The newswires are currently preoccupied with Boeing’s woes due to its 737 Max fleet, yet the aviation sector is also grappling with another challenge: rising emissions and their impact on the world’s environment.
Aviation is widely seen as the transport sector that is most difficult to decarbonize, according to the independent nonprofit International Council on Clean Transportation (ICCT). That hasn’t stopped a group of investors from demanding bolder, faster action in a recent ranking of best and worst airlines in combating climate change.
The fast-growing aviation sector accounts for about two percent of global greenhouse gas emissions and aircraft emissions are expected to grow by 50 percent by 2050 as worldwide demand for air travel increases.
That should be more than enough incentive for airlines to prioritize their carbon footprint, but the Transition Pathway Initiative’s (TPI) recent review of 20 of the world’s biggest listed airlines found the industry as a whole was not doing enough to manage climate change. The TPI is backed by investors representing over $13 trillion in assets.
The investor group looked at public corporate disclosures such as CDP for its research. It noted that many airlines have formally adopted industry targets to reduce their net emissions. But that this approach, the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), relies on carbon offsetting rather than airlines reducing their own flight emissions.
“Offsetting is no substitute for a clear strategy to reduce emissions,” Helena Viñes Fiestas, Deputy Global Head of Sustainability at BNP Paribas Asset Management, said in a press release.
Nevertheless, TPI did highlight some leaders and laggards out of the pack. Only four airlines—ANA Group, Delta, Lufthansa and United—were strategic in their approach to managing climate change, according to TPI. Five airlines—Air China, China Southern, Korean Air, Singapore Airlines and Turkish Airlines—were at the bottom of the ranking in level of awareness of climate change, the group's researchers said.
In an interview with TriplePundit, United’s Aaron Robinson, the airline’s senior manager of environmental affairs and sustainability, cited the company’s focus on fuel efficiency and its investment in sustainable fuels as reasons for its high ranking in the study.
United, the third-largest carrier based in the U.S., has twice been named the Eco-Airline of the Year by Air Transport World. United was also the first U.S. airline to set a greenhouse gas emissions reduction goal for reducing its individual emissions, a 50 percent reduction in carbon emissions by 2050.
“We have also made a commitment to our business customers to have the lowest gross carbon footprint amongst our key competitors,” Robinson told 3p.
United is the largest airline investor – globally – in future sustainable aviation fuel technology, he added. In 2016 it became the first U.S. airline to begin using commercial scale volumes of sustainable aviation fuel for regularly scheduled flights.
Along with United, Australia's Qantas and EasyJet, Alaska Air scored well on lowering carbon emissions in TPI’s review. Recognized as the most efficient airline in North America for seven years in a row by the ICCT, Alaska Airlines is the leading U.S.-based airline listed on the 2017 Dow Jones Sustainability Index.
“We believe the most environmental fuel is the fuel we don’t use—thus our continued focus on flying the most-efficient fleet, and pioneering new technology to fly greener and smarter,” Kirk Myers, director of sustainability for Alaska Air, told 3p in an interview.
The commitment to efficiency, he said, “is not only best for our environment, but for our business,” “We’re 13 percent more efficient than the U.S. carrier average, and that means we’re also 13 percent less exposed to the volatility in cost of jet fuel.”
Only Delta and Lufthansa have gone as far as linking their climate change targets to executive pay, for which investors are calling, the study found.
But United pushed back against that conclusion. Jet fuel consumption was United’s second largest cost in 2017, “making United executives and managers incentivized to conserve fuel, reduce GHG emissions and improve the company’s (and their own) financial performance,” Robinson said.
And while the study highlighted that no airline had created an internal price of carbon, Robinson said “as fuel is our #2 expense and accounts for nearly 99 percent of our carbon footprint, there is nothing more topical to United’s bottom line than our price of carbon.”
Reliance on sustainable fuels to meet carbon goals is no sure thing, according to experts. Sustainable aviation fuels costs about three times as much for airlines to purchase compared to standard fuel, according to the Rocky Mountain Institute. As a competitive, low-margin industry, airlines have been unwilling to commit to large-scale sustainable fuels consumption at current prices, RMI noted. That means sustainable fuel producers cannot secure project finance to build new bio-refineries, achieve economies of scale and bring prices down.
Despite these challenges, airlines like United and Alaska see sustainable fuels as their best bet to tackle airline emissions. United’s Robinson said the airline plans to purchase nearly one billion gallons of biofuel in the future, all of it sustainably certified and utilizing a waste byproduct – currently either agricultural waste or municipal solid waste.
“The study made no mention of biofuels, which we remain bullish on as one of the most promising methods to reduce our carbon footprint,” Robinson said.
If traditional fuel-based aviation doesn’t move fast enough, it may soon be sharing airspace with electric aviation competitors with its far lower carbon footprint, as 3p has reported. Electric aviation newcomers like Zunum expect to launch their first hybrid electric regional aircraft by the early 2020s, slashing emissions by 80 percent.
Image credit: Pixabay/Skeeze
Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.