The national carrier has been flying backwards, as its carbon intensity increases in the Covid slowdown and it is unable to buy local forest offsets
Analysis: Even Air New Zealand's sustainability targets aren't sustainable. The airline is failing to meet conservatively set milestones on its course to decarbonisation.
This morning it has published its sustainability report, announcing that it will set a science-based carbon reduction target.
But in an interview with Newsroom, the company's head of sustainability acknowledges the target will have to be upgraded within a year, because it will no longer be internationally regarded as sufficient.
1 / Reduction target soon to be redundant
Air New Zealand was a member of the Science Based Targets initiative’s technical working group developing the target setting methodology for aviation, and has set a new target aligned to keeping global warming "well below 2°C".
But the international initiative, which accredits companies' performance, announced in July that it was phasing out the "well below 2°C" target for other businesses.
"To have a fighting chance of limiting warming to 1.5°C, we need to urgently scale-up and mainstream the adoption of 1.5°C-aligned targets," said Lila Karbassi, the initative chair and chief of programmes at United Nations Global Compact.
For aviation, the target is to be phased out next year, and companies like Air NZ will need to target 1.5°C instead to be compliant.
Sustainability head Meagan Schloeffel confirmed the airline would have to upgrade its new target, potentially even before the financial year is out.
2 / Carbon intensity up
The sustainability report also measures the airline's performance against carbon intensity markers – a tool for measuring emissions that is contentious because it counts emissions against production, rather than absolute reductions.
But in adopting that more conservative measure, the airline has made a rod for its own back. The report shows its carbon emissions intensity has increased in the Covid slowdown.
This is because it's flying planes with fewer passengers and less cargo, like the flights the Government requires it to provide to Cook Islands and Niue, that are often near empty. On its diminished international network, its emissions intensity has increased over the past two years from 726 to 972 grams of CO2-e per revenue tonne kilometre.
And on its domestic network, emissions intensity has increased to 1,168 grams of CO2-e per revenue tonne kilometre.
The airline says it aims to improve carbon intensity by reducing emissions at the same time as maximising its total payload carried – for instance, by increasing is cargo load from 67 to 85 percent by 2025, so each plane is operating more efficiently.
3 / Behind on biofuel
This year the airline had three Boeing 787s in Singapore for maintenance, and planned to "drop in" SAF (sustainable aviation fuel) for the flights back to New Zealand. One of the world's biggest SAF producers, Finland's Neste Oyj, has a big depot in Singapore and has been in talks to supply Air New Zealand.
But there's more demand for SAF than there is supply, and Air New Zealand didn't have enough commercial clout to get the one-off supply this year.
It also tried to import some to New Zealand, to trial in its supply infrastructure like storage tanks, pipes and delivery mechanisms – but it was unable to get that either.
"There are only six SAF producing facilities operational around the globe so there is a significant shortage. Approximately 0.1 percent of jet fuel sold in the world to date is SAF." – Meagan Schloeffel, Air NZ
"We had hoped the first delivery would be with us before Christmas, however, due to logistical challenges, there has been a delay," Schloeffel said.
"It’s also good to note that there are only six SAF producing facilities operational around the globe so there is a significant shortage. Approximately 0.1 percent of jet fuel sold in the world to date is SAF."
Schloeffel said the airline had two deliveries of SAF scheduled for delivery in the first half of 2022. It hoped to have the first shipment around March, with the second arriving a few months later.
Her counterpart David Morgan, the chief operational integrity and safety officer on the airline's executive, told Newsroom he expected to trial the fuel through the airline and airport infrastructure, and in the fleet of planes as they fuelled in Auckland over March and and April.
The airline has set a new target that 10 percent of its total fuel uplift is SAF by 2030.
4 / No local tree-planting offsets
Air New Zealand been unable to buy native forest carbon offsets locally – which is a worrying sign of how far away New Zealand is from the Climate Change Commission's hope to sequester many of the country's emissions through permanent native forestry.
One of the pillars of the airline's new sustainability framework is supporting biodiversity and native forestry offsetting. It sells a carbon offsetting product called FlyNeutral, to both passengers and freight customers, which sourced carbon credits from permanent native forestry projects in New Zealand.
But the report says it's been forced to make changes to the offsetting programme this year.
"Unfortunately, we can no longer find enough of these credits to meet demand," it says. "Now, when a customer chooses to offset their flight related emissions, 100 percent of their carbon is offset using carbon credits from international projects that comply with international best practice."
Customers' FlyNeutral contributions also support New Zealand’s native biodiversity through a donation to the Native Forest Restoration Trust, the report says. In the first half of 2021, more than $350,000 of customer funds were donated to the trust to speed up the restoration, regeneration, and production of New Zealand’s permanent native forests.
Schloeffel downplayed the fact that the airline doesn't build offsetting into its pricing. "While carbon offsetting does and will continue to play a role in our decarbonisation roadmap our key focus is reducing gross emissions through SAF and zero-emissions aircraft."
Charting a course forward
Air New Zealand chief executive Greg Foran said the company had been working on a range of opportunities to achieve its net zero emissions by 2050 target, with particular focus on hastening the arrival of zero emissions aircraft, and SAF. "It is becoming increasingly clear that without readily available access to SAF, we will not be able to reach our net zero target."
He said the airline was in close discussion with the Government on this, and in July had signed a Memorandum of Understanding with the Ministry of Business, Innovation and Employment to determine the feasibility of producing SAF in New Zealand.
"SAF can be made using a range of waste materials and is critical to decarbonising the airline, in particular our long-haul flights," Foran said.
"We are actively pursuing opportunities around electric and hydrogen aircraft as an option for shorter domestic and regional flights, with ambitions to have electric aircraft in our fleet by 2030.
"This includes a strategic partnership with Airbus to explore the possibility of operating hydrogen planes on our domestic network. We are excited by the opportunities these technologies present that will allow us to better serve our customers with low carbon travel."
