Sustainable aviation biofuel Boeing recognizes that pollution and climate change are serious issues that require credible actions and global solutions. Boeing is working with the global aerospace industry – including our suppliers, customers and competitors – to develop innovative solutions for a more sustainable future. Julie Felgar Managing Director, Environmental Strategy and Integration Boeing Commercial Airplanes May 6, 2015

More people, in more countries, are traveling by air Aviation is expanding around the globe Other Middle East China Asia Pacific (excluding China) I think this is a remarkable chart, because it shows you how dramatically our world has changed in the past 20 years and how much it continues to change. Globalization has reshaped the landscape – and air travel goes right along with those shifts. Simply put, aviation is expanding throughout the world - to become an integral part of life in more countries and regions. - 20 years ago (1993), more than 73 percent of all traffic was carried by airlines in Europe or North America (that is, mainly the United States). Last year, about 50 percent of traffic was in Europe and North America. By 2033, that proportion will shrink to 38 percent. This is not because air travel is shrinking in the US and Europe – to the contrary! Aviation continues to grow there, but it’s a smaller slice of a much larger pie, because aviation is growing so rapidly in the rest of the world. Asia Pacific – especially China - and Middle East airlines are becoming prominent in global aviation. The low-cost business model is becoming a viable option in emerging markets, offering consumers access to a wider range of destinations and the opportunity to choose the speed and convenience of flying over traditional modes of transportation. You can see passenger traffic in China here, the dark red square – 20 years ago, it was a fraction of what it is today. This is because there are now 300 million people in China’s middle class. Last year, about 300 million passengers flew on airplanes in China. In 20 years, that number will reach 1.5 billion passengers! In addition, modern twin-aisle airplanes enable smaller operators in developing economies to compete on longer routes traditionally dominated by foreign carriers. Europe 38% 50% North America 73% SOURCE: Boeing 2014 CMO, Revenue Passenger Kilometers in billions

Global greenhouse gas emissions Aviation Other waste Other energy Industrial process Other transport 2010 Emissions Buildings & residential Land use Source: Direct and indirect emissions; calculated from IPCC WG III Assessment Report 5

Boeing Strategy for Reducing Emissions More efficient airplanes Baseline More efficient flight Sustainable fuels 2050 Carbon Neutral Timeline CO2 Emissions 2005 Forecasted emissions growth without reduction measures Use less fuel Efficient airplanes Operational efficiency Change the fuel Lower life cycle CO2 No infrastructure modifications “Sustainable Biofuel”

Aviation Needs “Drop-In” Biofuel New ways to make the same fuel Blended directly with petroleum jet fuel Meets or exceeds performance standards of petroleum NO change to airplanes, engines and fueling infrastructure When we consider the options for lower emission energy sources, aviations alternatives are quite limited. We have the unique challenges of needing high energy density because of the physics of flight AND globally compatible infrastructure. We have to be able to take off in Bangkok and land in London, fuel up on both ends, and do so without adding complexity to an airline’s operations. When we consider the alternatives that can do this, the only realistic option is alternative liquid fuels. CNG (compressed natural gas) doesn’t meet our infrastructure goals and there are environmental concerns about natural gas. For commercialization viability, sustainable biofuel must have equal or better energy content than traditional fuels and must work in today’s and tomorrow’s airplanes and fueling infrastructure without changes. 5 5

Sustainability is required Sustainably produced aviation biofuel reduces CO2 emissions by 50-90% on a lifecycle basis Strict criterial measured by NGOs Net emissions reduction No adverse impact to food, fresh water, land resources Positive socio-economic impact Strong demand by major airlines Strict sustainability criteria measured by NGOs Powers sustainable growth and economic development

Status of aviation biofuel industry Technically viable In demand Sufficient supply 3 types approved by ASTM International since 2011 High quality standard Airline support More than 1,600 commercial flights Continued military interest Refinery capacity small Price premium Limited sustainable feedstock Military interest – Farm to Fuel, legislative authorization to work with USDA… but price is key. 7 Technical success and growing demand…but supply challenged

What will come first? Scale? Price? Increased supply? Lower price?

Boeing’s global biofuel activities German collaboration Nordic Initiative for Sustainable Aviation Air China test flight, Hainan Airlines passenger flight Midwest Biofuel Initiative Boeing Research Collaboration Virgin Atlantic LanzaTech Gutter Oil Collaboration BIOJet Abu Dhabi with Etihad Japan Biofuel Roadmap Pacific Northwest Roadmap Renewable Fuel Standard Advocacy Green Diesel Commercialization Malaysia Smallhold Farm Initiative You’ve heard what’s happening and what’s necessary to develop more – and more affordable – biofuel for aviation. This map shows how Boeing is involved around the world to do that. To point to some of these intiatives: In the US, we work in the Pacific Northwest to make biofuel out of leftover wood products. In Brazil, we worked with stakeholders to roadmap a biofuel supply chain, worked with technology company Amyris and the fuel company Total to get the new plant sugar-based biofuel farnesane approved, and collaborate with our customer GOL to incorporate the fuel into their operations. In South Africa, we are working with South African Airways and the Dutch company SkyNRG to develop an aviation biofuel supply chain using a new hybrid tobacco plant that produces energy rather than cigarettes. Also in South Africa and in Southeast Asia, we are working with the Roundtable on Sustainable Biomaterials to engage smallholder farmers to grow sustainable aviation biofuel crops. In China, we have a collaboration with our competitor, COMAC, to turn waste cooking oil – known as gutter oil – into jet fuel. NISA – Nordic Initiative for Sustainable Aviation – includes Sweden, Norway, Finland, Denmark and Greenland (Greenlandair is part of NISA) Brazilian Biojetfuel Platform UAE Halophyte Pilot Project GOL Biofuel Flights South African Airways, SkyNRG Biofuel Collaboration SAFUG support Joint Research Center with Embraer Australia Biofuel Roadmap 9

Green diesel: biofuel breakthrough Currently used for ground transportation Chemically similar to “HEFA” aviation biofuel approved in 2011 Reduces CO2 by 50-90%, according to Neste Oil 1.2 billion gallons production capacity in US, Europe and Asia Price approaches Jet A, including government incentives Boeing tested a 15% green diesel blend with the ecoDemonstrator (2014) Talk about why this was important and how it will support industry approval of the flight tests. You will probably be asked how soon we expect green diesel approval. Key Differentiation (Unique or Never Done) 15% blend to be flown on the 787 platform in support of moving forward on certification of the fuel Green diesel approval would be a major breakthrough in the availability of competitively priced, sustainable aviation fuel Collaborating with our industry partners and the aviation community to move this solution forward and reduce the industry’s reliance on fossil fuel Environmental Benefit (Problem, Solution) Reduced GHG emissions Produced sustainably, without adverse impact to greenhouse gas emissions, local food security, soil, water and air. green diesel production capacity could supply as much as 1 percent - about 600 million gallons - of global commercial jet fuel demand Abstract (What and How It Works) Boeing researchers performed analysis that found green diesel, which is made from oils and fats, to be chemically similar to today’s aviation biofuel. If approved, the fuel could be blended directly with traditional jet fuel. Green diesel, also called “renewable diesel,” can be used in any diesel engine. It is chemically different and a different product than the fuel known as biodiesel. When Will It Be Commercialized? Upon approval

Many feedstocks will provide biofuel Biomass Oils Used cooking oil Inedible corn oil Jatropha Halophytes Tobacco Ag residues Switchgrass Farmed trees Halophytes Tobacco Other Plant Sugars Sugar cane Sugar beets Algae Municipal solid waste Waste gases

Fuel approvals will further expand supply Fischer-Tropsch HEFA (2011) Direct fermentation of sugar (2014) Approved Near-term approval Green Diesel Alcohol to jet (isobutanol) Hydrotreated depolymerized cellulosic Some fuels are oxygenates: biodiesel. Some are hydrocarbonates, which don’t have oxygen. HEFA: take feedstock (plant oils, animal fat) put it into the processing method. Shoot hydrogen at it to break off oxygen molecules. You are left with molecules that are hydrocarbons, including jet fuel Direct fermentation of sugar: It’s our understanding that technical committees have reviewed and approved this biofuel for use in aviation, using a processing technology from Amyris. We expect this will be announced in the near future. Direct fermentation of plant sugar: feedstocks include sugar cane, salicornia – many plants would apply. The cellulose gets converted into fuel. Processing technology takes the plant sugar, adds a special type of yeast, some heating…. The process produces hydrocarbon – which is fuel - rather than alcohol. Green diesel – Feedstocks are plant oils (used cooking oil) and animal fats. It uses the same processing method as HEFA but involves less processing then HEFA-produced jet fuel. Alcohol to Jet – Feedstocks are plant sugars. You use conventional yeast to produce alcohol. Fuel processing treats the alcohol to remove the oxygen, which converts the molecules into hydrocarbon, which is fuel. Hydrotreated depolymerized cellulosic: Feedstock focus currently is wood chips… Kior’s process is to use pyrolosis: you heat plant matter without oxygen, under pressure. This change sthe chemistry of the feedstock into what’s called “bio-crude oil”. This bio-crude oil is then hydrotreated into fuels, including jet fuel. Catalytic hydrothermolysis – Take feedstock, water and a catalyst… this is heated (not as hot as pyrolysis) and under pressure, converts biomass into biocrude. Catalytic oil – Atmospheric pressure on plant oils, at high temperature. Catalytic sugar - ??? Alcohol to jet (ethanol) Longer term Catalytic hydrothermolysis Catalytic oil Catalytic sugar Alcohol to jet (ethanol)