New Zealand’s National Carrier Drops 2030 Emissions Reduction Target

An Air New Zealand plane is seen during game two of the Women's ODI series between New Zealand and Pakistan at Hagley Oval on December 15, 2023 in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)

Air New Zealand will remove its 2030 emissions reduction target, and withdraw from the U.N.-backed Science Based Targets initiative (SBTi) aimed at corporate action on climate change.

The airline’s goal to reduce its carbon intensity by 28.9 percent by 2030 (compared to 2019 levels) has now been scrapped due to several factors, including access to new planes and alternative jet fuel.

“Many of the levers needed to meet the target, including the availability of new aircraft, the affordability and availability of alternative jet fuels, and global and domestic regulatory and policy support, are outside the airline’s direct control and remain challenging,” the airline said in a statement to the market.

Air New Zealand CEO Greg Foran said in recent months, and more so in the last few weeks, it became apparent potential delays to their fleet renewal plan posed a risk to achieving the target.

“It is possible the airline may need to retain its existing fleet for longer than planned due to global manufacturing and supply chain issues that could potentially slow the introduction of newer, more fuel-efficient aircraft into the fleet,” he said.

“As such, given that so many levers needed to meet the target are outside our control, the decision has been made to retract the 2030 target and withdraw from the SBTi network immediately.”

The SBTi is a collaboration with the United Nations Global Compact and other groups that drives urgent corporate action on climate change.

Air New Zealand Will Work on New Target

Air New Zealand will now develop a new carbon emissions target that reflects these industry challenges.

The airline’s chair, Dame Therese Walsh, confirmed the company remained committed to at least reaching its 2050 net zero target.

“Our work to transition away from fossil fuels continues, as does our advocacy for the global and domestic regulatory and policy settings that will help facilitate Air New Zealand and the wider aviation system in New Zealand to do its part to mitigate climate change risks,” Ms. Walsh said.

The airline’s 28.9 percent target, validated by the SBTi, equated to a 16.3 percent reduction in absolute emissions over the period from 2019.

“Science-based targets validated by the SBTi show companies how much and how quickly they need to reduce their greenhouse gas (GHG) emissions to prevent the worst effects of climate change,” Air New Zealand said at the time.

“Setting a science-based target allows businesses to set a robust and credible carbon reduction target that is independently assessed to ensure it aligns with the latest climate science.”

The airline is listed on both the New Zealand’s Exchange (NZX) and the Australian Stock Exchange (ASX).

In the first half of the 2024 financial year, Air New Zealand revealed a net profit after tax (pdf) of $129 million, down 39 percent on the prior corresponding half.

What Are Australian Airlines Doing?

Australia’s national carrier, Qantas, has committed to reducing carbon emissions by 25 percent of 2019 levels  by 2030.

The airline also aims to have 10 percent of its fuel mix comprised of Sustainable Aviation Fuel (SAF) by 2030, and for that figure to rise to 60 percent by 2050.

Qantas said human-induced climate change is a “significant issue for the aviation industry” and has committed to Paris Climate Agreement targets in its latest annual report (pdf).

Qantas said climate risks include both “physical risks,” such as extreme weather events, and transition risks, including the development of alternative fuels and changes to government policy, law, and regulation.

On July 24, Qantas announced it had joined a new airline alliance to help boost global production of aviation biofuel. Qantas committed US$50 million ($76 million) from its $400 million climate fund towards the initiative.

The airline said SAF is one of the most effective tools for airlines to cut emissions.

Qantas Group CEO Vanessa Hudson added, “Aviation is one of the hardest sectors to decarbonise and it’s going to take partnerships across industries like this to help close the gap between supply and demand.”

Meanwhile, Australian competitor Virgin Airlines is aiming to cut its emissions by 22 percent by the year 2030.

Virgin Australia’s owner, Bain Capital, an American investment firm, pointed to the airline’s fleet renewal program as a key driver to meeting this goal.

For example, 35 new Boeing 737 aircraft will help deliver 15 to 17 percent emissions reductions per seat per trip, according to their statement.

Virgin, along with Qantas, aim for net zero by 2050, in line with the federal government’s goal.