Increased flying by Air New Zealand during the last year resulted in carbon emissions soaring as the airline hit snags sourcing alternative fuel to bring them down.
The airline says its total “well-to-wake” emissions from jet fuel also increased by 88 per cent in 2023.
These increases were due to greater network capacity as the airline operated a network unconstrained by Covid-19 restrictions.
Total emissions levels remain lower than pre-Covid levels.
The airline disclosed in its Sustainability Report that 78 per cent of its emissions were generated on its international network, but the airline’s carbon intensity decreased 21 per cent compared to 2022. This improvement was largely due to the absence of border restrictions compared to the prior period, leading to higher load factors on the network. Throughout the year to June 30, the airline carried nearly 16 million passengers on 170,000 flights.
This metric still remains slightly higher than 2019 levels by 0.3 per cent, despite total emissions from flying being 2.8m tonnes in 2023, down from the 2019 peak of nearly 3.9m tonnes.
But carbon intensity, measured in grams of CO₂ by emissions per available seat kilometre (ASK), increased 5 per cent compared to 2022. This increase is a result of the reintroduction of the less efficient Boeing 777-300ER fleet in the period.
The airline faced challenges introducing sustainable aviation fuel (Saf) - a drop in fuel that can replace traditional jet fuel.
At the beginning of the latest year, the airline announced it would aim for 1 per cent of its jet fuel use in the year to be Saf. The airline says it encountered “a number of challenges” in pursuit of this target, and ultimately fell short, with only 0.11 per cent of all fuel being Saf in the year.
The airline wants Saf to make up 10 per cent of its fuel use by 2030.
But during the past year, the airline didn’t go ahead with two separate shipments (from undisclosed suppliers) because due diligence revealed these Saf sources did not meet the airline’s sustainable procurement criteria. Supply limitations at overseas ports also impacted the airline’s ability to meet the 1 per cent target.
In its report, the airline says lessons gained from pursuing this target have been “invaluable” as it looks to build its Saf purchasing programme. In particular, the actions taken in attempting to meet this goal provided lessons on the complexity of Saf supply chain sustainability and the reality of global Saf supply limitations.
It also confirmed the true cost of Saf in the Asia Pacific region (being four to five times the cost of fossil jet fuel), where there is an absence of supportive Saf policies.
Air New Zealand received its first import of Saf in September 2022.
The 1.2m-litre delivery, in its neat (unblended) form, reduced lifecycle carbon emissions by at least 80 per cent compared to fossil jet fuel. The Saf was produced from tallow by the world’s largest Saf supplier, Neste, and imported in partnership with Z Energy.
"The shipment was critical to furthering the airline’s understanding of Saf import supply chain logistics, customs processes, Saf emissions accounting, sustainability certification and documentation, and the true cost of importing Saf to Aotearoa."
Worldwide use of Saf is off to a slow start because of supply problems. The International Air Transport Association (IATA), an industry body, says Saf production last year was about 300m litres – just 0.1 per cent of global aviation fuel demand.
In June this year, Air New Zealand also trialed its first "book and claim" Saf transaction as part of the World Economic Forum’s Saf Certificate (Safc) pilot.
The airline participated in the pilot in partnership with Saf supplier SkyNRG and its corporate customer PwC New Zealand. Like a renewable electricity certificate, a Safc represents the environmental attributes of a metric tonne of neat Saf and can be sold unbundled from the physical fuel.
Each Safc has at least two connected carbon reduction claims – one that can be made by the airline to reduce its Scope 1 emissions, and another that can be claimed by a user of aviation services (in this case, PwC New Zealand) to reduce its Scope 3 emissions.
Via the pilot, Air New Zealand purchased Saf claims related to a volume of 5000 metric tonnes (mt) of Saf. The Saf volume delivered had a carbon intensity of 14,883g CO₂e/MJ, or 0.655mt CO₂e/mt Saf, and reduced emissions by 3.26mt CO₂e/mt Saf compared to fossil jet fuel.
The airline therefore reduced its Scope 1 footprint by 16,306mt CO₂e. The purchased Saf claims related to the total volume of Saf, and emissions reductions are verified and accredited by an independent third party: SCS Global Services.
These emissions reductions were not included in the airline’s greenhouse gas inventory given the trial nature of the project.
“By enabling the investment in Saf regardless of geographic location, book and claim Saf transactions have the potential to play a vital role for airlines and their customers with decarbonisation targets in regions where there is no Saf produced and/or where the cost of Saf is high.”
Grant Bradley has worked at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.