'The world's least unsustainable airline': Air New Zealand's climate dilemma

Friday, 5 April 2019

Air New Zealand ranks highly for its sustainability efforts, but the airline's emissions continue to mount.

One of New Zealand's most trusted companies is among its largest climate polluters. Despite a pledge to limit its footprint, the national carrier's pollution is growing steadily. Charlie Mitchell reports.

One morning each year, business leaders, politicians and journalists meet at a lavish breakfast function on the Wellington waterfront.

The event has all the trappings of a financial presentation – say, the release of an annual report – but its purpose is to recognise something else: Sustainability.

Air New Zealand has aggressively framed itself as an environmentally conscious company, something akin to a 'green' airline. Each year, it releases a lengthy sustainability report, which it features prominently alongside its financial reports.

For several years, the company has been reporting its own greenhouse gas emissions. It has set up its own sustainable advisory panel, which is given the freedom to challenge the company's behaviour. And it pushes for stronger environmental regulations, such as the Zero Carbon Bill, rather than weaker ones.

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It shows how the airline sees itself. Or, at least, how it wants the world to see it: A company that takes its environmental footprint as seriously as its bottom-line.

At last year's breakfast, the chairman of the airline's sustainability panel, British environmentalist Sir Jonathon Porritt, talked about how much airlines pollute the climate, calling climate change an 'existential threat' to humanity, while describing Air New Zealand's attempt to become what he called 'the world's least unsustainable airline'.

Those efforts have been awarded numerous times. In 2016, the company won the supreme award at New Zealand's sustainable business awards, in which it was heralded as 'the nation's greatest contributor to sustainability'. This year, it was named eco airline of the year at the world airline industry awards, its sustainability efforts described as 'industry-leading'.

Is it enough?

Air New Zealand is facing a dilemma that all airlines face. Its environmental footprint is significant, mostly unavoidable, and growing.

The company is one of the country's largest climate polluters, responsible for emitting 3.5m tonnes of carbon dioxide every year, the equivalent of around four per cent of New Zealand's total greenhouse gas (GHG) emissions. Air New Zealand alone has the same GHG footprint as the country's entire waste disposal sector (because international flights don't count towards a country's total emissions, most of its footprint is uncounted in the national total).

While other industries have been pressured to decarbonise – with varying levels of success – Air New Zealand's carbon footprint has steadily grown year on year. Its emissions in 2018 were 700,000t higher than they were in 2011, the equivalent annual carbon footprint of around 90,000 New Zealanders, or a city roughly the size of Palmerston North.

This has happened in the context of a surge in demand for flying worldwide.

Sir Jonathon Porritt, speaking in Nelson last year.

Globally, the number of people flying on a given day has doubled since 1999, and is expected to double again by 2037, according to the International Air Travel Association (IATA).

Every year, many millions more people fly at least once than in the year before. The number of commercial aircraft in the world has grown from 3700 in 1970 to more than 21,000 today.

Air travel, globally, is responsible for between two and three per cent of greenhouse gas emissions, but it's growing more quickly than any other sector. By 2030, it's possible that figure could increase to as much as 10 per cent of global emissions.

'Any airline that is looking still to grow its business faces this dilemma, and Air New Zealand is no different from any of the rest of them,' Porritt told Stuff.

'It does indeed have significant growth expectations from 2020 onwards.

'Awards are one thing; leadership and sincerity of intent is an altogether different story, and there's no doubt that Air New Zealand is pursuing all of these challenges with real purpose and urgency.'

Navigating these challenges – sky-rocketing demand and increasing pressure to reduce their environmental footprint – is no easy task.

Almost all of Air New Zealand's GHG footprint comes from a single source: Burning aviation fuel. It is the cause of 99.7 per cent of the company's GHG emissions, its data shows.

'Carbon is absolutely our most material issue,' says Lisa Daniell, the company's head of sustainability.

'The vast majority of our greenhouse gas footprint is the result of our use of jet fuel, which we and the industry are reliant on. There's not really a whole lot of alternatives.'

Any alternatives are likely some way off. Air New Zealand has long been interested in biofuels – it even conducted the world's first test flight using jatropha as a fuel source one decade ago – but biofuels have never been made available at a scale large enough to use.

Another option is electric or hybrid-electric planes, which the company believes has potential, Daniell says. But they would likely only work on regional flights, and the majority of its emissions come from international flights.

It leaves one option: Burning less fuel. It can do that either by flying less, or by using fuel more efficiently.

Like other airlines, Air New Zealand has focussed on the latter. It adopted the industry-wide target of improving fuel efficiency by an average of 1.5 per cent each year between 2010 and 2020, which it has done successfully.

But after a decade of efficiency gains, they are becoming harder to find.

Last year, efficiency gains were 1.1 per cent, and the year before, they were 0.3 per cent (the average across the decade has been 2.5 per cent).

One recent efficiency gain was to alter the climb and descent paths of some flights, allowing for a continuous low-powered descent, which uses less fuel. Another has been to connect large planes to electricity when they're in the gate to keep the lights and air conditioning going, rather than using a small engine.

Last year, the company's efficiency efforts saved around 11,500t of carbon, according to its annual report. But that was swamped by an overall emissions increase of more than 100,000t.

The company is quick to acknowledge its footprint. Because of the inherent difficulty in reducing its own emissions, it considers sustainability issues along its supply chain, through procurement.

Here's how you can help fight climate change by paying to neutralise the carbon emissions you create (video published October 2020).

There is, however, pressure for the airline industry as a whole to reduce its impact. Unlike many other industries, aviation was not included in the Paris Agreement, leaving it to effectively come up with its own system.

The resulting agreement from the International Civil Aviation Organisation (ICAO), part of the United Nations, agreed that member airlines would offset any additional carbon produced beyond their annual 2020 total - effectively 'carbon neutral growth'.

It means that each tonne of carbon added to the atmosphere above their 2020 baseline would need to be taken out again through other means.

Air New Zealand is already a keen user of carbon offsets, and will participate in that scheme.

It is already legally required to offset its domestic emissions through the Emissions Trading Scheme, but it also has its own separate, voluntary offset scheme, in which passengers can pay to offset their own flights.

'It's a dilemma for the industry, when you think about the volume of people who do want to travel, and hence us needing to find solutions in the technology space as quickly as we can,' Daniell says.

'The thing that the industry knows is we will need to look at high quality offsets to be netting out some of that growth.'

When you offset your flight, you are, in effect, buying carbon credits from Air New Zealand, which are set at a near market price (which, as of January 2019, were around $22 per tonne).

This money goes towards one of many different projects. It may go towards planting native forest in a reserve near Christchurch, or help build a wind turbine in New Caledonia. One particularly obscure project teaches Vietnamese farmers how to use livestock manure to power their gas cookers.

Take-up of this scheme has been quick, Daniell says, particularly after the feature was made more prominent in the booking system. In its early days, around 1000 passengers a year off-set their flights. Last year, more than 130,000 did, a 300 per cent increase from 2017.

'It's voluntary, yet we'd love more people to be taking up that opportunity,' she says.

'We have seen really big uptake in that function … We are seeing a shift.'

Whether using offsets, rather than addressing the cause of the emissions, is good enough is a matter of considerable debate.

One problem is that carbon emissions are just half of the problem. Air travel produces many other short-lived gases that increase warming, such as nitrogen oxide, sulphur dioxide and water vapour.

Together, these non-CO2 emissions have around the same warming impact as the CO2 from air travel, effectively doubling its carbon footprint.

Although only a third of passengers, international travellers account for 80 per cent of Air New Zealand's carbon emissions.

The use of offsets also allows the industry to continue growing - to become an increasingly large contributor to global emissions while other industries shrink.

'It doesn't really do anything to contain or stabilise aviation emissions at source, which is what might have been expected or hoped for post-Paris,' says Otago University Professor James Higham, a sustainable tourism expert who has published several papers on aviation and climate change.

'It's seen as an underwhelming response to an overwhelming problem.'

Historically, one of the problems has been that reducing aviation emissions was a burden largely placed on individuals by encouraging people to fly less.

This hasn't worked, Higham says. Air travel is, in most places, the most efficient way to travel long distances - cheap, fast, and safe.

'Very few people would choose to travel by less convenient and more expensive modes of transport,' he says.

'Aviation just out-competes the alternative options, and it's just the reality of our transport networks around the world - the sustainable option is the least affordable and least desirable, as a rule.'

While it has embraced offsets and efficiency improvements, Air New Zealand has been unable to reduce its source emissions, which have grown steadily many years in a row.

In 2011, its baseline year, the company's GHG footprint was 2.96m tonnes; last year, it was 3.59m tonnes, an increase of 22 per cent.

It has largely been driven by significant growth in the number of flights.

In the last five years, the number of passengers using Air New Zealand each year has risen 25 per cent, to 17 million. The available seat kilometres – effectively a measure of the airline's passenger carrying capacity – has risen by one third.

Its increase in emissions can be predominantly put down to international travel, which is far more carbon-intensive than domestic travel.

In a given year, one-third of Air New Zealand's passengers are flying internationally, but they are responsible for 80 per cent of its annual greenhouse gas emissions.

New Zealand's distance from international destinations is another issue. According to the global sustainable tourism dashboard, New Zealand's per capita aviation emissions – calculated as the emissions created from trips originating in New Zealand – are around 670kg per person, which is relatively high, surpassing the likes of Australia, the USA and Canada.

But it's not just tourists. New Zealanders themselves have a relatively high GHG footprint, at least by international standards.

The average New Zealander produces the equivalent of 7.7t of carbon each year, nearly double the global average.

Air New Zealand's sustainability advisory panel generally praises the efforts on the national carrier to reduce its environmental impact.

If every person had an annual carbon budget, a long-haul flight would be the equivalent of a splurge.

In this scenario, domestic flights wouldn't be too costly: A return flight between Auckland and Christchurch, for example, produces around 200kg of carbon per person, around two or three percent of the annual budget.

International flights are much worse. A return flight between Auckland and London produces around 3t of carbon per person, the amount of carbon the average global citizen produces in a year, and not far off the total emissions produced by one year of driving an average car.

Billions of people don't fly at all, but as air travel becomes more affordable, that is changing. While wealthy countries already have by far the largest per capita emissions, the increasing availability of flying risks increasing that footprint.

'Instead of having a holiday once or twice a year for a week or two close to home, people can fly around the world for a conference or a meeting or a wedding and you can do so cheaply,' Higham says.

He recently co-authored a paper considering how to collectively reduce the impact of flying. The problem is partly due to psychology - even the most environmentally conscious people would justify flying regularly, he says.

'Unless you rein in the airlines – which is not a particularly palatable option to most neoliberal governments – unless we tackle that, we're unlikely to solve the problem of high growth in aviation,' Higham says.

'It's a collective problem and it does require a collective response. I did tend to lose heart that individuals can solve this problem in isolation.'

As for Air New Zealand specifically, it appears to be doing as much as an airline could to reduce its footprint, Higham says.

'Unlike many others, it has actually committed to a sustainability advisory panel. It's doing much more than any airline I can think of to confront, and not ignore, the problem of aviation emissions in a carbon constrained world.'

German non-profit group Atmosfair, which ranks many of the world's airlines by carbon efficiency, lists Air New Zealand at 13th of 125 in its 2018 index. Members of the company's sustainability panel have generally praised the airline for its efforts.

Air travel has become a vital part of many national economies, including New Zealand's, which has put pressure on the company to meet rising demand. Sir Jonathon Porritt says if any airline could meet the challenge, it would be Air New Zealand.

'I think all of us on [the panel] are of the opinion that Air New Zealand is right up there in the leading cohort of airlines taking these responsibilities very seriously indeed.'