Air New Zealand has made headlines by becoming the first major airline to retreat from a climate goal of cutting carbon emissions by 2030, citing challenges in securing more efficient aircraft and sustainable jet fuel.
The airline’s decision highlights the broader struggles within the aviation sector, which is responsible for approximately 2% of global CO2 emissions. The industry’s efforts to mitigate its environmental impact include modernizing fleets and adopting Sustainable Aviation Fuels (SAFs), but these initiatives face significant obstacles.
In 2022, Air New Zealand set an ambitious target to reduce its emissions by nearly 29% by 2030, starkly contrasting the global aviation industry’s more modest 5% reduction goal for the same period. However, recent developments have forced the airline to reconsider this target.
“In recent months, and more so in the last few weeks, it has also become apparent that potential delays to our fleet renewal plan pose an additional risk to the target’s achievability," said Greg Foran, Air New Zealand’s Chief Executive Officer.
SAFs are a cornerstone of the aviation sector’s strategy to lower emissions. Despite their potential, airlines have encountered significant challenges securing sufficient quantities of SAF.
"The price of SAF is more expensive than traditional fuels, and there is not enough capacity to produce that at scale,” noted Ellis Taylor from aviation analytics firm Cirium.
SAF comprises less than 1% of the total aviation fuel market, reflecting its limited production capacity. Scaling up production to meet global aviation needs presents significant challenges due to restricted feedstock availability and insufficient production facilities.
SAF is approximately four times more expensive than conventional jet fuel, creating substantial economic barriers to its widespread adoption. Without significant policy incentives and subsidies, achieving economic viability for SAF remains daunting.
Most SAF is produced from food waste, such as cooking oil and animal fat. Future sources, including energy crops, agricultural residues, and forest biomass, require further development in chemical engineering processes to become viable feedstocks.
The production of SAF faces environmental concerns related to land use and sustainability. There isn’t enough land or renewable energy potential to produce all the SAF needed for the aviation industry. Additionally, the environmental impact of large-scale biomass production and its competition with food production are significant issues that must be addressed.
The technology to convert feedstocks into SAF is still evolving, presenting a barrier to large-scale adoption. Furthermore, SAF requires regulatory approvals for higher blends with conventional jet fuel, adding another layer of complexity to its deployment.
Adequate policy support, including tax benefits and subsidies, is crucial for developing and adopting SAF. Additionally, significant capital investments are required to build the necessary infrastructure for SAF production, highlighting the need for robust financial backing and strategic planning.
The aviation industry has also been grappling with delays in new aircraft deliveries. Boeing and Airbus have struggled to meet delivery schedules due to supply chain disruptions, impacting airlines globally.
"The delays in new aircraft deliveries are affecting airlines around the world, with both Boeing and Airbus under-delivering new jets over the last few years, largely due to snags in the wider supply chains of the manufacturers," Taylor added.
Boeing, in particular, has faced numerous challenges. The aerospace giant recently agreed to plead guilty to a criminal fraud conspiracy charge related to two fatal crashes involving its 737 Max planes, resulting in the deaths of 346 passengers and crew. Additionally, Boeing has faced scrutiny following an incident where a door panel in a Boeing plane operated by Alaska Airlines blew out soon after take-off, forcing an emergency landing.
Despite abandoning its 2030 emissions target, Air New Zealand remains committed to the aviation industry’s goal of achieving net zero emissions by 2050. The airline now focuses on developing a new short-term target to guide its sustainability efforts.
Air New Zealand has launched Flight NZ0™, a pledge to achieve net zero carbon emissions by 2050. Despite dropping its 2030 carbon intensity reduction target due to industry challenges, the airline remains focused on sustainability through next-generation aircraft technology, fleet modernization, and SAF. These efforts are complemented by operational efficiencies and credible carbon removal solutions to address remaining emissions. Additionally, Air New Zealand offers voluntary carbon credit purchases to support emission reduction and biodiversity projects.
