  {"id":12861,"date":"2016-11-04T17:03:01","date_gmt":"2016-11-04T21:03:01","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/dragons-in-the-sky-somewhere-between-sao-paulo-and-rio\/"},"modified":"2016-11-04T17:06:31","modified_gmt":"2016-11-04T21:06:31","slug":"dragons-in-the-sky-somewhere-between-sao-paulo-and-rio","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/dragons-in-the-sky-somewhere-between-sao-paulo-and-rio\/","title":{"rendered":"Dragons in the Sky \u2013 somewhere between Sao Paulo and Rio"},"content":{"rendered":"<p><strong>What flies and spits fire at the same time? That\u2019s right: airplanes.<\/strong><\/p>\n<p>Aircraft are major emitters of greenhouse gasses and reducing these emissions poses a challenge to airlines, regulators, and manufacturers. How will Brazilian aircraft manufacturer Embraer react to this changing environment? What steps have they taken to become more eco-friendly and not be left behind in this new competitive scenario?<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Why should we care about airplanes?<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-12799\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions-300x150.jpg\" alt=\"flying high. Commercial jet at altitude\" width=\"300\" height=\"150\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions-300x150.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions-768x384.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions-1024x512.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions-600x300.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/airline-emissions.jpg 2000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>If you ever hopped on a plane and flown across the world to go on that perfect vacation, I\u2019m sorry to tell you that flying probably accounts for a relevant part of your carbon footprint. The average American will generate 19 tons of CO2 in a year [2] \u2013 the worldwide average is about 5 tons per year [3], whereas flying round-trip from New York to Europe will generate an effect equivalent to 2 to 3 tons of CO2 per passenger [2]. Commercial flights alone are estimated to produce 700 million tons of CO2 per year [1] \u2013 about 2% of total world emissions.<\/p>\n<p>Current levels of emissions originated from flying are high, but estimates are that this number could triple by 2050 [4]. Specific studies point out that the temperature increase caused by aviation alone could be of 0.03<sup>o<\/sup>C by 2050 [6]. It comes as no surprise, then, that governments and international agencies have already started suggesting and enforcing regulations on greenhouse gas emissions from airplanes [4] [5].<\/p>\n<p>In a world where emissions are controlled and regulated, aircraft manufacturers that fail to adapt to the new reality might be headed for disaster. On the flipside, producing \u201cgreener\u201d planes will provide an edge over their competitors. Companies can achieve that in basically two ways:<\/p>\n<ul>\n<li>Use cleaner energy<\/li>\n<li>Produce airplanes that are more energy efficient (added benefit of cost reductions for operating the airplane)<\/li>\n<\/ul>\n<p>Going about achieving these goals requires R&amp;D spend and can be done in-house, through partnerships &#8211; with other companies, universities, institutes etc. \u2013 or through acquisitions &#8211; of either companies or just patents or technologies.<\/p>\n<p>The decision of which strategy to pursue will hinge on the company\u2019s internal capabilities and resources.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Why do we care about a company in \u201cI-don\u2019t-know-where\u201d, Brazil?<\/strong><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-12840\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4-300x169.jpg\" alt=\"6638c8_c83da5b56c524b7c8cc10040609109b4\" width=\"300\" height=\"169\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4-300x169.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4-768x432.jpg 768w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4-600x338.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/6638c8_c83da5b56c524b7c8cc10040609109b4.jpg 782w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Sao Jose dos Campos is the foremost Brazilian aerospace and defense hub, including the Brazilian Space Research Institute, the Institute of Aeronautics and Space, the Aeronautics Institute of Technology (<em>ITA<\/em>), defense companies Avibras and Mectron, and the third-largest commercial airplane manufacturer in the\u00a0world, Embraer [15]. You might have flown in one of Embraer\u2019s airplanes and not know about it [16].<\/p>\n<p>This also happens to be the city where I grew up and where my family still lives. I have also earned my degree in aeronautical-mechanical engineering in the city &#8211; at ITA, even though I have never worked in this field.<\/p>\n<p>Embraer focuses on the medium size and executive airplane segments, selling its airplanes to more than 90 airlines in more than 60 countries. It\u2019s safe to say, then, that their clients will be impacted by some form of carbon regulation sooner rather than later.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>What have they been doing?<\/strong><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Embraer_195_521500_i0.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-12849\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Embraer_195_521500_i0-300x126.jpg\" alt=\"embraer_195_521500_i0\" width=\"300\" height=\"126\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Embraer_195_521500_i0-300x126.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Embraer_195_521500_i0.jpg 475w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Embraer created its Environmental Department in 2007 [8], and has been investing in energy efficiency and green fuel development, mainly through partnerships. Partnering makes sense given Embraer\u2019s tiny R&amp;D budget compared to competitors: $40 million compared to $3 \u2013 4 billion for Boeing and Airbus [11] [12] [13].<\/p>\n<p>Embraer\u2019s advances in wing design and avionics have contributed to energy efficiency, but, without the collaboration of turbine manufacturers, the impact will most likely be limited.<\/p>\n<p>In 2009, a partnership was established with GE (turbine manufacturer), Azul airlines and Amyris [17] to develop renewable aviation fuel primarily based on sugar cane ethanol, leveraging Brazil\u2019s natural resources &#8211; world\u2019s greatest producer of sugar cane &#8211; and expertise in this matter (e.g. 92% of cars produced in Brazil ran on both gasoline and ethanol in 2013 [20]).<\/p>\n<p>In 2011, in partnership with GE, Embraer completed flight tests under a variety of different conditions with an E170 aircraft powered by hydro-processed esters and fatty acids [9] [10]. In 2012, an E195 of Azul Airlines successfully flew using bio kerosene made from sugarcane, produced by Amyris [9].<\/p>\n<p>This could be an important step towards emission reduction, given the estimate that \u201csustainably produced aviation biofuel emits 50 to 80 percent lower carbon emissions through its life cycle than fossil jet fuel.\u201d [7]<\/p>\n<p>In 2012, a partnership began between Embraer and Boeing [9], which has yielded development and tests in biofuel, LIDAR technology and other features such as \u201cice-phobic\u201d paint [7] by 2016.<\/p>\n<p>Even though they have been acting, Embraer could increase R&amp;D spend to attempt to develop some of the innovations in-house (Embraer spends 0.7% of revenues on R&amp;D [11] vs 3.4% for Boeing [12] and 5.4% for Airbus [13]).<\/p>\n<p>As the \u201cunderdog\u201d company, with much less money than competitors, Embraer needs to use ingenuity to its advantage, a strategy that has served them well for in the past [18].<\/p>\n<p>&nbsp;<\/p>\n<p>(775 words, excluding references)<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>[1] \u201cScience Magazine\u201d, June 12, 2015,<\/p>\n<p><a href=\"http:\/\/www.sciencemag.org\/news\/2015\/06\/us-move-regulate-greenhouse-emissions-aviation-puts-international-rules-runway\">http:\/\/www.sciencemag.org\/news\/2015\/06\/us-move-regulate-greenhouse-emissions-aviation-puts-international-rules-runway<\/a><\/p>\n<p>[2] \u201cNew York Times\u201d, Jan 26, 2013,<\/p>\n<p><a href=\"http:\/\/www.nytimes.com\/2013\/01\/27\/sunday-review\/the-biggest-carbon-sin-air-travel.html\">http:\/\/www.nytimes.com\/2013\/01\/27\/sunday-review\/the-biggest-carbon-sin-air-travel.html<\/a><\/p>\n<p>[3] \u201cWorld Bank\u201d<\/p>\n<p><a href=\"http:\/\/data.worldbank.org\/indicator\/EN.ATM.CO2E.PC?year_high_desc=true\">http:\/\/data.worldbank.org\/indicator\/EN.ATM.CO2E.PC?year_high_desc=true<\/a><\/p>\n<p>[4] \u201cNew York Times\u201d, Feb 8, 2016,<\/p>\n<p><a href=\"http:\/\/www.nytimes.com\/2016\/02\/09\/business\/energy-environment\/un-agency-proposes-limits-on-airlines-carbon-emissions.html?_r=0\">http:\/\/www.nytimes.com\/2016\/02\/09\/business\/energy-environment\/un-agency-proposes-limits-on-airlines-carbon-emissions.html?_r=0<\/a><\/p>\n<p>[5] \u201cNew York Times\u201d, June 10, 2015,<\/p>\n<p><a href=\"http:\/\/www.nytimes.com\/2015\/06\/11\/business\/energy-environment\/epa-says-it-will-set-rules-for-airplane-emissions.html\">http:\/\/www.nytimes.com\/2015\/06\/11\/business\/energy-environment\/epa-says-it-will-set-rules-for-airplane-emissions.html<\/a><\/p>\n<p>[6] Sausen, R. &amp; Schumann, U. Climatic Change (2000) 44: 27,<\/p>\n<p><a href=\"http:\/\/link.springer.com\/article\/10.1023\/A:1005579306109\">http:\/\/link.springer.com\/article\/10.1023\/A:1005579306109<\/a><\/p>\n<p>[7] Boeing Website, July 7, 2016,<\/p>\n<p><a href=\"http:\/\/www.boeing.com\/features\/2016\/07\/embraer-ecodemonstrator-07-16.page\">http:\/\/www.boeing.com\/features\/2016\/07\/embraer-ecodemonstrator-07-16.page<\/a><\/p>\n<p>[8] Embraer Website, October 31, 2007,<\/p>\n<p><a href=\"http:\/\/www.embraer.com\/pt-br\/imprensaeventos\/press-releases\/noticias\/paginas\/embraer-cria-diretoria-de-meio-ambiente.aspx\">http:\/\/www.embraer.com\/pt-br\/imprensaeventos\/press-releases\/noticias\/paginas\/embraer-cria-diretoria-de-meio-ambiente.aspx<\/a><\/p>\n<p>[9] Embraer Website, Jan 14, 2015,<\/p>\n<p><a href=\"http:\/\/www.embraer.com\/pt-BR\/ImprensaEventos\/Press-releases\/noticias\/Paginas\/Boeing-e-Embraer-inauguram-centro-de-pesquisa-em-biocombustiveis-no-Brasil.aspx\">http:\/\/www.embraer.com\/pt-BR\/ImprensaEventos\/Press-releases\/noticias\/Paginas\/Boeing-e-Embraer-inauguram-centro-de-pesquisa-em-biocombustiveis-no-Brasil.aspx<\/a><\/p>\n<p>[10] MIT Laboratory for Aviation and the Environment,<\/p>\n<p><a href=\"http:\/\/lae.mit.edu\/fueling-the-future-of-flight\/\">http:\/\/lae.mit.edu\/fueling-the-future-of-flight\/<\/a><\/p>\n<p>[11] \u201cEmbraer 2015 Annual Report\u201d, page 7,<\/p>\n<p><a href=\"http:\/\/ri.embraer.com.br\/list.aspx?IdCanal=raizxNueT5FGW442\/D1BFg\">http:\/\/ri.embraer.com.br\/list.aspx?IdCanal=raizxNueT5FGW442\/D1BFg<\/a>==<\/p>\n<p>[12] \u201cBoeing 2015 Annual Report\u201d, page 3,<\/p>\n<p><a href=\"http:\/\/s2.q4cdn.com\/661678649\/files\/doc_financials\/annual\/2015\/2015-Annual-Report.pdf\">http:\/\/s2.q4cdn.com\/661678649\/files\/doc_financials\/annual\/2015\/2015-Annual-Report.pdf<\/a><\/p>\n<p>[13] \u201cAirbus 2015 Annual Report\u201d, page 2,<\/p>\n<p><a href=\"http:\/\/www.airbusgroup.com\/int\/en\/investors-shareholders\/Publications.html\">http:\/\/www.airbusgroup.com\/int\/en\/investors-shareholders\/Publications.html<\/a><\/p>\n<p>[14] Airbus Website,<\/p>\n<p><a href=\"http:\/\/www.airbus.com\/innovation\/future-by-airbus\/future-energy-sources\/\">http:\/\/www.airbus.com\/innovation\/future-by-airbus\/future-energy-sources\/<\/a><\/p>\n<p>[15] Embraer Website,<\/p>\n<p><a href=\"http:\/\/www.embraer.com.br\/pt-BR\/ConhecaEmbraer\/EmbraerNumeros\/Paginas\/Home.aspx\">http:\/\/www.embraer.com.br\/pt-BR\/ConhecaEmbraer\/EmbraerNumeros\/Paginas\/Home.aspx<\/a><\/p>\n<p>[16] \u201cThe Wall Street Journal\u201d, March 29, 2010,<\/p>\n<p><a href=\"http:\/\/www.wsj.com\/articles\/SB10001424052748704896104575140151650091716\">http:\/\/www.wsj.com\/articles\/SB10001424052748704896104575140151650091716<\/a><\/p>\n<p>[17] Embraer Website, November 18, 2009,<\/p>\n<p><a href=\"http:\/\/www.embraer.com\/pt-br\/imprensaeventos\/press-releases\/noticias\/paginas\/embraer-general-electric-azul-e-amyris-anunciam-projeto-de-avaliacao-de-combustivel-renovavel-para-jatos.aspx\">http:\/\/www.embraer.com\/pt-br\/imprensaeventos\/press-releases\/noticias\/paginas\/embraer-general-electric-azul-e-amyris-anunciam-projeto-de-avaliacao-de-combustivel-renovavel-para-jatos.aspx<\/a><\/p>\n<p>[18] Aviation Marketing Consulting, May 30, 2013,<\/p>\n<p><a href=\"http:\/\/www.aviationmarketing.aero\/2013\/05\/30\/embraers-simple-strategy\/\">http:\/\/www.aviationmarketing.aero\/2013\/05\/30\/embraers-simple-strategy\/<\/a><\/p>\n<p>[19] Embraer Website,<\/p>\n<p><a href=\"http:\/\/www.embraer.com.br\/pt-BR\/ConhecaEmbraer\/TradicaoHistoria\/Paginas\/default.aspx\">http:\/\/www.embraer.com.br\/pt-BR\/ConhecaEmbraer\/TradicaoHistoria\/Paginas\/default.aspx<\/a><\/p>\n<p>[20] Uol, March 19, 2013,<\/p>\n<p><a href=\"http:\/\/carros.uol.com.br\/colunas\/alta-roda\/2013\/03\/19\/motor-flex-celebra-dez-anos-presente-em-92-dos-carros-novos-do-pais.htm\">http:\/\/carros.uol.com.br\/colunas\/alta-roda\/2013\/03\/19\/motor-flex-celebra-dez-anos-presente-em-92-dos-carros-novos-do-pais.htm<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What flies and spits fire at the same time? That\u2019s right: airplanes. Aircraft are major emitters of greenhouse gasses and reducing these emissions poses a challenge to airlines, regulators, and manufacturers. How will Brazilian aircraft manufacturer Embraer react to this [&hellip;]<\/p>\n","protected":false},"author":2019,"featured_media":12862,"comment_status":"open","ping_status":"closed","template":"","categories":[1861,141,880,1366,1218,1226,55],"class_list":["post-12861","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-aircarft","category-biofuels","category-brazil","category-carbon-dioxide","category-climate-change","category-global-warming","category-technology"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Dragons in the Sky \u2013 somewhere between Sao Paulo and Rio - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/dragons-in-the-sky-somewhere-between-sao-paulo-and-rio\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dragons in the Sky \u2013 somewhere between Sao Paulo and Rio - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"What flies and spits fire at the same time? That\u2019s right: airplanes. Aircraft are major emitters of greenhouse gasses and reducing these emissions poses a challenge to airlines, regulators, and manufacturers. 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