Delta Air Lines aims to be net zero by 2050. Achieving this goal requires investment in technologies, strategic partnerships and the use of sustainable aviation fuel (SAF). In this episode of the ESG Currents podcast, BI analysts Eric Kane and Margot Wentzel are joined by Amelia DeLuca, chief sustainability officer at Delta, to discuss how airlines can transition to net zero by weaving sustainability into the fabric of the business. DeLuca emphasizes her focus on data analysis and allowing data to inform company carbon-reduction strategies, as well as using it to drive change inside and outside of Delta.
This episode was recorded on June 3.
ESG has become established as a key business theme as companies and investors seek to navigate the climate crisis, energy transition, social mega trends, mounting regulatory tension, and pressure from other stakeholders. The rapidly evolving landscape has become inundated with acronyms, buzzwords and lingo, and we aim to break these down with industry experts. Welcome to ESG Currents, your guide to navigating the evolving ESG space, one topic at a time, Brought to you by Bloomberg Intelligence, part of Bloomberg's Research department, with five hundred analysts and strategists working across all major world markets. Our coverage includes over two thousand equities and credits, as well as outlooks on more than ninety industries and one hundred market INDEXES, currencies and commodities. I'm Eric Kaye, director of ESG Research for Bloomberg Intelligence.
And I'm Margot Wenzel, an ESG associate with BI and we are your hosts for today's episode. Today we are talking with Emilia de Luca, who is the chief sustainability officer for Delta Airlines. We'll talk about what sustainability means at Delta, the role that Delta is playing in the advancement of sustainable aviation fuel or SAFF, and how Delta is planning the next and mandatory phase of the carbon Offsetting and Reduction Scheme for international aviation. Amelia, welcome to the podcast, and thank you so much for taking the time to join us.
Thank you for having me. Margo and Eric look forward to the conversation.
So to kick us off, I know you have spent seventeen years at Delta in various roles on your path to becoming CSO in twenty twenty three. For our listeners who are interested in pursuing careers in corporate sustainability, could you tell us a little bit about your journey to becoming CSO and maybe if you have some tips for them.
Sure? Absolutely well.
First off, if you have a chance to be part of sustainability in any capacity, highly recommended.
This is a dream job that.
I didn't even know existed until a number of years ago, and I'm so happy to be part of the CSO contingent that is just really trying to get this started. As we have the generation behind us coming that we'll be just ready to go and solve some of these really hard problems. I have been in the aviation industry since I graduated from college. I graduated with a math degree and then essentially kind of moved all over the world learning and getting to contribute to different parts of Delta, from an analytics roles to sales, to revenue management, to network to alliance partnerships. And I think the thing that ties them all together is each one of the areas that I've worked in was a business imperative, much.
Like the way that sustainability is.
And so it's about figuring out how you take that part of the business and tackle it and weave it into Delta's at Delta's fabric so that it exists, you know, long after you are in the position. And I had a proven track record of solving hard problems, you know. I ran call centers during the pandemic. I was the first Delta expat that moved to Mexico City when we started our relationship with Aero Mexico. And so to me, just getting to be on the forefront of a challenge and the way that I am right now with sustainability is something that's not uncommon in.
My career and actually where I prefer to be.
I like taking things that are hard and don't have really clear answers, but you know, bringing people together and studying the data and putting a little bit of purpose and structure behind it, and then just figuring out how we move forward sustainabily.
Is also a big part of my personal life.
I would be I would be way off if I didn't mention that my husband's actually been in the sustainability field for at least a decade, long before it was cool. As I say, so, he is really the reason I am here.
I was inspired by him.
Excellent, And when I think about Delta and also the broader airlines industry, it seems like over the past five years or so, there has really been this heightened focus on sustainable We've seen several new net zero targets, increased disclosure, a lot more partnerships around saff and also other technologies. What does sustainability look like at Delta?
Specifically, sustainability at Delta is divided into two but very intermixed areas.
So the first is we have a really.
Transparent and robust decarbonization pathway that focuses on what we fly, how we fly, and the fuel we use to advance towards our net zero goals. At the same time, though, we look beyond fuel to every part of our business to reach our net zero targets and to make sure that we are being good stewards of the Climate agenda, and that includes things like electrification of our ground sport equipment or reducing waste through our operations. And so when we talk about sustainability at Delta, it really is, you know, laser focused on jet fuel because ninety percent of our impact or ninety percent of our emissions come from jet fuel.
But at the same time, we're consumer brand.
We transport you know, hundreds of millions of customers every year, and so we also want to showcase on board the best of the best when it comes to sustainability innovations.
Super interesting. So, Amila, you mentioned the idea of, you know, tackling an issue like sustainability and working to weave it into the fabric of the business. I imagine at a company like Delta this can be a challenge at times. So I'm curious ultimately how you engage with different parts of the business and ultimately kind of mobilized for change, you know, given the fact that I'm sure across Delta, people are focused on things other than decarbonization. For example.
Yeah, So one of.
My favorite examples to talk about is Delta's Carbon Council, which was created three years ago and is tasked with essentially saving fuel every single day in how we operate, and we call that fuel efficiency.
So we're still going to use jet fuel, but.
You know, managing it and optimizing it so we use you know, less today than we used yesterday in terms of you know, the efficiency side, in terms of the number of customers.
And seats that were flying it at any given point.
That's truly cross functional across our operations divisions, and it's stepping back and essentially saying, well, first off, what are we going to do? And this group Carbon Council is signed up to save ten million gallons of jet fuel every year incrementally through twenty thirty five, which would be one point one billion gallons of jet fuel saved by this council, which is incredible, and they're well underway. They helped save twenty one million gallons of jet fuel to date through things like weight provisioning, enhanced routings, and more. I think the second thing that goes hand in hand with the operational groups is finance and for us, I don't want to say real lucky because we are hard to decarbonize and there is no alternative for jet fuel right now, but we're lucky that when we go and tackle our emissions from jet fuel, it's also tackling one of our largest cost drivers.
And so we work really.
Closely with our finance division all the way up through our CFO to show how sustainability is not just good for the planet, it's also really good for Delta's business. And that's how we're getting these unlocked through Carbon County is my team works with those to identify opportunities. We will often fund the pilot project or will help get the data behind the business case, and then when it makes good business sense, then we transition into the business and then it just makes good business sense, and then the operators execute on it the way that they do so well and everything else that they do at Delta, and I just think this is a really great example. As sustainability professionals, we can't own the solution from start to finish. We have to at some point take it and really move it into the business, and Delta is doing this every day.
Through Carbon Council.
Awesome. And I know that you mentioned you have a degree in math and that you like to solve hard problems. So someone with that data and math background, I know you probably emphasize the importance of data analysis. So how are you utilizing those skills to connect carbon ambition with technological feasibility, especially when some of these transition plans for airlines are predicated on nascent technologies such as as hydrogen planes electric aircraft.
Well, data is what unlocks everything when it comes to sustainability.
Data and science and those things go hand in hand.
The science proves out what the right solutions are and uses data to really be the source of all truths to say what is the right action. And So while we're working to scale sustainble aviation fuel and I know we'll come back to that because that's the single biggest lever that Delta has right now, we're also exploring every pathway when it comes to decarbonization from both the short term items that we can execute today through Carbon Council, where we use data to help build into the business, build the business case, and help make sure those business cases are prioritized to studying electric aircraft with our eb tall partner, Jobe Aviation, or the feasibility of green hydrogen with Airbus, and that includes a new study we just announced with Airbus plug power in the Atlanta Airport to better understand infrastructure needs. The whole point is those studies use data to say whether or not that is the right path forward, and until we have that data at Delta, we don't believe in taking anything off the table. The other thing that data helps us do is just make sure we are balancing our agenda with other key items at Delta. So safety is paramount at Delta, and at Delta, safety is first always the same thing as running a world class operation, and so we use data to try to build in and model in the system that we're making changes for sustainability. That obviously is safety and an on time and reliable operation is number one and number two in terms of the importance for Delta, but that we can model out and say that yes, we can also take this action and will have no you know, it will only have the benefits that we think it's going to have in terms of fuel efficiency or fuel savings. Are other things that are out there to benefit the planet, and so operating safely and securely is non negotiable, but then you can use data to back up and say yes.
But also and there's an and behind that absolutely.
So, Melly, you mentioned, of course that we'll follow up on the topic of SAF, so I wanted to do that. I'm curious to hear ultimately you just gave a couple of examples, but if you could maybe expand on ultimately how the company is supporting the development of SAF and really you know, planning for the future, given as you mentioned that that is essentially the lever for decarbonization or the primary lever for decarpensation for the airline industry.
Yeah, I think it's important to step back for a second and say why staff. So the first thing is when we talk about our pillars of decarbonization, it's what we fly, how we fly, and the fuel we use.
What we fly is pretty straightforward.
We can replace our aircraft just like someone can replace their car and get some fuel efficiency gains. But those are you know, they're twenty to thirty percent, which is huge, but you know, those are really expensive assets. We typically like to fly those as long as possible. They're scarce right now, more than anything else. But they will still only get you twenty thirty percent better, and there's diminishing returns on that today how we fly, as I mentioned again, we're doing every single thing that we can to walk down our fuel footprint in terms of how we operate. But even with those two items, you can only get about halfway there to that zero. So the remaining advancement towards you know, a zero emission's future is going to need to come from sustainable aviation fuel. Sustainab aleiviation fuel is really exciting. However, there isn't enough staff to fuel global demand for a single week, and I think in particular there is a lot of scaling up right now. But as an industry, we're learning a lot about what doesn't work, either in terms of the financing of a new saff production facility or in terms of you know, the best decisions in terms of the feedstocks that go in and the technologies.
That are going to be used.
And so it's a period of innovation which is exciting. Sometimes I think it feels like it's never going to be here, but we have these little green shoots. You know, we doubled the amount of staff that we used last year. I will say that it's still very very small versus our four billion gallon jet fuel footprint, but you can start to see the momentum.
And the other thing that's great about SAFF is it's.
A fully industry aligned lever, so all airlines around the world, no matter what region you operate in, you're looking at SAFF, you're bringing SAFF on board, you might be looking at slightly differently in terms of you know, how you're expecting it to scale, but all airlines globally are looking at staff, which makes it a really collaborative item, kind of like safety. And when you've got all airlines pulling in the same direction, that's why certain things can get done.
A couple other things I'll just mention about SAFF right now.
The major first marker is that in twenty thirty we aim to have replaced ten percent of our jet fuel with sustainable aviation fuel, and we're halfway there in terms of having that under contract, which is great. The second other positive I would say is that we have a lot of support from our corporate and cargo customers, and that is a really great thing because it allows companies to maybe have a carbon emissions footprint from their business travel to have an option so that they can continue to run their business through air travel, because we know that that's what powers so many businesses, but they too can also purchase sustainable aviation fuel to walk down their climate emissions footprint from business travel. So it's a win win for corporate and cargo, which is great, makes it even more collaborative, and then there's a lot of really interesting players getting in this space. Delta's got partnerships with SAFF producers both big and small, including Givo, who is probably one that's not known.
They're a new player in the space.
Neste, who's been around for a while, was one of the first players in the sustainable aviation fuel market and has been a partner of Deltas for quite some time, and Shell.
So some names you know and some new ones. I think.
The one more thing I would say on SAFF though, is, as I mentioned it, it's been challenging to get it to scale up.
So one thing that we're excited about at Delta is all eyes are on Minnesota for US.
Last August we announced a revolutionary coalition to scale sustainable aviation fuel there. And you may say, well, why Minnesota, What first and foremost has got all the ingredients to create sustainable aviation fuels. So there are many feedstocks and many technologies, but one that is most promising is to essentially take the ethanol industry, which you know is modeled to show a decline based upon the electrification of vehicles, and to start to point ethanol towards a liquid, sustainable aviation fuel product. So Minnesota's got a robust ethanol market, which sets it up for success, but it also sets it up in the future because you've got access to renewable energy in Minnesota, You've got access to captured carbon, which are feedstocks that.
Can go into future synthetic fuels.
You've also got most importantly just incredible players up there, with a lot of support from the Governor's office, to the Greater Minneapolis Economic Development Arm, to the Bank of to Bank of America, Eco Lab, Excel Energy. So this first large scale SAFF HOUB of the United States, we believe will create the playbook.
For how we scale SAFF in the United States going forward.
And maybe another question on SAFF, but producers of SAFF are now eligible for tax credit if SAFF achieves emissions reductions of at least fifty percent, making corn based ethanol eligible. What does this mean for you in how you're calculating your CO two targets? Is delta updating those with this new regulation.
Yeah, so, I mean back to what we talked about the beginning data sets you free, right, And that's no truer than when we're calculating life cycle for any product, whether it's sustainble aviation fuel, our product that we're putting on board as we want to make sure we really understand are we doing good by bringing this product into our sustainable ecosystem. So right now, our biggest focus on stabile aviation fuel is to get our hands on as much as possible, and if it achieves that fifty percent threshold or the incentives set in, then we are very open to it. We are open to any staff today that allows us to lower our footprint from where it's at today.
The thing about stambile aviation fuel that's.
Really exciting as well is that it's proven, it's safe, and it's drop in solution, and so we just keep coming back to the point we just need more of it.
We just need more of it. There's not enough available.
So again, if you achieve that carbon reduction of fifty percent, which is what makes it eligible for both federal and.
State level incentives.
That is great, and then we build that transparently into our reporting so you can see the carbon emissions productions that come from our saff You can see it built into our reporting macanism so that people can see exactly how much carbon is reduced.
So Margo and I have done a fair amount of research on the airlines industry and decarbonization, and we have a product called bi carbon where we're essentially, you know, forecasting emissions for certain companies across the most carbon intensive industries, trying to understand, you know, where they'll be relative to a temperature line benchmark in twenty thirty, twenty fifty. And one of the things, of course, that we come up against in our research on the airline's industry specifically, is yet another acronym that populates the the ESG space, and that acronym is CORSIA. So Corsia, for those listeners who don't know, is the carbon offsetting and reduction scheme for international aviation. So my question, Amelia, is what CORSIA is and ultimately what it means for Delta right now and what you see it meaning for delta kind of the in the near future.
So corsia, and I'm glad Eric we took a moment to also define what it is, because some of us that use a day in and day out sometimes forget that the whole world doesn't know what corsia means. But CORSIA is, essentially, as you mentioned, it is a it's a global scheme meant to lower emissions from international flights to help the aviation sector essentially reduce.
Its impact on climate change.
And what is interesting about CORSIA is that it is truly global by nature, and so the industry.
Is aligned and rallied around behind it.
There's a there's an international body called the International Civil Aviation Organization IKO that essentially governs this. Listeners, you don't need to remember these terms, by the way, but the point is we're a little bit different because we fly everywhere around the world and we don't We can't just contribute our emissions to a country the way other companies can. When you think about the Parents Agreement, right, and it's really country specific. Aviation and Maritimes sit kind of different, right. Our emissions are keen places, and so how would you attribute it? And so CORSIA steps in to try to address that, to say that this is the scheme that will govern global emissions and that the industry has signed up for and that various governments around the world have both collaborated to create as well as to support, and so it allows us to be able to as an industry again to show our commitment to doing our part as well as to have a system that allows us to report out on our emissions annually as an industry. And that's an important part of this right now, more than anything else, is just to showcase that we are transparent as an industry about our emissions footprint, both now as well as where we're going in the future because we are a growth industry. Frankly, rightline, the airline industry is expected to continue to grow.
Because it has such benefits around the world.
But with that we all are also committed to doing our part and so that's what CORSIA allows us to do.
Yeah, So, as you mentioned, CORSIA is a sector specific, market based measure and takes a very cooperative approach to reducing sector emissions. How important do you do you think it is to have a global or industry focus when it comes to the carbon transition.
This is actually my favorite part of my job is how collaborative the spaces for the airline industry. We believe a delta that a rising tide lifts all boats, especially in this space, we have to be working together. We have to be trying to solve the same problems and more or less narrowing in on those solutions.
And what Corsia and many other.
Industry bodies of work do is start to put into the forefront that yes, we can bring down our footprint today and many airlines are in the industry has brought down its footprint already to date in terms of bringing on new fleet and bringing on.
New operating procedures.
But staff is agreed upon to be the single most important lever and we're going to continue to advance that industry forward across the globe. And the collaborative approach just ensures that we have the right support from governments, from corporations, from cargo customers, and really from each other to make sure that the policies are in place to be able to scale sustainably aviation fuel.
I love the idea of a rising tide lifts all boats and think that's a phrase that I'll borrow if that's okay. I think it's also a great way to end the episode on an optimistic note and perhaps a note that I wish other industries would follow in terms of bringing governments, corporates, customers, and more together to address the daunting task of decarbonization. And speaking of decarbonization, you can find more information on the topic, including our airlines carbon forecast, Carbon target, credibility Assessment and Decarbonization Report by going to the Environmental tab and the BI Carbon subtab of our dashboard bispace ESG go on the Bloomberg terminal, and as always, if you have an ESG quandary or burning question you'd like to ask bi's expert analysts, send us an email at ESG Currents at Bloomberg dot net. Thank you very much, and we'll see you next time.