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(bright music)
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Hi, my name's Diana Dimitrova.
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I'm a managing director and partner in BCG's London office.
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I head up our UK aerospace and defense practice here.
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Today I am joined by Amy Ruddock, a BCG alum,
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and an expert in sustainable aviation fuels
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and decarbonization in the aviation industry.
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We'll be having a look at how the industry can
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and must accelerate to 2030
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to reach some of the objectives it's set for itself.
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Amy, tell us a little bit about your role in the industry.
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I am Amy Ruddock,
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and I'm Senior Vice President
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for Sustainable Aviation and Corporate Development
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at Willis Lease Finance Corporation.
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And Willis Lease is a leading engine lessor.
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My specific remit is to build out
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a business line focused on sustainable aviation,
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and through that we have a subsidiary
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with the sustainable fuels,
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and with the sustainable fuels
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is planning to develop, build,
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operate sustainable aviation fuel plants.
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So our first project is up in Teesside in Northeast England,
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planning to produce 14,000 tons
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of SAF per year from 2028 onwards.
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So while SAF production increased by 1150%,
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which is great, over the past three years,
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it was only 0.3%
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of the volume of jet fuel in 2024.
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Now we recently conducted a study
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that had 500 executives of the industry,
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and they highlighted some decent barriers
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to how we can reach the IEA 2030 objectives
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based on the announced pledge scenario.
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One of the things that we found
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is two out of three of these companies
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are not interested yet to lead.
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They're more trying to follow the space.
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And the main reason that was cited for that
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is the SAF business case.
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They are still having a bit of a challenge
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to kind of make the financials work
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and don't quite know how to move
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through that blocker fast enough
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towards the 2030 objectives that we're discussing.
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What do you think?
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I'd like to just say we are very much bucking the trend,
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and we appreciated your report,
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but I think, as a lessor,
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we've very much stepped into this space.
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So we, as a project, have done what we can to deliver.
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We've de-risked,
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we've looked at minimizing projects and project risk.
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We've used technology that is existing
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and that's been out there and that's been proven.
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We're working with partners who have a history in the space
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and are able to share some of the risk.
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And then I think, you know,
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how do we finance this project?
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When we go to banks,
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and they look at can they give us debt
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over 15 years to build,
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and they're asking questions like around the revenue.
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(bright music continues)
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And so for us it's that market uncertainty,
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and the how are we going to find a 15-year contract
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to match the debt tenor that banks can rely upon?
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So it's from an investment grade offtaker.
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Specifically in the UK I would just take the example
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of the revenue certainty mechanism,
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which has been designed, and it's fantastic policy,
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to help with this risk
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and give producers certainty.
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Only the policy concept is being put out there,
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but not the details.
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So several of our potential offtakers in the market
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are seeing this carrot over here,
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and are then saying, "What if I go early?
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Am I going to be disadvantaged?"
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So, I think it's just a case of providing that detail
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so that any offtaker in the market
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who wants to go early says, "Yeah, I know the risks,
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and I'm prepared to do it."
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It's a great reflection.
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One of the other key findings from the report
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was around kind of coordination
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and collaboration across the industry,
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and I know you have plenty of experience with that.
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You know, I think we can all agree
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it's a bit of a virtuous cycle, right?
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We need regulatory and voluntary SAF demand
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to increase supply,
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then the growing supply helps bring costs down
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and helps increase the confidence.
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So where do you think the stakeholders need to focus
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on that collaboration point?
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Or do you have examples where you've already seen it?
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It's now deliverability,
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so I've seen over the past 15 years
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collaboration in the industry to think around...
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Well, initially it was,
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"What is our major lever to decarbonize?"
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And then we sort of landed on SAF
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and carbon dioxide removals,
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and then, you know, what should SAF policy look like
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when we've arrived at the mandates?
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So, collaboration over the last 15 years, fantastic,
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but I think we can now afford to start changing
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the focus of the discussions towards,
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"Okay, how do we actually make this happen?
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How's it going to work at steady state?
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What is the role of different players
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within the value chain?
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How are we going to share risks between players?"
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And I think that is where conversations should start to go.
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Every conference you go to,
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I think highlighting your examples
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of how we've got projects over the line, like who did what,
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who's going to do what going forward.
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Showing the blueprints
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of what's already taken place.
Exactly, exactly.
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Oh, yeah.
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So, taking into account again, the IEA's 2030 objective
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for SAF under the announced pledge scenario,
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what do you think are the critical steps
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the industry needs to take in the next five years
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to make sure we get close to that?
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I speak from the perspective
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of a developer of advanced biofuel SAF,
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and so second generation SAF,
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and I think much of what I say
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is also true of third generation SAF.
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And I do look to 2030,
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and I see we're going to be short
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if we stick where we are today.
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It takes two to three years to construct a project,
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and that is being optimistic certainly
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at the two-year end.
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And that happens after final investment decisions.
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We've got very little time to find an investment decision.
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So it's not doom and gloom,
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I'm just saying we have to unlock
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those revenue points that I made now
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in order to be there, but by 2030.
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If I put my airline hat on,
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I'm ex-airlines,
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I would be worrying in the UK market,
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I would be saying,
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"Where is that supply of those second-generation
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and third-generation mandates going to come from?"
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And if it's not there,
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am I just going to be paying a buyout price?
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And if I'm paying a buyout price,
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I'm paying a penalty,
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but I'm not getting the carbon benefits,
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and that's not good for anybody.
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You mentioned in there you're ex-airlines,
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you're also a BCG alum.
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Could you just give us a bit of a reflection on your career,
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and some of the things
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that have maybe been kind of big boulders in it?
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So, when I was at BCG, I very much focused on aviation.
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My third project was with a low-cost airline,
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and I came in and did the growth strategy
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and then the implementation, and I got the bug.
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My heart beats aviation,
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has done for a very long time now.
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At BCG I managed to work
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with six global airlines or operators,
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and when I left, the path was pretty clear,
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it was going to be an airline.
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So I went to Virgin Atlantic
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and my remit included sustainability, strategy,
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corporate affairs, and Heathrow expansion.
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And that was a fantastic mix for me of the strategy,
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which I got to know,
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but also very much the operation side,
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and I loved the fact that I was working
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on both Heathrow's expansion and sustainability,
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so I very much had to think about what are the trade-offs,
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and like how do we make this expansion sustainable?
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I think for me, that solves something that
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I love the industry so much,
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but I had that niggling doubt of,
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"Can I be involved in something
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if it's not aligned with the sustainable world?"
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And then from Virgin Atlantic,
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I went across to Carbon Engineering 1PointFive
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and worked on direct air capture, so carbon dioxide removal.
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And my motivation was again,
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very much aviation decarbonization,
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and then from there to SAF.
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And I think back to my BCG days,
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and it's the linchpin of everything that I've done.
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But a couple of the values have really stuck with me,
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and it's so important in the climate-tech industry,
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drive inspired impact, and lead with integrity.
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And I think it's just the case of saying what you think,
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helping people get to the best answer,
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really driving towards like, "How do we solve this?"
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Well, it's brilliant.
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It is part of our core, so it's great to hear.
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Keeping that in mind,
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what's the mindset shift
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that you think execs in the SAF industry need to take
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to kind of get us closer to where we're aiming to be?
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We just need to stop debating.
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We need to recognize that
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we're over a hurdle.
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We have mandates out there.
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We just now need to deliver against them.
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So let's stop arguing about
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whether the mandates are perfect.
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But, yeah, how are we going to make this happen?
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Brilliant. Well, great closing thoughts.
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Thanks so much for taking the time
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and being with us.
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Thank you.
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(bright music)