Podcast | What Boards Need to Know About Energy and Renewables - with Alyse Mauro Mason and Meir Hasbani

Alyse Mauro Mason: Welcome to the Board Perspectives podcast, brought to you by Protiviti, a global consulting firm, where we explore numerous challenges and areas of interest for boards of directors around the world. I am Alyse Mauro Mason, and I help lead the ESG and Sustainability practice at Protiviti. I am beyond excited to be joined today by a teammate and a friend of more than 30 years Meir Hasbani.

Meir is a principal engineer and environmental strategist at EcoCira. His work focuses on helping companies navigate evolving climate policy, strengthening compliance frameworks, and helps translate complex technical and regulatory requirements into practical strategies for executives and board-level decision-making. Today, we are going to discuss ideas on energy markets, trade-route impacts and biofuels, as well as climate lawmaking.

We are joining you today in our personal capacity to share our experience, our expertise and our insights with all of you. Meir, welcome to the Board Perspectives podcast.

Meir Hasbani: Hey, thanks, Alyse. It’s a delight to be here. I’m excited.

Alyse Mauro Mason: I have to be honest — in this moment, I’m a bit overcome with joy because to think that over 30 years ago, we met as teammates in club swimming. We were together six days a week, four-plus hours a day. We grew up together. We became collegiate athletes together. We’re now both sustainability professionals and coming together to do this podcast.

Meir Hasbani: I remember meeting you when you guys moved from New York to Chicago. It was the day that our team went to Six Flags Great America. I met you at Six Flags, riding a roller coaster together before we ever did a practice together.

Alyse Mauro Mason: It was it was instant friendship. Moving from a city to a brand-new place, at that point, it was so welcoming to have that — and to think that we’re here today in the same profession, getting to have a different roller-coaster ride of industry-related talk about where we are as a world and a nation on sustainability-related topics. This is truly a full-circle moment, and I’m grateful that that we still have each other in each other’s lives.

Meir Hasbani: Yeah, it’s been fun to reconnect and talk about these interesting and impactful topics in energy and climate, and reminisce as well about our time together in swimming four hours a day.

Alyse Mauro Mason: A fun question I like to start with is, did you choose this line of work, or did it choose you?

Meir Hasbani: I’m not sure, because sometimes I think I chose it and sometimes I think it chose me. My first job out of college was as a facilities engineer in an oilfield up in the Central Valley of California. If you had asked me in college if I thought that that would be my first job, the answer would have been “Absolutely not.” But I moved to L.A., and I found that job and ended up loving it, so much so that I’ve made a career out of working in the energy industry and shifted that over time toward strategy and climate policy.

I fell into it right when I started. But I’ve chosen to remain in it because it’s such an interesting topic with so many important and impactful things to our everyday lives that I just love it. I think both — it chose me to start, and then I’ve chosen to continue in it, and now I’ve found it to be a meaningful and valuable career to be in.

Alyse Mauro Mason: I love that both can be true — to continue to choose something every day and to continue down a path that might have been paved for you at the beginning, but you continue to maintain that. Thank you for sharing that with me and with the audience.

Reflecting on our recent conversations, we talked about energy markets quite a bit, and you wrote an article recently on this topic, on March 5. A lot has changed since then, and although it’s a few weeks ago, a few weeks is almost like dog years. Our audience would love to hear from you on this topic. The reality is that the global economy runs on energy. Could you provide a brief overview of this and some insight into the current state of the energy markets?

Meir Hasbani: Let’s rewind. When you think about energy markets to early February, just before the war with Iran started, we were sitting in a very well-supplied energy market. We had crude oil trading in the low $60s, a really good and effective liquified natural gas supply chain moving into Europe, moving into Asia, where they don’t have natural gas production, a lot of investment going on, and excitement in growing the power sector in order to supply data centers. A lot of investment in renewables, wind and solar. Renewed interest in nuclear, and fairly cheap energy prices worldwide.

Two months later, here we are, and we’re thinking about things very differently. For background, about 20% of the world’s crude oil, and 20% of the world’s liquefied natural gas, flows out of the Strait of Hormuz on a daily basis. That’s about 20 million barrels of crude a day. When you restrict it and you pull it off the market, the first thing you see happen is an immediate spike in prices. You also see the producers try to find alternative ways to bring that energy to markets — the Saudis, the UAE, etc. have found alternate ways to bring crude to market — so we’re seeing an impact of about 10% of the world’s crude off market right now.

Here in the United States, we like to think of ourselves as producing more crude oil than we actually consume these days, but crude trades on a world oil-price market. So even though we don’t technically need to buy crude from anyone in order to supply the country, the price does reflect what the world is seeing.

That’s not true for natural gas. Natural gas is harder to ship and move around — you need to liquefy it in order to move it — so we’re seeing pretty modest natural gas prices in the United States still, whereas crude oil has really jumped.

Where we start to feel that roll through the economy is, first, it shows up in transportation fuels. Those prices are very obvious to all of us. Right away, we see those prices jump. But we’re actually seeing more of an impact in the distillate fuel — diesel and jet fuel. Those are not quite as obvious to us because most of us don’t drive these diesel cars, and most of us don’t fly airplanes, but we’re seeing a 30% increase in the price of gasoline in the in the U.S., and a 45% to 50% price increase in those distillate fuels. Those are the fuels that start to permeate into other goods in the economy. When someone manufactures or produces consumer goods, they need to move those to market through trucking, through other means, and that shipping cost is starting to increase.

The only way for those companies to recoup that money is to charge more for those products, so that’s where we might start to see these higher energy prices start to permeate in the U.S. economy, into consumer goods, and seeing things like shippers starting to increase fuel surcharges on shipping and airlines starting to reduce their flight schedules in order to save on jet-fuel costs because they can’t recoup all the jet-fuel costs.

We’re starting to see those types of moves permeate. We’re fortunate in the United States that I don’t think we’ll see any energy shortages, both because we can supply ourselves to a large extent and because we have such abundant natural gas production here that we’re exporting liquefied natural gas and the local natural gas is not pricing very high.

Also, many of us in the U.S. are fortunate that energy costs are not a huge component of what our total spend is. As this continues, where we might see some of the further impacts is in fertilizer, a lot of which is produced in the Middle East, and that will start to permeate into food costs.

We’re seeing some disruption to the world helium supply — and helium isn’t just used for party balloons. It’s a key coolant used in the manufacturing of microchips for computers and for AI data centers. That helium supply has become limited. That can start to permeate into that sector as well.

What happens when this war ends — because it will end eventually — and the strait reopens and the energy sector and other sectors that are impacted by it is that there is going to be a higher risk for energy prices, at least for a while. Governments and companies are thinking about this in the sense that they don’t want to get caught by the Strait of Hormuz closure or another energy crisis like this without the physical fuel available to them, and they might start to hold more inventory. Holding inventory in that market leads to a sustained higher price for energy and for the products that use energy to be produced, which is, functionally, everything.

What I’m going to be watching the energy markets as the war hopefully winds down soon and we get to a more normal shipping route for energy through the world is, ow do the prices settle back down, and do we get all the way back down to the well-supplied, well-sustained energy market we had in early February?

Alyse Mauro Mason: The specific sectors that are most vulnerable to this volatility — manufacturing, distribution, consumer goods and products — are there any others that we should be like homing in on the short-term and long-term impacts of this specific trade-route impact? This is not the first time, and it most certainly won’t be the last, unfortunately. What can people learn from this, and how can they prepare?

Meir Hasbani: The most direct impacts are to heavy users of energy, and transportation fuels and natural gas — the power sector, the airline sector, any manufacturing that uses a lot of energy: food, paper, chemicals, manufacturing, textiles and other things like that where you’re using a lot of energy. Those are the ones most immediately exposed to any energy shock because they are using so much energy. But it’s the long-term permeation of energy prices into the full economy, where even companies that don’t necessarily think of themselves as having a high energy footprint — a services company or an information technology company — where they’re buying utility energy for their buildings. The prices of everything start to rise when energy prices start to rise because the whole economy functions on energy, and the whole economy grows on cheap energy prices. That’s where I think about those impacts starting to hit people.

Alyse Mauro Mason: How can people prepare? You talked about things that are in your control and out of your control. If energy prices go up, how are people meant to react to that? When I say “people,” I mean companies and executives and boards that have to govern the strategy and the direction some of these impacts will have on the business and how they run their business. Is there anything tangible a board member or an executive at a company can say, “This is the lens in which we should be looking at this, and this is how we can learn from history, and this is how we can plan for the future?”

Meir Hasbani: Considering the number of energy shocks we’ve lived through, crude prices were very high in 2014, and then we had a shock, and then they dropped rapidly and they built up to a pretty high price again. And then we had negative oil prices for a day or two during COVID, and then they were at modest prices again. Then Russia invaded Ukraine and we saw a jump in energy prices again, and then we dropped again to a modest price point — and then we have this war occurring.

We’re seeing these energy shocks occurring with quite a bit more frequency than I remember when we were kids. They have been happening quite a lot. The impact to that for companies, if you’re in a sector that uses a lot of energy, it’s important to have a plan for how to manage those energy costs when they go up and how to take advantage of them when they go down. This can be sustainability plans for how to carry your prices through to the end product so you can recoup your costs. There are other interesting financial tools companies can use to hedge on prices when they have a lot of exposure, and you see that in the airline sector and other sectors where they’re using a lot of energy.

From a consumer perspective, the whiplash we’re seeing on this and the yo-yoing effect is pretty intense. It’s a little muted here in the U.S. because natural gas prices aren’t impacted here, but there are long-term impacts for companies that operate in Europe, for companies that move product to Europe and for consumers in Europe.

What I’m watching for is how the European governments and European companies respond to this intense whiplash they have felt the past five years in energy prices. Will they invest more in renewables and nuclear, alternative energy sources, try get off natural gas usage? Will they look for more domestic production of petroleum products to try to stabilize their supply? Those are the types of things we should watch for in the long term.

Alyse Mauro Mason: There is response happening. This is happening in real time. Just as of this week, at the end of March, there have been airline companies that have changed their business model. They’ve reduced routes as a direct response to what’s happening with the energy markets.

Meir Hasbani: I also read an article this morning about a brewing company in Hawaii which is paying intense fuel surcharges. They have to move their hops from the mainland U.S. to Hawaii. They brew the beer there, but then they move some back to the to the mainland for sales here. Those prices are going to have to carry that fuel cost. You wouldn’t think an oil shock leads to higher beer prices, but it certainly can, and it certainly does because of the amount of transport that has to go on in that industry in order to bring that product to market. We see this impact starting to permeate the economy.

I’m hopeful that when the war ends, we’ll see a return to the lower, more moderate prices, but there’s going to be some risk price in energy, certainly, in the short term and potentially for the long term as we go forward. We’re watching and paying attention to that.

Alyse Mauro Mason: There’s a chain reaction, but there are also a lot of impacts that might not be what you would expect — the high-touch items that work their way to the consumer. All this works its way to the consumer. One thing most people are surprised by is the number of products they use on a daily basis that are composed of oil or a petrochemical. An event like the Strait of Hormuz being closed or a trade route being impacted ultimately impacts the consumer. We gave the aviation example, the beer example you just gave. Everything could potentially impact the end user or the consumer. Do you have anything to add? What are some of those day-to-day things people might take for granted where the price for them might go up?

Meir Hasbani: It’s wild how many products we use that are either dependent on fossil fuels or are made from them directly — fuels are the most obvious one. We think about those every day, and we see them, but the next-biggest category is plastics — and that shows up in packaging. It shows up in electronic casings, your phones, your laptops, car parts, household goods. You store your food, and you bring your food home from the grocery store, in it. It shows up in medical equipment. I’ve been watching The Pitt, and I keep seeing them putting on and taking off all these plastic gloves and masks and stuff all the time.

It shows up in our clothing. The clothes you wear to the gym are almost certainly made from some type of either spandex or polyester. It shows up in personal care and cosmetics, shampoo bottles, conditioner bottles, your toothpaste bottle — your toothbrush is probably made from plastic. The deodorant you use is stored in plastic, and it shows up in pharma and health care. A lot of medicines use petrochemicals as the building blocks. We mentioned the plastic gloves — the tubing, and the sterile packaging, prosthetics and implants, are often made from plastic pieces. It shows up in construction materials, insulation for your house, PVC pipes, a lot of paints and coatings you use. I could keep going, but it’s everywhere. Thinking about the prices for this. In the long term, it’s definitely something to watch and pay attention to as it permeates our whole economy.

Alyse Mauro Mason: It’s not just a watch-and-see. It’s a watch-react-see-plan.

There’s another topic I love talking with you about — and I realize this question could be its own podcast altogether, so give us the three-minute version. Before you joined EcoCira, you spent a decade at Chevron, where you led the U.S. West Coast and biofuels strategy, including the development of Chevron’s first manufacturing facilities for renewable diesel, gasoline and sustainable aviation fuel.

As we sit here today, in March 2026, is the state of biofuels where you hoped it would be by now?

Meir Hasbani: No, but it’s not all bad either. When the American Renewable Fuel Standard was passed, there was tremendous hope at that time that we would figure out a way to unlock fuel from cellulosic fibers — woody plant material. Plants are really good at growing and making a lot of woody, fibrous material. They’re pretty good at making carbohydrates as well. But they’re less good at making, fats, oils and greases that we can use to directly manufacture fuels. So where do we see biofuels permeate in our economy? We see a lot of ethanol in gasoline. Ten percent of all gasoline sold in the U.S. is ethanol, most of that made from corn. We’re seeing a lot of it show up in diesel.

What we had hoped was that we would figure out an economic way to unlock that woody, fibrous plant material, which burns readily in our campfires, and turn it into a liquid fuel we could use in our cars, planes and trucks. That has not worked, and so we have not seen a ton of growth of the cellulosic fuel material we hoped we would get, which has led to a feedstock shortage for biofuels.

There isn’t enough fats, oil, greases and carbohydrates to feed the world, feed the animals, and power our planes, trucks, airplanes, ships, etc. We see roughly two million, three million barrels per day of biofuels being manufactured right now. That’s including ethanol, as well as our renewable diesel, biodiesel, and a little bit of sustainable aviation fuels being manufactured. We may see more of that starting to occur, but it’s not gone in that displacement of fossil fuel production we hoped it might 20 years ago, when the law was passed. That being said, we see a lot of investment in technology, especially in feedstock-unlocking technology in planting the kind of crops that grow in the off season so we can make land more productive. Soybean farmers have increased their yields.

Alyse Mauro Mason: There’s progress being made, but there’s still more progress to be done, and, hopefully, on a faster timeline, because that’s what the need is.

Sticking with this theme of policy and lawmaking that companies and boards should be paying close attention to, the EU has the Carbon Border Adjustment Mechanism, or CBAM. What is it?

Meir Hasbani: The European Union has a carbon price that companies have to pay for the emissions they put out. The way the European Union has tried to protect the companies that operate within Europe and have emissions there from competition outside of Europe that isn’t paying those carbon prices is by giving them free allowances. They don’t have to pay for all the emissions they have.

Europe is worried about a phenomenon called carbon leakage, where, essentially, the manufacturing moves out of the place where there is a carbon price and into a geography where they don’t have to pay for the carbon emissions or for their emissions. What looks like has happened is that emissions have gone down in Europe, but they haven’t. They’ve just leaked out of the eurozone and into a place where they’re not paying for the carbon.

CBAM is attempting to reduce the amount of leakage that’s occurring by saying, “If you bring a product into Europe, you have to pay for the carbon emissions at the border” — hence “Carbon Border Adjustment Mechanism” — f you’re coming out of a jurisdiction where you didn’t already pay for carbon. That puts Europe on a level playing field with the rest of the world and says it doesn’t matter where you manufacture this product; if you bring it into Europe, you have to pay for the emissions just like any company that’s manufacturing in Europe.

That’s protectionist for the companies and the operators in Europe, and it prevents carbon leakage outside of the eurozone. What is covered by this is important because right now, it’s only covering raw industrial materials: steel, aluminum, cement, fertilizers and electricity. It’s not covering finished goods. Imagine that a car manufacturer in the United States produces a car from steel, from aluminum, from plastics, all the other components that go into it — their emissions are associated with that entire value chain. They can sell it to Europe today without paying a CBAM, whereas a European manufacturer of a car, if they’re importing steel and aluminum in those products to make that car, they’re going to pay that CBAM to bring that in. It’s not gone all the way through to a full consumer product, and that creates a loophole Europe is seeking to fix. In the next phase, they want to expand the CBAM into manufactured goods.

This is where it starts to become not just a matter of “What are the carbon emissions it took to produce the thing you’re bringing in directly? How much emissions did you have?” It starts to look like a Scope 3 value-chain emissions calculation, where I not only have to know what my emissions were, I also have to know all the emissions that were upstream of my manufacturing of the product I made in order to be able to bring this car, this refrigerator — whatever this product is — into Europe and sell it, and I have to not only know what those are, I also have to pay for it as I bring it into Europe, and I have to pay those credits.

This is hard. Think about how much time and energy it takes for companies to manage their finances and the finance groups we have to pay their bills, to do accounts receivable, accounts payable — all the things we take for granted that our finance organizations are good at. You’re going to have to have a similar organization doing your emissions monitoring that is essentially tracking and receiving the emissions from your upstream suppliers and sending those emissions to downstream suppliers, if you’re just a segment in the value chain, and all the way to the border at Europe as you bring that product in — and by the way, not everybody measures those emissions in the same units, whereas in finance it’s always in dollars, and sometimes it’s foreign currencies, but there are easy conversion factors there. Sometimes, people measure those emissions in grams of carbon dioxide equivalent per megajoules; sometimes, it’s using British thermal units (Btus).

It becomes a complex and tricky thing for us to have to measure, report and pay money on, and your emissions-monitoring organizations and your sustainability groups are going to have to behave like your finance teams in terms of how they do accounting. What makes this even more tricky than finance is that when you’re moving money, it’s moving electronically between bank accounts, but there’s something you are holding that says, “I actually move these dollars between companies.”

With emissions, there isn’t a physical asset here you’re moving. It’s like, I put out this much emissions, and now I give them to you, and you’re holding them for me. The verification of that becomes a lot messier and a lot trickier when there isn’t a physical asset or a digital asset moving between these companies, functionally moving Europe’s climate policy outside of the eurozone, because in order to operate in the eurozone, you’re going to have to comply with it. Frankly, it’s difficult to have a jurisdiction with a carbon price that doesn’t have some sort of CBAM, because it just leads to manufacturing moving out of that jurisdiction to cheaper places where they can operate without paying those carbon prices.

That’s something I’m watching a lot in the United States as states start to adopt cap-and-trade, cap-and-invest. They’ve started calling them “cap-and-whatever” laws these days in California, Washington, Oregon, New York. The northeast has the power cap-and-trade law. Without border-adjustment mechanisms, there’s a real risk of emissions-intensive manufacturing moving out of those states and into states that don’t have these things.

California has a CBAM for power imports, but that’s the only place where it has it. What we’re seeing in California, which could become a trend you start to see in other states, is things like oil refineries starting to leave the state or starting to not invest in the state when they have a big investment to make because they’re worried that that fuels can be imported from out of state at a much lower cost without paying the carbon emissions, and they won’t be able to compete. When they have a $500 million turnaround to execute, they’re sometimes choosing that execute, then choosing to shut down.

California is a big agricultural powerhouse. It’s got a big aerospace sector, a tech sector. It supplies the fuels for most of the southwestern United States. These are important things for us to watch in jurisdictions in the United States where we don’t have CBAMs, and they’re much more difficult to implement because states can’t regulate interstate trade. It’s not allowed by the Constitution. It’s really important to watch.

Alyse Mauro Mason: When we think about the progress that’s been made in the U.S., is it fair to say we need further refinement — not from a constitutional perspective, but from an in-practice perspective?

Meir Hasbani: The simplest, most effective way we could handle this as a country is a countrywide carbon price, and then you don’t have to worry about these border-adjustment mechanisms — a worldwide carbon price. Then it doesn’t matter where you operate: You pay for the carbon as you manufacture it. You carry that through into the price of your goods, and it shows up in the final good. But you don’t have to worry about these difficult administrative things. That’s politically impossible. It’s a nice dream, at least, but I don’t think we’ll ever see it.

Alyse Mauro Mason: You knew where I was going — I was going to ask, is that a reality? It sounds like a dream.

Meir Hasbani: It is a dream. What we are seeing is, the states implement their own policies since they haven’t seen the federal government act, and they’re doing their own cap-and-invest, cap-and-whatever laws, etc. California recently passed — and other states are looking at passing the same thing — SB 253, the climate-disclosure law. You’ve talked about it on this podcast and other times, and we’ve talked about it together a lot. What that law does is see if absent a CBAM, having companies disclose their emissions can lead to a change in consumer behavior that then leads to companies changing their practices and investing in sustainability.

Essentially, all companies over a billion dollars in revenue that do business in California, whether they’re just selling their goods or manufacturing them in California, or even just have a large office presence in California, are subject to this. Will consumers open those reports and pay attention to them and say, “I’m going to buy a shirt from this company and not from that company because this one had lower carbon emissions”? I don’t know. I live in California, and everywhere you go in California, there are these Prop. 65 cancer warnings. What it’s saying is, if you walk into this building or if you eat at this restaurant or if you drink this coffee, or if you fill up gas, you might get cancer because there are cancer-causing materials here.

Thinking about the parallel with SB 253, it’s like, “This has this much carbon emissions and that has this much carbon emissions.” Will people pay attention to it and care about it? There’s been a tremendous amount of research that Prop. 65 did lead to consumers changing their behavior. It didn’t ban the chemicals. It didn’t set any huge limits on them. It just listed chemicals on a list where if you use them in your product or if you’re exposing people to them, you had to warn them. What companies saw and what companies did was, they didn’t want their product to have a warning label on it, so they changed their supply chains.

One of the ones I remember very well is that Nalgene bottles used to have BPA in them, and they were super popular. Everyone’s like, “There’s this chemical that can cause cancer in there.” Nalgene changed what they make their bottles out of to get off that list, so now, you don’t see that warning on a Nalgene bottle when you buy it.

I think about that as a parallel for SB 253. I don’t know if consumers will open those reports, and I don’t know if it’ll start to show up when you go to the store, like, “This one is the sustainable coffee, and this one is the one with a lot of emissions.” But it could lead to unexpected effects for companies: “I don’t want to be the high-emissions guy.” Now that everyone’s data is out there, there are these consumer-advocacy organizations that are making it really easy to find and really obvious and saying, “This is the company with a lot of emissions. This is the one that’s a lot more sustainable to buy these products, and not those.”

Those are the types of impacts we could see from that law that might be second-order and third-order impacts where we see, there isn’t a CBAM in California or New York or Washington, but they have these transparency laws that are leading consumers that care about these things to make different choices, and then the companies make those choices to invest in sustainability themselves.

Alyse Mauro Mason: How soon do you think we would be able to see that consumer response? Do we have to wait years to start seeing that? Do you think it would be immediate?

Meir Hasbani: We certainly have to get through the first reporting period. This year is going to be just voluntary reporting, essentially. Then, next year is going to be the year that all companies have to submit and get their data assured. It’ll take some time, but maybe we’ll be surprised. Maybe we won’t see much impact from this at all. We’ve got to get the reporting out there. It’s got to be visible. Then you’ll see people starting to compile those reports into industrywide assessments — consumer groups starting to do that and analyzing what the data is showing, and coming up with recommendations or things like that.

I’m excited to see where this goes with SB 253. It’s important for companies as they’re thinking about complying with that law, when thinking about compiling their emissions in their value chain in the future for Europe, with CBAM, to be considering, does the exposure of this, either directly from something like CBAM or consumer exposure, lead me to need to make different choices in terms of how I think about sustainability and how I need to invest in my value chain?

Alyse Mauro Mason: We’ve talked about price. We’ve talked about the impacts. There’s a consistent element we hear in sustainability: Decarbonization is expensive. Let’s do a lightning round of sorts — the impact of CBAM, the impact to market demand.

Meir Hasbani: Higher prices tend to suppress demand. But when they start to permeate throughout the economy, the entire economy needs to grow to adjust to those higher prices. It could have a depressing effect, but I don’t think it would be in large, depressing effect. It puts European goods and foreign goods imported into Europe on a level playing field, so high prices lead to less demand, but typically, the price is changed and then demand recovers to a different level, so we’ll see.

Alyse Mauro Mason: The impact of CBAM — what about the cost to decarbonize value chains?

Meir Hasbani: The broader a carbon-cost system is, the more likely you are to see investment in the cheapest ways to decarbonize, because you start to expand into the low-hanging fruit outside the sectors where they’re more difficult to do. CBAM will lead to investment in decarbonization in the cheapest places for the products coming into Europe, rather than the more expensive places that are stuck in Europe. It could lead to an overall lower cost to decarbonize.

Alyse Mauro Mason: What about energy security?

Meir Hasbani: Petroleum products are not part of CBAM, and they haven’t announced it to be a part of it yet. But the overall carbon cost is a big component in Europe, and Europe has had an intense energy shocks the past five years. Are the Europeans going to invest in alternative energy sources? They are trying to in order to get off of some of the petroleum shocks they’ve been seeing. Will CBAM directly impact energy security? No, but the carbon cost associated with it changes the investment profile for energy in Europe in a way we don’t necessarily see here in the U.S.

Alyse Mauro Mason: What about technologies in this space? Are they on track or behind?

Meir Hasbani: In the power sector — solar cost, wind cost and geothermal — those have all come to a point where they’re very competitive with natural gas and other means of producing energy. In that sector — battery energy storage, those kinds of things in the power sector — they’re on track, and they’re doing quite well. Where we have not seen technology catch up — and I touched on this with biofuels — is in the heavy-duty transportation sector, what I call thermally intensive manufacturing, in the types of manufacturing that have to use a lot of process heat in order to do their manufacturing, we haven’t seen that technology catch up.

We had this idea we could make a lot of green hydrogen, biofuels would be cheap and abundant, we could still use fuels — but lower-carbon fuels — for these processes. It hasn’t materialized, which is leaving companies with difficult choices, and expensive choices, about how to decarbonize. We’re starting to see a bit more investment occurring in carbon capture and storage — not so much a direct decarbonization, but a way to capture those emissions and put them underground. We’re starting to see some projects come online for that, and people starting to claim the 45U tax credit from the Inflation Reduction Act and the Build Back Better bill. But overall, in the thermally intensive manufacturing, in the heavy-duty transport, in the marine transport, it’s behind where we thought we might have been, 20 years ago.

Alyse Mauro Mason: To close out our conversation today, what are three key takeaways you hope boards of directors around the world leave this conversation with?

Meir Hasbani: What does a company need to live in a world like this? Resilience, competitiveness and thinking about integration. Energy volatility seems like it’s become structural, less cyclical than it used to be — geopolitics, trade, disruptions, policy shifts. You see that in the U.S. even within our own policy. Maybe this is just a period of volatility. Maybe it’s not, but it doesn’t feel like this is just a short-term period of volatility anymore. It feels like it’s a new operating environment.

Boards need to plan for resilience, not just stability, in their energy policy. Decarbonization is a competitive strategy. It’s not just a cost policy like CBAM, whereas we’re not seeing necessarily as much growth in the U.S. level, we are seeing states take the lead here. We’re seeing the European Union take the lead. We’re seeing countries in Asia–Pacific take the lead. Decarbonization is going to become a competitive strategy, not just a cost. I’m curious to see if we see that consumer behavior changes that. We were just talking about where that could really become a cost advantage, a strategic advantage, for companies.

Certainly, when you have a CBAM, having a lower carbon-cost value chain as you come into those markets will be an advantage. When I think about integration, it’s energy policy, supply chains. Those strategies aren’t silos anymore. You need to have an integrated policy, an integrated strategy for all those things. They’re not separate functions. The winners will be companies that connect these dots at the board level and permeate that through their company and act holistically.

Alyse Mauro Mason: Resilience, competition, watch, respond, plan and connect the dots at the board level, which is essentially the governance of the entire strategy. Meir, I appreciate you being with us today, and I’m looking forward to having you back soon.

Meir Hasbani: That sounds fun, and it’s been fun talking about these things. It’s just been such a pleasure.

Alyse Mauro Mason: To our audience, thank you for being loyal listeners. We hope you enjoyed our discussion about energy markets, trade routes, trade-route impacts, biofuels and climate lawmaking, and the challenges and opportunities they all bring. If you have any questions, please reach out to us and to my dear friend Meir Hasbani at EcoCira. Until next time, take good care.