Aviation Sector Lags on Sustainability, But Biofuels Present Opportunity

This post originally appeared on Biomass Intel


By Mackinnon Lawrence

Maddock Douglas, a business consultancy based in Chicago, found in its MapChange 2010 (to be updated this summer) that the Airline sector lags behind other industries in its sustainability efforts.

MapChange 2010, which profiles the sustainability of companies, shows that since many airline brands received fair perceived scores and low actual scores (see grid below), they qualify to be included in the Lucky Quadrant—meaning these brands currently enjoy “undeserved credit” for a green image without the initiatives to back it up.

The recent spate of biofuel announcements could be to blame as airlines tout their “green” image in corporate social responsibility (CSR) messaging by committing to the use of alternative fuels (see Aviation Industry Hangs Its Future on Biofuels).

While biofuels may reduce GHG emissions from aircraft, the primary concern among airlines is cost, not necessarily the environment. With oil prices climbing and showing increased volatility in the last decade, alternatives to petroleum are good for the bottom line. The result is a scramble for alternative feedstock sources like Camelina that can be processed into “drop-in” compatible jet fuels (see Camelina Aviation Biofuels: Market Opportunity and Renewable Energy Report). Interestingly — perhaps in deference to public perception about sustainability and environmental responsibility — airlines don’t seem interested in feedstock sources like ethanol that have poor lifecycle emissions profiles, compete with food, and lead to indirect land use change.

Although Virgin America was not profiled on the MapChange 2010, the airline has been a pioneer in advancing sustainability in the aviation industry. Since the start of Virgin America in 2007, the authors of the report explain, sustainability has been infused into both their practices and their fleet models (Virgin America uses the Airbus A320, the fleet that releases 25% less CO2 than competitors). In fact, Virgin America is the only airline reporting their Greenhouse Gas Emissions through the Climate Registry. And, they’ve teamed up with Congress to propose legislation that would require the Environmental Protection Agency to create GHG emissions standards for aircrafts. Their parent company, Virgin Group, which licenses the Virgin brand to the airline, conducted a test flight using biofuels in 2008 under its Virgin Atlantic brand. Although separate companies, Virgin America may have benefitted from spillover credit.

For the airline industry as a whole, biofuels will play a key roll in shaping public perception around sustainability. As the team from Maddock Douglas explains:

In the very near future, sustainability will be mandatory, and in many cases ignoring the norm will result in punitive consequences. In this case, Virgin has a leg up on the competition in terms of actual sustainability. But the problem is, consumer perception really counts—in dollar signs.

If Virgin and other airlines continue to enhance only their existing green offerings and practices, yet don’t move forward with a consumer-facing communications strategy, they risk missing out on the opportunity to improve their bottom line. With airline brands exposed to public scrutiny, communicating sustainability strategies will be key to securing market share in the next decade. Airlines can improve their profitability — both through improved branding and reduced fuel costs — by incorporating sustainable biofuels into their fuel supply chains.

Mackinnon is Editor & Publisher of Biomass Intel, a law and policy resource for sustainable energy.

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