s never a case where we are generating extra energy capacity on the system. We are simply replacing physical fossil gallon with a low-carbon one, but we are doing the reduction in a different place than where the order was received.

Just as modern supply logistics tell us it is right to do. McDonald’s hamburger patties and french fries are not actually made from scratch at each location. I might order a pizza from my app at home, have it sent to a second location, while it is baked at a third location from ingredients supplied from multiple other locations. It’s in our interest to have sophisticated supply chains that allow us to satiate demand here with supply there.

But like for like assures us that we are actually de-carbonizing, while offset schemes assure us that we might be de-carbonizing, but we might not.

The Bottom Line

We hope to see more of Book & Claim and we hope that there emerges a better name for them, and one might be Assured Offsets, compared to Unassured Offsets which would be the traditional offsets. AO vs UO — a subject that will be part of an ongoing debate.

But there’s absolutely great news in the idea that business travelers heading for Davos will be able to support de-carbonization even if they are not flying out of the Van Nuys Airport.

Van Nuys? That was the actual film location for the final scene in Casablanca, when Rick sent Ilsa off with Victor Laszlo to fight for the betterment of the world. We’d like to think that, had he been able, Laszlo would have opted for renewable fuels on his flight to Lisbon, there to catch the Clipper to America to carry on his struggle against fascism.

But Laszlo needed a little indirect help to do so.

RICK
We’ll always have Paris. We didn’t have, we’d lost it, until you came to Casablanca. We got it back last night.

ILSA
And I said I would never leave you.

RICK
And you never will. But I’ve got a job to do, too. Where I’m going you can’t follow. What I’ve got to do you can’t be any part of. Ilsa, I’m no good at being noble, but it doesn’t take much to see that the problems of three little people don’t amount to a hill of beans in this crazy world. Someday you’ll understand that. Now, now… Here’s looking at you, kid.

So, a little bit of Book & Claim there, too. Ilsa says she’ll never leave Rick (“The book”), and yet she heads off with Laszlo (“the claim”), knowing that she had Rick’s approval, as Rick & Captain Renault head off to fight Vichy in their own way.

As Rick observed, “Louis, I think this is the beginning of a beautiful friendship”, and this friendship between World Energy and the business aviation sector might prove to be as enduring and influential as that classic film.

Indirectly speaking.