Analysis: The worrying number in Air New Zealand’s Sustainability Report

Passengers may have been enjoying flying in some half-full cabins during the past year but the light loads on Air New Zealand flights have been bad for the planet.

The airline has released its annual Sustainability Report which firms up some key targets for replacing kerosene to power planes but in the fine print there are figures which show the environmental downside of flying during a pandemic.

While the number of flights is well down on pre-Covid times means a steep 58 per cent drop in total network emissions, flying is less environmentally efficient per passenger.

The key measure of carbon intensity is up 31 per cent in 2021, compared to last year. Carbon intensity is measured by grams per tonne of payload carried.

“This increase was largely due to New Zealand border restrictions leading to lower than usual load factors on the international network and multiple national lockdowns impacting load factors on the domestic network,” the report says.

This makes comparisons between pre-Covid flying and what it is during the pandemic but starkly illustrates how closely airline revenue goals (full planes generally mean bigger profits) align with their environmental imperatives.

“Despite the pandemic grinding our business to a halt, we believe climate change is the biggest crisis facing our airline. And if anything our commitment to take action has strengthened,” says the airline’s chief executive Greg Foran.

With its near-complete reliance on fossil fuel, air travel is polluting and although there are ways of cutting that significantly with new aircraft, the need to develop Sustainable Aviation Fuel (Saf) is urgent.

The airline is now working with the Government and the fuel industry on Saf with the target of being able to fly its network with 10 per cent green avgas by 2030. This would be used for larger international aircraft and result in the airline’s carbon footprint being cut by 50 per cent by 2050.

Made from waste materials such as used cooking oils, forestry residues or landfill waste, the report says Saf has the potential to reduce carbon emissions by more than 80 per cent compared with traditional jet fuel. It isknown as a “drop in” fuel, not requiring different engine technology or infrastructure, but currently none is made in this country and around the world less than 1 per cent of flights are powered by Saf, the report says.

The Government has been largely silent on Saf,development of which could be crucial to differentiate this country — with vast quantities of woody waste — lying at the bottom of an increasingly carbon-conscious world.

In its report Air New Zealand says it continues to engage with the Government, advocating for more research, policies and investment vital to creating a Saf market and reducing costs. The airline first trialled biofuel in 2009 and is pushing for a public-private aviation decarbonisation advisory body to recommend the right policy settings.

Air New Zealand is also working with Airbus on hybrid hydrogen planes. These would replace regional Q300 turboprop aircraft which are progressively coming up for replacement but, like Saf, needs the development of a new industry or dramatic expansion of an existing one before they can fly.

Lower hanging fruit is fleet renewal. The pandemic means the airline has retired its 777-200 fleet and will phase out its 777-300s by 2027 at the latest. The addition from next year of more fuel-efficient Boeing 787 Dreamliners powered by GE next generation engines and new, more efficient A321neo planes, have the potential to cut emissions by 20 per cent.

Foran says in the current year the climate crisis has continued to accelerate, with the latest climate change report from the Intergovernmental Panel on Climate Change giving the starkest warning yet that the window to limit global temperature rise to 1.5°C is narrowing rapidly.

“This year has seen a renewed focus on the environmental impact of flying, and we are acutely aware that decarbonising aviation and Air New Zealand will be even more important when borders open.”

Time for greenwashing long gone

The airline under new National Party leader Christopher Luxon set up an international advisory panel in 2015 which is now chaired by Sir Jonathan Porritt.

From Britain, he has been campaigning on environmental issues since the 1970s and hit out at “greenwash” in the airline industry

He says there are two factors that differentiate the aviation sector from all other sectors: first, people who fly today value the privilege, and most of those who don’t or can’t fly today would love to be able to; second, the route to net-zero carbon aviation, technologically, is harder than for any other sector.

“Pre-Covid, that persuaded a lot of leaders in the sector to sit back and refine their greenwash. But those days are long gone.” All airlines’ social licence to operate will now become increasingly hard to earn and increasingly dependent on actions “not on fine words.”

After years of technological procrastination, the route to Net Zero emissions in 2050 for aviation was fully under way — with highly significant competitive issues.
Porritt points out the development of a home-grown Saf industry is crucial.

As a small country at the end of the world, New Zealand will always be a price-taker. By 2030, it will be the big players in the industry who will be determining that price, says Porritt.

The only way of managing that risk is for New Zealand to ensure its own, indigenous Saf capability — and that means taking big decisions in a clear and accountable way over the next couple of years.

“For most people, it may previously have been a rhetorical flourish to talk about sustainability as mission-critical for airlines. Now it’s for real — as in which airlines will survive and which won’t.”

The panel meets the airline’s board annually and has fed into a sustainability framework that has four key areas; caring for New Zealanders’ genuine climate action, driving towards a circular economy and sustainable tourism.

Besides pushing for more Government measures on Saf, the airline also wants changes to how the Emissions Trading Scheme operates.

It has an obligation to report greenhouse gas emissions generated from fuel use on all domestic flights and then purchase and surrender to the Government an equal number of New Zealand units to match those emissions. In the 2020 calendar year,its obligation was 412,810 tonnes of CO2, costing $14.5 million.

”With the introduction of auctioning in the ETS, Air New Zealand continues to advocate for auction proceeds to be ring fenced to accelerate the development and deployment of technologies that enable aviation decarbonisation and provide a suite of co-benefits to New Zealand.”

The report also reveals how its FlyNeutral carbon credits (which just on 7 per cent of passengers opted to pay last year) must now be spent overseas.

Originally, it sourced half of our FlyNeutral carbon credits from permanent native forestry projects in New Zealand.

”Unfortunately, we can no longer find enough of these credits to meet demand. Now when a customer chooses to offset their flight-related emissions, 100 per cent of their carbon is offset using carbon credits from international projects that comply with international best practice.”

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