Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
The energy conversation is personal: it’s in our homes, in our hands, and now, it’s in our ears. Power Struggle invites you to listen in on honest, non-partisan, and fact-based conversations between host Stewart Muir and the leaders and thinkers designing modern energy.
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Power Struggle
The Truth About Sustainable Aviation Fuel in Canada
Canada could lead the world in clean aviation but will we? In this episode of Power Struggle, Stewart Muir sits down with Geoffrey Tauvette, head of the Canadian Council for Sustainable Aviation Fuel, to explore how Sustainable Aviation Fuel (SAF) could revolutionize the industry, if we can overcome the cost, policy, and infrastructure hurdles.
With 810,000 Canadian jobs tied to aviation and growing demand for low-carbon travel, the stakes are high. Jeff explains why Canada has all the right ingredients, abundant feedstock, refinery capacity, and global partners, yet still lags in building a domestic SAF market.
We break down:
- What SAF is (and why it matters for climate)
- How airline economics and public expectations collide
- Why BC's "climate leadership" may backfire
- What Canada must do to stay competitive in global aviation
This is the conversation aviation, climate, and energy leaders need right now.
Don’t miss this deep dive into one of Canada’s most urgent energy debates.
Subscribe for more from Power Struggle.
The energy conversation is polarizing. But the reality is multidimensional. Get the full story with host Stewart Muir.
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And that's that's very relevant as we talk about uh you know the sustainable aviation fuel and why the the fuel that we're talking about, the SAP, we'll call it a SAFRIM going on, but why we we need it to be similar to the current jet fuel of today, similar in terms of uh uh how it operates on an aircraft. We want it to be safe.
SPEAKER_01:I'm Stuart Muir, host of Power Struggle. I'm really excited at our guest today helping us to solve the energy trilemma. How do we get the energy in our lives that we need that's reliable and available and acceptable? And that guest is Jeff Tovet. He's the head of the Canadian Council for Sustainable Aviation Fuel. And we're gonna talk about how we get more sustainable in the future, how we get to where we need to go in the most sustainable way. Jeff, good to have you.
SPEAKER_00:Thank you. Glad to be here.
SPEAKER_01:Well, Jeff, uh where did you start your day?
SPEAKER_00:I operate out of Calgary. I've been there for about 20 years, so uh I flew in. I had other meetings today, so I made it I made sure you know I flew in for a purpose and and did some other stuff at the same time. So But yeah, from Calgary.
SPEAKER_01:Well, I was in uh Calgary this week. I was a I did a day trip, went in the morning, came back uh that evening, all very efficient, stacked up a few meetings as well. That's how I try to do it. Um but uh I suspect we're both uh frequent flyers. I know I am and uh you must be, but uh uh um sustainable aviation fuel is kind of a passion of yours, and I think it's a fascinating topic because we're seeing just a huge public expectation. We all want to fly more, whether it's going to Calgary for the day or Vancouver for the day, in your case today. Um and maybe people are going to to Thailand or Arizona and uh they're planning that holiday right now. Or like me, maybe my son is studying in Europe and is gonna go to Morocco for the weekend, not by train like I used to do when I was a student. Yeah, yeah. I like ship once. By ship from the ship. There you go. We're we're OG uh Euro students here, but um, you know, this expectation everyone has, and then you open your fridge and uh, you know, it's December, you've got some nice fat grapes there. Do they walk here or uh did they fly here from Chile? Yeah. Um this this world we're in today, what what do you make of it? You're an aviation and energy expert. You're at the intersection of really what everyone is thinking and doing.
SPEAKER_00:That's right. Yeah, and and I've been doing it for a while. So I've always, you know, I've been in aviation, commercial aviation space for over 25 years, um, always in the fuel environment world and and really brought together at my my last job at an airline. I'm no longer there, but brought sustainability and and fuel, the fuel world and environment together. So I've been kind of at the um the beginnings of all the discussions around the climate action plans at an international level that that aviation uh has had in place for a long time, as well as the domestic one. So, and in there, of course, buying the fuel, looking at the supply chains, how do we create this new renewable fuel uh to be used on aircraft? And that's really the challenge that that I've been passionate about for a very long time. You know, it's just like putting those together, talking to the people to bring together. Key here is um we need to work together. Airlines can't do this alone. Like the fuel uh that needs to be created, the new value chain, as we call it, is just very, very much bigger than what it used to be. And that's where I find myself playing a lot in, right? Is just really trying to talk to all those various stakeholders, bringing them together, uh, getting rid of the, I like to call it the myth busting of like different people's assumptions of what's going on on the other side. So um I find that interesting. And and look, I I've been in the industry for a long time. I want to give back to it. But part of I think what uh I like what I'm doing is really trying to change the industry. So that's that's my main goal, is like I'm gonna make it happen.
SPEAKER_01:Yeah. Well, this is exciting stuff. And you know, it feels like there's a a problem to be solved. I mean, the problem is we want to be able to travel. We want to be able to travel in a way that is sustainable. How do we, you know, do both those things? And, you know, here at Power Struggle with the podcast, the project we're doing, the way I like to put it is we're we're trying to solve the energy trilemma. You know, we want we want to have affordable energy, we want it to be reliable, you know, so it's there when we need it, whether that's flipping the switch and the light comes on, or you're going to the airport and that plane could take off because it's got fuel. And then we want it to be acceptable to the public. And that might mean sustainable, it might mean other things. You want to get these three things together. But it turns out it's as as we're discovering in this journey of power struggle, it's it's not easy to do that. I think the problem you're solving is a very aligned nature. And I don't know how you would put it in energy trilemma terms, but um, where would you say we are in that regard?
SPEAKER_00:Yeah, we and and funny enough, I I belong to a group called the uh Energy Futures Lab of Al Alberta, and we're focused with the same uh idea. How do we transition to um an energy system um that we can live with and that it's fair and people can access it, and so on and so forth. And it's that transition part, that system thinking with respect to uh the energy puts and calls that have to happen to make this work. And and for aviation, they haven't explained it very well in what they've actually done to improve their emissions. And there's a lot of work and a lot of you mean the aviation, like the the the airplane companies or the just the industry in general. So airlines? Yeah, the airlines, the uh we call them the OEMs, so like the the the plane makers and the bellways, the manufacturers of that refineries and the refiners, yeah. Like just who just call it the entire group. Right. All right. Um and so like our primary climate issue, of course, is we, you know, the airlines or the aircraft burn jet fuel, right? Which is uh so just just for reference, because we're gonna probably talk about it a bit, right? Sure, it's a fuel that sits like a little bit under diesel fuel. So it's between diesel and gasoline, if you will. So it's a cut of the barrel, probably about 10% of the barrel that in normal refining that's made into jet fuel. But we it's it's a product, we like to say it's a product that needs to be treated with uh white gloves, right? Aircraft, uh, we want to be very safe. Aviation industry wants to be very safe. So this fuel needs to be safe to use on an aircraft at altitude. So the lot, lots of, lots of time, lots of money spent ensuring that this fuel specification, the handling is all safe. And that's that's very relevant as we talk about uh, you know, the sustainable aviation fuel and why the the fuel that we're talking about, the SAF, we'll call it a SAF from going on, but why we we need it to be similar to the current jet fuel of today, similar in terms of uh uh how it operates on an aircraft. We want it to be safe. So lots of testing that gets done in terms of how we make it and ensuring that it can be used on the aircraft. And then of course how we like handle the whatever. So the current SAF that we're talking about ends up being the really the biggest solution for the industry in terms of reducing its emissions. So the emissions are what's impacting, you know, with the environment and the climate. You're burning fuel, you're burning fuel at pre-bing volumes, you're burning fuel on the ground, you're burning burning fuel to the atmosphere, right? So there are different impacts that happen there. Um we can spend, so the the industry has spent a lot of time ensuring that we bring in, like they bring in new aircraft, right? All the new aircraft that you see, the Boeing 787s, the Airbus 321 long range that you're the NEOs that you're seeing, they all they all use less fuel, right? So fuel is a it's an expensive commodity. The airlines don't want to waste it, right? So they they do like they spend an ordered amount of times uh or effort to really ensure that they use the least amount of fuel fossil. So what are some of the ways they can do that? Is it so so I'll give you one example. So I I've worked for the airlines. So at my last airline, we brought uh an aircraft into the hangar and we stripped it of all the stuff that wasn't regulatory, weighed it, and figured out what we like we could we didn't need anymore. Right. So that's that's the extreme that airlines go to try to figure out every pound counts. Every pound counts, yeah. So I mean that that's one way of doing it. So reducing weight. Um, but really effective ways on the technology side is really the new aircraft. And you're you see generally, you know, uh a generation of aircraft that are probably between 10 and 15% more efficient than the previous generation that are they're replacing, usually through the engines. But you're seeing like, you know, carbon fiber exteriors and lighter materials and and things of that nature. But the primary way that a lot of airlines have reduced their fuel consumption, and you see in the Caine Airlines, for example, a lot of new planes in the fleet, right? Uh, but you make that decision for 20, 25 years. So hard to swap out when a new aircraft comes in saying, like, you know, it's it's like you changing your car, right, every six months almost, right? Or every year or however that looks like. So that's that's one way they do it. Then there's all the the stuff around that. So can you fly efficiently? So the air transportation system. So in the old days, in some of the old systems, you fly between points. So you're like your routing is is between points everywhere, and it's a longer route. Uh, if you have a more efficient uh air traffic control system in Canada, it's actually done some pretty good investments. You like there's more direct flying, which of course reduces emissions, right? Um, and then of course, anything you do on the ground. So how's an airport designed? How far do you taxi? How can you like turn one engine off when you taxi into a gate? All these things kind of add up. And then that's what the the um the industry does in terms of making sure that we use fuel the most efficient in the most efficient way. But if we want to go further, there's not too many other options we have, right? Like uh the new fuels, like electric aircraft, it's being worked on. Um, but of course, you know, they're not made yet to fly lock distances. So I think we have uh Harbor Air here, who is that? Trialed uh an electric aircraft. That's pretty cool, right? That's fun stuff. I don't know if you've heard them talk, right? They have some interesting challenges. Um, they've done, I think they have a plane that they've converted over, but now you need to get it approved to fly with passengers in it. And that's challenging because the regulator doesn't necessarily like it's all new for them as well, right? So so how do you get that regulated to be able to be used in in in commercial flight? Uh so that that has to go through a certain period too. But we'll we'll see them. They'll come, they'll come probably by the end of the decade, uh, shorter distances. But we're still challenged with flying far. So what it what what do we do? And that's where sustainable aviation fuels come in, sustainable like SAF. It just it's a jet fuel replacement, except it it's made from renewable materials and it produces uh on a lifecycle basis, and this is what's important on a lifecycle basis, has way less emissions compared to a normal barrel of jet fuel, for example.
SPEAKER_01:So we're gonna be able to get sustainable aviation fuel in our planes, and we can all fly around not worried about the emissions anymore.
SPEAKER_00:That is the that is the plan. We think uh when industry uh forecasts impact of of SATH on in terms of uh what or what we need in order to achieve our long-term uh climate goals, it probably replaces about you know 60 to 70 percent of of uh the current jet fuel market, if you will, is is done through a sustainable aviation fuel. The problem today is is, and I I think this is what we're talking about today, is like how do we how do we switch, how do we build that market? It's still expensive, it's it's expensive to fly. Jet fuel usually represents about 25% of uh an airline's fuel cost. So how do we work in a fuel that today is still anywhere from like three to eight times more expensive than current fuel?
SPEAKER_01:Yeah, that's funny. I'm getting eerie parallels here to another area of public policy, um, electric vehicles and AVs. Because, you know, we're we're talking in a time when just a few days ago, um, the Prime Minister of Canada said, you know, we've got these EV mandates, we were gonna make everyone buy an AV by a certain date or a large share of EVs. But we've decided that since Canadians are not actually doing that of their own volition because they seem not confident they can charge the cars or uh afford them or other issues that consumers have, you know, they're just not doing what the policy said they're supposed to do. So we're gonna have a policy that recognizes that a little bit. Um now we're sitting here in BC where we have that same problem, but the policymakers have said, well, that's okay. We're we're gonna have a policy that no one wants to follow, but we're still gonna have the policy and not change it because um the public is so wrong, um or the consumer is so wrong. Uh I think is the what what the the message is from from the Trevor Burrus, or the consumer's not gonna do it on their own. Aaron Powell Consumer will do it. Yeah. I mean, it's it's almost uh when they put subsidies, consumer subsidies, you get five grand a back or whatever when you buy one, then pe more people buy. So it it pushes that percentage of buyers who are incentivized that way just over the line, the subsidy off, because maybe the government's out of money for that kind of thing, and then suddenly people aren't doing it. Does it code? It doesn't stay there by itself once you get it to this high level. And this is the conundrum of anyone who's so we you know, when it comes to the energy trilemma and EVs, I'm just wondering, uh, you know, I I do have a question here for you, Jeff, because I'm I'm just intrigued whether these are kind of parallel similarities. Am I seeing uh a relationship that that doesn't exist? I mean, what's happening with consumer adoption of SAF? Are we which I guess consumers are the airlines, are they doing what they are meant to be doing?
SPEAKER_00:That's it's an interesting question. So I I would uh I would start by saying airline is not a car, right? And and I think our problems, the problems of the industry are very, very different uh from how these climate policies affect, like, say, just you, whether you're gonna buy gas or buy an electric car or buy renewable or whatever it looks like, right? Like it's it's a it's a completely different uh um, I'm not gonna say industry, but a completely different problem that we're trying to solve if we're solving problems all right. So what's the difference? Well, car cars, you're are you competing against anyone? Who are you competing against? For example. So when you're you have to buy an electric car, uh are you worried that someone from a big city down in the US is gonna come take your job away or you know, is is gonna steal some business away from you? Uh probably not, right? Um, but for for aviation, um, you're in this different uh competitive regime. You're you're flying into airports, you're competing against maybe other or airports are competing against other major airports. So the cost of flying into that airport becomes important, uh, especially you're trying to compete against like another. So in DC, for example, like what is what is uh uh Vancouver airport's cost structure versus Seattle? What are the decisions can be made? You can use your electric car and drive down to Seattle. And if you happen to save, I don't know, you know, a couple hundred bucks for a family of four on your airfare, you might actually do it, right? And so we feel that um it's unfair to try to take uh policies directed at especially car drivers, for example, and apply it to aviation. So we think that's problematic. Uh so that that that I would say is number one. And then I always like to say, is it the airlines that don't want to buy the fuel or is it the consumers that don't want to pay for it? And so who is the real, who's the real person that doesn't want it? So do you want to put something in place that forces the airlines to buy the more expensive fuel and then pass it down to the consumer? Maybe that's a good idea if uh you don't have a cheaper airport that's 100 kilometers away that can uh outbid you at every opportunity, right? Because uh they don't have the same policy in place, it's cheaper to operate. So those those are the small little issues that I think airlines are are are dealing with today is is how how do how do you, yes, they want to decarbonize. They've all said they want to, right? The industries agreed, yes, we have a target. We are decarbonizing. And they were they were one of the first industries worldwide to develop like a global target for the industry. So they they've been working on this a long time. But now we're challenged with, okay, uh, how do we get this policy right so we don't make ourselves so uncompetitive that other uh areas can steal the business from us? And and and unfortunately, it's just so different from a car that we just gotta watch it on how we sort of compare those two policies.
SPEAKER_01:Yeah. Now at YVR, Vancouver International Airport, there's a lot of airlines from around the world. I mean, we've got our flag carrier here in Canada, we've got various airlines, you've got Porter, as well as Air Canada, you've got um WestJet, but then you've got uh British Airways, so I know they fly here. You say New Zealand's CAFE, the Chinese carriers Air New Zealand is here as well. Air India comes here. Now there's a direct flight to Dubai as well, but that's Air Canada. Air Canada's flying, yeah. Yeah. So you got these airlines from just all over the world that that come here. Um what decisions are these airlines making? Because you're you're flagging this um issue of would someone who could make a choice, they're uh based in Vancouver, maybe they could fly out of uh Seattle or Bellingham, maybe. Um but you've got people coming in as well. They're they're saying uh that those those airlines are are saying we're flying to Vancouver. When we get there, we're gonna have to fill up with fuel and we buy it in the local system. Maybe we could get it cheaper if we flew this this other city. Is that a a risk?
SPEAKER_00:Is that a realistic thing? So that's and and that's the um the the crazy business of aviation, right? So you you have a hub airport, people are connecting out of it. So you you're you're trying to compete. Um so there are a few decisions you can make. If it's too expensive, you can pass it through. If there's no competition on a route, maybe you're able to pass it through. So it's not a problem. Uh, you could reduce your flying, or you could change equipment size. So maybe you don't bring a big aircraft in, you bring a smaller one in, or you come in less often, right? If you're really trying to protect that, or you stop offering service to a regional network, right? So you're saying I have to save costs somewhere. So maybe I'll stop doing that in exchange for protecting my international route. You can stop flying altogether, which, you know, I don't think that's what we want either. Uh the the consumer side is interesting because you have such a wide, I think, a wide breadth of folks that fly. You have friends and relatives, right? Like for you know, people who live here, people, their families are from afar. Uh, you know, did they save up? They want to go visit from time to time. So it's it's like it's an event, right? You have the the flyers for business, like you, you and I, who, you know, are less cost sensitive and probably can, you know, accept a little bit more of an increase from time to time to be able to uh potentially pay for this. But you also have a large percentage of people, if they are uh very sensitive to the cost, who might just be looking for the the best deal. And and unfortunately, today, because uh you can do it, you can just drive somewhere else and go take a cheaper flight. So uh, you know, you add up all that together, what does that mean? What does that mean for service out of Vancouver? There's a lot of what ifs in here, right? Like a lot of things could happen. But the the reality is um, you know, if policies are pushing the cost of that product up only in your area and everywhere else around you is not affected by it, eventually something's gonna happen. Something's gonna happen.
SPEAKER_01:So now, you know, BC is a really interesting place to be a watcher of energy and the energy trilemma, because in BC, there's this kind of political philosophy that's been adopted. It's quite a resilient one of climate leadership. And the thinking goes something like this you know, if uh e even though we're a pretty small jurisdiction, you know, five million people, but if we show that we are adopting a policy, uh green policy, even though it's uh maybe more expensive than say our neighbors in Washington State or Alberta, and it makes costs higher for consumers here, that's okay. We're gonna do that because if we do that, the rest of the world is gonna look at us and say, wow, look at BC. That's leadership, we're gonna do that. And so for the last decade or so, that's been kind of this this philosophy. And you know, I've been watching to see, okay, what's gonna happen? Is this uh climate leadership thing gonna play out? Uh bet the rest of the world is gonna go, yeah, let's do the BC thing. But when you look at uh what's actually happening, you know, in the USA, um they're kind of scrapping any environmental policy under Trump. Um, so they're not taking the cue from from BC. Uh you look at what's going on, say, in the growth economies of the world, the biggest growth ones, like in East Asia and you know, South Asia, um, they don't seem to be um taking a cue from BC's climate leadership because they're they're just using more energy. In fact, they want to buy energy from Canada. Um it comes to sustainable aviation fuel. I've been reading up, you know, I knew you were coming, I've been following uh sustainable aviation fuel. I don't see a lot of other places outside maybe Western Europe where they're doing this kind of mandatory thing of of pushing their local aviation industries to uh the extremes that we're seeing in BC. So this climate leadership ethos has been translated for aviation into these rules. And um it it's it's a classic problem of mandating that consumers or industry uses something that doesn't actually exist in the marketplace. And I'm just intrigued by this. I mean, is there enough sustainable aviation fuel to to do the climate leadership thing?
SPEAKER_00:Aaron Powell Yeah. Slowly. Is that right? Okay. Slowly. I mean, I think uh uh I can't recall the stats offhand, but I add a International Air Transportation Association group tracks it at um maybe it's like less than a percent or two percent today of total jet fuel use is uh you know is is sustained via SAF.
SPEAKER_01:Sorry, two percent?
SPEAKER_00:Yeah, yeah. So it's not very much. Well, we we knew that, right? Like our we we so Canadian Council for Sustainable Aviation Fuels our organization. Uh we've taken a an ecosystem approach to advancing uh the production and use of SAF in Canada. So we we launched a roadmap a few years back and suggested that Canada has um all the right ingredients, by the way, to make SAF, right? We have the feedstock, which is generally a problem in a lot of countries, but we have sustainable feedstock, and we have a lot of it. Uh we have, I like to say, a refining capacity. We refine hard to refine stuff, and this is what this is. So we have that. We have airlines that will use it. If we make it cheap enough or affordable enough, all the international airlines that fly into Canada will be able to pick it up as well. So it's great, right? We're we're we're playing a role in in helping decarbonize the industry. So that's kind of cool. Um, so we have all that, but what's missing, of course, is like, okay, well, how do we how do we get that rolling? And and and when we look at our like our North Star, if you will, on what we're looking at. So any type of policy, we want it to be, we want aviation emission reductions, essentially, right? So if we want, if a policy gets put in place, then we want to at least, if we're we're paying, if the industry is paying into it, let's make sure at least we we are reducing our emissions from from the industry at the same time. But we have, we want to activate Canadian feedstock, we want to make it in Canada. We think there's opportunities to do so here. But at the same time, we want to keep the sector, the aerospace and aviation sectors competitive. Right. So if you put those four uh um North Star kind of sort of uh directional things on what we're talking about, that I think it's very important to analyze like that. So today, there's been very few um amounts or very little volume of SAF produced in Canada. There's been a few trials here and there. If there's one in Parkland, you you know, Parkland allows last year here in Burnaby that they produced a bit of um a SAF through a process called co-processing. So really using the existing refinery and replacing the crude with some form of biocrude or some you know renewable uh um feedstock that they could use existing refining capacity to make. But um there are other, it's just it was just an expensive affair. Like the setup was expensive. There's not necessarily the support uh on the spec side. They were helped out through the the provincial sort of uh systems here with um, you know, if we're getting into texts like the initiative agreement. So there, there, you know, there are there is some support from the province, I think, in terms of sort of pushing these things forward. So I think there are some good things that are are being considered as part of all this. It's just the worry still is there's not enough, right?
SPEAKER_01:So I'm just curious. I mean, suppose that was some sustainable aviation fuel. Yeah. Would I be able to hold up uh some conventional aviation fuel and and see that they're different?
SPEAKER_00:Are they like what's the chemically the same? Sale almost the same. We still need to blend for a few of the properties, but yeah, you wouldn't be able to tell the difference. I'm glad that's water. Well, no, isn't the story like Virgin and Airways? I think uh Richard Branson was on a flight and the very first satellite, and they told him, Oh, yeah, this is safe, and you took a save. Drink, not safe to drink, boss. Not to safe to drink. So um, anyways, I I wouldn't suggest you drink it, but but it does have actually some good properties that are better than jet fuel, and that it doesn't have um particulate matter, for example, it doesn't create sulfur. So, I mean, those are the the the precursors for uh you know smog and things of that nature, right? So, so I mean there are some better qualities to it on that side, and of course, of it it doesn't produce uh the same amount of emissions. So it, you know, but it's it's unfortunately really expensive. Does it have the same amount of energy as conventional? Yeah, uh interesting enough, yes, it does generally, and actually a little bit more sometimes. So it actually could help, right? Like you can you would use less to travel the same amount, essentially. So, but I mean it it would you would have to really you know direct that product to that aircraft, which is is really hard to do.
SPEAKER_01:So I I sort of imagine if you're an airline or you're in charge of the fuel depot at the airport, you know. Hey, Chevron, I need some fuel. Can you bring it? Yeah, when do you need it? Um, next Wednesday. So the truck comes next Wednesday and then you got your fuel. Um, how does it work with sustainable aviation fuel? Do you just call up the supplier and they bring it to you and all that?
SPEAKER_00:Yeah, because the market is so new, there's like a whole bunch of deals everywhere. So it depends on where the staff is coming from, who has it. Because there's not a lot of supply, obviously there, you know, it's it tends to get locked up pretty quickly. But yeah, you could um so it's a drop-in fuel. So you have you still need to blend it though. So that's that's a technical challenge that it needs to be blended with regular jet fuel to ensure that it it meets all the requirements for for putting on an aircraft. So now blend it. Okay, you blend it. So there's some blending requirements. Um, but you can, you know, you can buy it pre-blended, if you will. So if someone takes both, blends it. Usually that's one of the fuel suppliers today, does that, and then just delivers it to the airport and it's drop-in at that point. Yeah, it meets all specifications for safety and usage. And and in fact, lots of airports are flying on SAF today, right? LA, for example, right, has been receiving uh SAF deliveries, blended SAF deliveries for many years now. So, like what, you know, and and and I know each airline, the complexities, each airline says I am buying SAT, but then it gets put into the airport system and all mixed together. You know, so so basically aeroline is flying on.
SPEAKER_01:It's kind of a notional thing in some sets.
SPEAKER_00:Yeah, yeah.
SPEAKER_01:So yeah. And um you mentioned biodiesel and like where where does that uh SAF come from?
SPEAKER_00:Oh, yeah, so that's important. So there's a if like the differentiation. So biodiesel and renewable diesel, of course, are two different blocks. Right. We don't want biodiesel. Biodiesel freezes, it's you know, we don't safe. It's not yeah, we don't want that stuff anywhere here, jet fuel or crap. Yeah, renewable diesel on on the other hand, of course, is just on the pathway to SAF, if you will. So that's our main challenge today is the same um technology pathways that make renewable diesel typically are making SAF as well. So SAF is a little bit more expensive to make and needs a little bit more extra distillation equipment, for example. Um, so it's harder to make, it's more expensive to make. Uh, and that's that's the challenge we have today is that because of that additional expense to make it, uh we and that that isn't reflected in today's current policies that are uh supporting the renewable diesel and the ground transportation um, you know, transition to to those fuels. So we're we got we we have to find some reason to try to pull it out of that that renewable diesel pool. Okay. But that means we have to pay even more. Right. So then, you know, um that's certainly a challenge. So there are like if we go back and look at the four main ways of making SAF, if You know, if uh if we want to do that. The the main way you hear today is through the use of um a plant-based oil. So use cooking like fry oil, like the stuff that restaurants fry their stuff. Do we eat enough French fries for that? Well, that's that that's debatable, I suppose. But there's there's used cooking oil that gets made. You know, the the you hear in the market today, is it really used or not? That's a whole other challenge, right? Um, but typically uh a used cooking oil is it can be used to make fuel. And in there you have what call fat oils and greases, so tallows, which come from you know, uh slaughtering of animals and of that nature, all that fat that gets left behind. And then of course you have for Canada, for example, is canola or any type of other similar oil, soy, uh, or that sort of thing.
SPEAKER_01:So you're farming for that. And then you're farm for oil is yeah.
SPEAKER_00:So a question we get asked a lot is, you know, is there enough for everyone? And again, I go back to the system problem. Like uh aviation is not depending on growing plants, you know, to get that oil to make all our SAF, right? Like there are other ways, and we'll talk about those in a sec, but there are other ways of getting there. But certainly today, that and that's called HEFA. So HEFA-based fuels uh can make renewable diesel and SAF. And the stuff you see in the market today is generally from that process. So around the world, there are various different ways of doing that. You see China building sewer refineries now. The US, you know, was in they had a few in the pipeline to to use that as well. Uh the new SO refinery in in um in Edmonton, for example, that just came online is is using that process uh to make renewable diesel. Not SAF, but renewable diesel at right point. Tidewater in BC as well is just picking renewable diesel through a similar process. Um that that would be the that that's where we see the SAF coming from in the next little bit. The next, the next stage is is using uh advanced feedstocks like forestry, like wood pellets or forest residuals, uh agricultural residuals, the stuff left over after you take the grains out. You know, and you can convert those either through gasification. So we'd like to call it blowing it up, right? And then using the magic of chemistry to mix it and turn it into a fuel.
SPEAKER_01:Do we have all the technology we need for that? All that stuff.
SPEAKER_00:So we know how to do it. We know how to do it. Uh some of the technology needs more help than others. And and um that's that's where we're at today, right?
SPEAKER_01:So there must be entrepreneurs, investors kind of racing into that space to Well, yeah, racing is uh is a loaded word, I suppose.
SPEAKER_00:So what's what's missing is what what what does Canada want to do all this stuff, right? So we we our our thesis is we have all that feedstock. We have it, advanced feedstock, we we probably have a a lot of it.
SPEAKER_01:Yeah, giant forest industry right here in BC.
SPEAKER_00:So yeah, we we know that that all that fuel causes problems if left too long. So maybe there's a way we can go get it. Um, you know, so how do we what do we need in place to sub to incent that manufacturing to go get it, turn it into something, and then use it. So if this was all the same price as normal fuel, it wouldn't be a problem, right? Like we would probably be doing it, but it's all expensive. There's a lot of stuff that has to happen to make that work, right? If we have to go uh build new supply chains and build things in locations we're not used to, and you need water treatment, you need hydrogen, you need electrical power. We know that's a challenge these days, you know, in order in in these places where all these things are. Those are the things that are making it more expensive and and challenging for us to build. But we know how to do it. We know how to do. We just need to make a decision on why we want to do it.
SPEAKER_01:Yeah. Now, um you were saying that SAF is about three to eight times more expensive. Yeah. So right now, the rules call for what percentage to be used of of SAF in a decision uh to they they've there's an emission reduction target in place.
SPEAKER_00:There's a net zero target in place as well by 2050. Um so only in those locations which are mandated uh are is there like an actual required blending requirement. So Europe, you know, I think started at 2%, they're targeting something like 10% by 2030. We know that BC, for example, has set a blend limit starting in 2028 of 1%, going up to 3% in 2030. But the rest of the system is pretty much on a voluntary um call it opt-in basis. So no, no requirements yet to to blend in the US or Canada uh nationally, for example.
SPEAKER_01:Now I like to call the contrast there the carrot versus stick, because here in BC, we've kind of gone with a stick approach. You know, we're gonna beat you with a stick here if you don't do what we say. Whereas the US is pretty famous for being a carrot country. Yeah. You know, um, we want you to find a way to make money from this opportunity. And are they doing that down there, Dow Solves?
SPEAKER_00:Yeah. So the US, there's been a few changes of late, as you I think hinted to before. But they there there still is a, I like to call it a an incentive program that supports the manufacturing of biofuels. Uh they just recent I think it's changing as of next year, but there was a small um benefit to making SAF, the way they had set it up. And unfortunately they're getting rid of that. So we'll we'll see what that does.
SPEAKER_02:Is that the the Trump Trump, the federal regulations? Yeah, they just released the beautiful bill. Right. So that was one of the changes. Yeah. So we'll find out what that does.
SPEAKER_00:We'll find out, yeah, yeah. But it's still there, there's still more, there's still an incentive for producing and making it in the US. Right. So they're focused on using their feedstock and turning it into something and selling it. Whereas in Canada, I think we we still haven't figured that out. You saw last week, you know, we we we saw a little bit of support for using canola. If you if you're using canola to make uh a biofuel, well, there's here's an incentive for you short term. Um, but we're we're we're still missing how are we gonna like I I I think we have the feedstock. It would be way easier to focus on what's the support available to start making it? Like if we make it and we see a pathway to making it, then we can talk about how we're gonna use it. But like doing it reverse when we have all this stuff and there's small programs that help. But I think uh we're we're still small in the world, right? Like it's we almost need to work together a little better.
SPEAKER_01:Do we make all of our jet fuel now in Canada that we use?
SPEAKER_00:Yeah. So this is uh this is a so no. We um we probably make about 70% of our requirements domestically. Majority of it. A majority of it. Uh, and then uh 30% of it is imported. So let's call it there's imports coming in from the east. That generally comes from maybe the south of the US. And all the West Coast, including you know, Vancouver. Vancouver's market, in fact, for jet fuel is 70% imports and 30% domestic. So that's you know, uh stuff from the US, stuff from primarily Asia is where most of the jet fuel is.
SPEAKER_01:So all the Asia is by ship, is it is it shipped in from the US too, or is it piped? Uh it is well currently. Right. Okay. So it's 70% comes in if you're flying out of YVR, that's something to think about.
SPEAKER_00:Yeah. And and uh but when you look forward, so when you look at like the Kane Energy Regulator, even even if you put you know new aircraft in place and more fuel efficient aircraft, there's still a growth in jet fuel. So if we're gonna grow from where we are today, like we we probably produce between nine and or we use nine to ten billion liters of jet fuel a year. We're still pretty small, but if you take the 10 billion, is is forecast to go up by another three, four billion. And so where's that gonna come from? So likely imports. And so we think SAV could play a role uh in terms of making us a little bit more energy secure by making it here. And and when you look out to the future, and this is this is the challenge with especially the other modes of transportation. So, car, you have options, right? You can, if the gas gets too expensive, what would you do? Go take the bus. You might buy an electric car. Uh, I have one, I like it. But you know, you might buy an electric car, uh, trucking, same thing. They have options, you know, they could go electric, they could go hydrogen, but aviation really has zero options for a lock timer. And then so we see uh that volume being needed more in the future versus some of the other fuels. So like that's that's where we're we're challenged with, well, we know this is gonna grow in the future. We like all the policies uh push all the fuels to ground transportation today. We understand that's a bigger sort of you know pie of emission reductions, but we don't want to be caught in a situation where we, you know, we're always fighting for like 10 years, and then when we really need it, it's gonna take us another 10 years to build the market. So, how do we get a piece of that market without costing it so much that you kill aviation to start with? Because I don't think that's the goal, and I don't think that helps Canada, being that we really don't have any other method of connecting.
SPEAKER_01:Yeah, and I mean it's gotta be said we're this giant country, huge landmass. We have a huge amount of essential economic activity where people have to fly pretty long distances. It could be they fly from Newfoundland to northern Alberta to go to work, and people literally do that, but they go from Vancouver to Smithers or Terrace to go to work too. Yeah. And shipping goods. I mean, it's a long, long way, and it's it's the most efficient, cheapest way. So people are gonna need to fly.
SPEAKER_00:Yeah. And like, I mean, you talked to uh I remember being on a panel with uh the president from Air North, I think I was, and he was just saying you know, the the the impact that aviation has on um whether it's Yukon or White Nose, I can't remember right now, in terms of the ability to allow even the young folk, right? Like to go to school, come back, they can work there, they can like, but if they need a doctor, they can fly and go see the doctor. So that's that's where you know we need to be careful when we look at how we're going to do this. And the and the industry wants to, right? And we're and we appreciate you know some of the the small steps that have been taken. And and and I think we just we need to remember that there's an aviation policy and a clean energy policy. And unfortunately, we've only talked about the clean energy without considering how it impacts aviation. And I think it gets forgotten in discussion. That's what we spend a lot of time doing, trying to make aware, you know, hey, we we need to think about the impact of this. But at the same time, I mean, the sad, like the sad reality is um if it costs too much, you you you know, people stop flying. Right. If it costs too much, some people will always fly, some people will always fly, right? Because there's a group there. But if like generally, like that, that when you look at the the amount of folks that are traveling, it's generally you're I you save for a few years to go on vacation, you're going to visit your friends and relatives. Uh there's yes, there's a business flying, but yeah, uh, so how do you reconcile all that? We again we don't see the world slowing down in terms of decarbonizing. So as much as maybe our friends the south have you know taking a step or a pause, uh, I'm not sure at the end of the day, it's you know, for aviation flies all over the place, you're still going to other areas where they're still looking at decarbonizing. And then, you know, should Canada not have a source of SAF, for example, if we need like if you're flying to Europe and they're not stopping, like how do we ensure that you know Canadian airlines have access to something we, you know, we need to be able to build our own supply. And we happen to have everything we need to make it compared to a lot of other places that don't. So like why aren't we leaders in this?
SPEAKER_01:Aaron Powell So let's just summarize this stack of things that needs to happen.
SPEAKER_00:So we're solutioning.
SPEAKER_01:Solutioning, yes. I mean, uh we've got abundant resources of the feedstock to make our own, but it sounds like we lack maybe some of the equipment or the investments in certain refineries or techniques to turn that feedstock into the fuel. So what's the fix in that space to make this work? Aaron Ross Powell, Jr.
SPEAKER_00:I think that there are opportunities for us, right? As we I think I I hope you agree that we can't stay on oil and gas for hours. It's going to be a big part of what we do, sure. But what are the steps that we are taking to make sure that we're competitive in the future? And I think for aviation, one of them should be wait, we really need to decarbonize that one point or another, it's because it you know it will become important. I think people will understand it more. And so if we have everything it takes to make, uh, we know that the industry itself in aerospace, and you can you can look at the latest uh economic studies that IATA uh and and some of the other international uh groups have done. And aviation aerospace represent$115 billion worth of economic output in Canada. Now that's direct and indirect, so that includes tourism and all sort of the supply chains that exist, making aircraft in this country. It's like 810,000 jobs, direct and indirect. So if we want to sustain that going into the future, what kind of policies do we need in order to be able to protect that from going forward, right? So we're we've done some studies. We we think we can create a SAF market, uh, which will help us stay competitive in the future, uh, keep that economic output going, right? And when you talk to the OEMs and all those, that sort of industry, you're like, yeah, we need SaaF to be able to continue slowing our aircraft. We need SAF. But if it's too expensive, you kill all that activity, you impact that economic output. So it doesn't work. So unfortunately, we need support from the government in order to build this. So we need that, we need those signals that make it um good for someone to want to make the investment, first of all. But we need some help in terms of um spreading out the cost so it's not all on the consumer at the end of the day, right? Because of the impact that the the the aviation breaks. Look to look at look what it's done to open up markets, like is Calgary, Calgary without Weshet there. Is it like you saw all the announcements how smart they made in the last two months? You know, is Winnipeg, Winnipeg, like so, so you know, it it we we just need to look at how we can um support making SAF understanding that aviation aerospace bring a broad impact to the city, the economy, the airport, everyone who lives there. Like, how does that work? And that that is the business case for I think asking the government to help us support uh through some form of uh incentive type mechanism to help create the environment to make those investments to put the manufacturing in place. And we can create, we can use our Canadian feedstock, add value here. Like, why are we ex like we export canola seeds somewhere else? Like if you crushed and made the oil here and turned it into something of value, well, that you know, that's a benefit of Canada too. And that all gets worked into that additional economic value that that gets produced if we make a SAF market. If we just want to import, we actually like lose money. Right. Like what we found in in our assessments.
SPEAKER_01:So we need to make a little bit of a shift in where we're headed right now in order for this vision to happen.
SPEAKER_00:Yeah.
SPEAKER_01:And if we don't, flyers are gonna look at at paying more for some or all of their trips.
SPEAKER_00:But yeah, if they're flying out a B. Exactly. Like if it if it's just um imposed, then costs will go up. Is that good? We're already a very high cost uh air regime in Canada to start with. So it's just yet another additional cost on top of it. Um do other countries start going, well, if you're not gonna fly in with your own staff, like you're gonna get uh you're gonna land at night as opposed to you know the prime landing spots where you, you know, or you get charged more because of it. So there are all these things that could happen in the future if we don't do it. But we like, is there a competitive advantage for us to do this? We think yes. Um, it needs some support from the government in order to create that system to focus on manufacturing. That's where the jobs are. That's where you know we can export those services to the world as well. You can become experts in in transforming our feedstocks into other stuff. We're close to our feedstock. We don't have a long distance to go to sort of process it. There's all sorts of great reasons for why we we should do this. It's just you need the willingness to kind of sort of all work together and make it happen. Well, how do people learn more? How do they learn more? Uh so we've that that's a great question. So we have our website, of course, you know, c SAF.ca. We're just about to um produce some awareness uh information around SAF. So how's it made? What are the issues? What are the environmental impacts? So we're we're just in the process of of finishing those touches up and we'll we'll be releasing that soon. Um but I think it's important that um, you know, the flyers start getting more aware of um the the sustainability impact of their travel. And and until we understand a little bit more of what that looks like, it, you know, we were gonna have a hard time with this. But um I think it's getting there. I mean, wouldn't you want to travel uh sustainably going down south? Uh absolutely. Yeah. So there's there's a great opportunity. And so imagine if we said to you, hey, uh we've um this fuel you're on was uh farmed in Saskatchewan. We converted it into uh SAF in in in BC and we brought it to the airport, and you're flying down to uh you know the Caribbean on uh 80 Burger doesn't want dashes. I know it's it's exciting. And how come we can't be um you know a low carbon uh aviation hub, right? So now uh Calgary or BC has you know uh low carbon fuel where international airlines want to come and it's affordable, but the keys gotta be affordable, right? So how do we get there? We get there through Zale, and we get there through having support to build the supply chains and manufacturing to make it happen. And and I think that's what we need to really get to where we need to get to.
SPEAKER_01:Absolutely fascinating. I'd like to take a moment to thank our special guest, Jeff Tovet, for coming on the Power Struggle program today. Conversations like these make all the difference in a world of misinformation and uncertain reporting. So make sure to like, share, and subscribe because we're gonna be tackling new topics with exciting guests like Jeff every week on Power Struggle.
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