You can find out more on voluntary carbon offsetting from the New Zealand Government. See the Ministry for the Environment’s Guidance for voluntary carbon offsetting.
How much environmental damage does flying cause?
The Intergovernmental Panel on Climate Change (also known as the IPCC) indicates that aviation contributes around 3% of the world's total carbon dioxide (CO2) emissions.
Why do we refer to carbon - is carbon the only greenhouse gas?
No, there are seven main greenhouse gases:
- Carbon dioxide (CO2), mainly from fossil fuel use
- Methane (CH4), mainly from animals and waste
- Nitrous oxide (N2O), mainly from agriculture
- Hydrofluorocarbons (HFCs), mainly from refrigerants
- Sulphur hexafluoride (SF6), mainly from the electricity industry
- Perfluorocarbons (PFCs), mainly from aluminium production
- Nitrogen trifluoride (NF3), mainly from production of silicon wafers, liquid crystal displays and silicon-based solar cells
Usually, all greenhouse gases are expressed as carbon dioxide equivalents (CO2-e) which is a metric measure used to compare the emissions from various greenhouse gases on the basis of their 'global-warming potential' by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming potential. For example, the global-warming potential for methane is 25 and for nitrous oxide is 298. This means that emissions of 1 million metric tonnes of methane and nitrous oxide respectively is equivalent to emissions of 25 and 298 million metric tonnes of carbon dioxide.
This is why carbon offsetting is typically transacted in 'carbon', or CO2-e.
What is carbon offsetting?
A way to reduce the impact your air travel has on the environment is to purchase emissions reductions 'carbon credits' from environmentally beneficial projects.
Permanent forests and sustainable, low-energy projects generate emission reductions that can be measured as carbon credits. These carbon credits can then be purchased by customers to address the carbon emissions from their air travel.
This concept is known as carbon offsetting. Anyone can purchase carbon credits and use them to offset their own carbon emissions.
In simple terms, offsetting one tonne of carbon means there will be one less tonne of carbon dioxide in the atmosphere than there would otherwise have been.
What are carbon credits and how do they work?
Carbon credits are used to deliver your carbon offset. A carbon credit represents one tonne of carbon (or equivalent greenhouse gas) emissions reduced.
Carbon credits are issued to projects in New Zealand and overseas which can demonstrate that they have been verified to reduce or remove carbon emissions. For example, if a project has been verified to reduce emissions by 10 tonnes, then it is eligible to receive 10 carbon credits.
When you offset your carbon, you purchase and retire the equivalent amount of carbon credits, supporting projects which reduce or remove carbon emissions.
When the carbon credit is retired (or 'cancelled' in some registries) it is removed from circulation in that registry and cannot be used again by another buyer.
Where do carbon credits come from?
Carbon credits are issued from projects that prevent greenhouse gas emissions from entering the atmosphere or remove or absorb greenhouse gas emissions once they exist in the atmosphere.
The Ministry for the Environment has stated that for a voluntary emissions offset to be considered credible, it must be:
- Real, measurable and verified
- Not double-counted
- Address leakage
Air New Zealand source carbon credits that adhere to these criteria.
How is carbon offsetting transacted?
Carbon offsetting is typically transacted in metric tonnes of carbon dioxide equivalent (CO2-e). Purchasing one carbon credit means there will be one less tonne of carbon dioxide (or equivalent greenhouse gas) in the atmosphere than there otherwise would have been. Once a carbon credit is purchased it then needs to be retired permanently to remove it from circulation, effecting the 'offset'.
How does carbon offsetting work in the context of aviation?
Air New Zealand passengers and business customers can offset the carbon emissions generated by their flights. The emissions for each flight are calculated on a per-seat basis. Seats in Premium Economy and Business Premier™ take up more space in the aircraft and accordingly represent a greater share of the carbon emissions generated on the flight. Each passenger can pay to offset the emissions caused by their share of the flight's emissions.
Does Air New Zealand offset its carbon emissions?
At Air New Zealand, we use FlyNeutral to offset the carbon emissions associated with our staff travelling for work.
How are my emissions calculated?
Emissions from Air New Zealand travel are calculated under FlyNeutral taking into account:
- The distance travelled on your journey (greater circle distance)
- The class of travel you flew (whether Economy, Premium Economy or Business Premier)
- 'Emissions conversion factors' for greenhouse gas company reporting published annually by the UK Department for Business, Energy & Industrial Strategy (BEIS), as endorsed by the New Zealand government for voluntary greenhouse gas reporting. These factors incorporate Global Warming Potentials (GWPs) from the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4)
Air New Zealand currently does not include the impact of radiative forcing in its calculation of individual carbon emissions, as scientific uncertainty remains over the non-CO2 effects of aviation. Air New Zealand currently adopts the position recommended by the UK Department of Business, Energy and Industrial Strategy in its 2018 Methodology Paper for Emission Factors Final Report which notes there is no suitable climate metric to express the relationship between emissions and climate warming effects from aviation. This is an area of active research and Air New Zealand is monitoring the research and guidance in this space.
Contributions to New Zealand biodiversity projects
Is my biodiversity contribution a carbon offset?
No. This contribution is over and above your carbon offset. It goes directly to projects that drive positive biodiversity and / or climate outcomes in New Zealand.
The offsetting component works out your share of emissions from your flight. It then matches those emissions with carbon credits. These credits come from real projects, with measurable and permanent emissions reductions. They are independently verified by a qualified third party.
How much of my FlyNeutral payment goes to New Zealand projects?
The recommended FlyNeutral price directs 25 percent of collected funds to carbon credits that offset all the carbon emissions associated with your flight. The remaining 75 percent is directed to third party projects to be used exclusively for purposes that will accelerate positive climate or biodiversity outcomes in New Zealand.
Air New Zealand does not profit from FlyNeutral. We don’t charge a margin on the carbon credits, or retain any FlyNeutral funds.
Which projects in New Zealand does FlyNeutral support?
What if I just want to offset my carbon emissions and not pay for biodiversity?
We need to improve New Zealand’s biodiversity as well as offset carbon. That’s why FlyNeutral doesn’t offer an offset-only option.
If you only want to offset, you could use Toitū Envirocare’s Travel Emissions Calculator.
Do I receive a tax credit for using FlyNeutral?
Offsetting emissions under FlyNeutral
What are the emission reduction projects in FlyNeutral?
How much are the carbon credits in FlyNeutral?
We calculate your recommended FlyNeutral payment on a portfolio price basis. At the moment this is $23.48 per tonne of CO2 measured.
25% of this price purchases carbon credits to match the emissions generated by your share of the flight. The remaining 75% goes to New Zealand climate and biodiversity projects.
Air New Zealand doesn’t charge a margin on FlyNeutral carbon credits. In fact we don’t make any money at all from FlyNeutral.
How can you be sure your chosen carbon credits projects reduce carbon emissions?
We choose projects that are validated and verified by an approved third-party. They meet leading carbon market standards, such as the Verified Carbon Standard. Projects must meet the following criteria,
- A real project
- Measurable and permanent emission reductions
- Additional to a business-as-usual scenario
- Independently verified by an approved third party.
How is a carbon credit created?
Accredited projects earn carbon credits through approved activities. Approved registries issue the credits, once accredited third parties verify the activities. FlyNeutral can then buy those carbon credits to cancel out your carbon emissions. Each carbon credit has a unique serial number, to ensure it can’t be counted twice.
Who is ClimateCare?
ClimateCare has over 20 years' experience in international carbon markets and carbon reduction programme management. ClimateCare manages a number of the world's largest carbon offset programmes on behalf of its government and corporate partners.
Does Air New Zealand make a margin on the carbon credits purchased under FlyNeutral?
No. Air New Zealand doesn't make any margin on the carbon credits purchased under FlyNeutral nor does Air New Zealand make any money on the operation of FlyNeutral.
ClimateCare is paid a small fee to cover administrative costs associated sourcing and supplying carbon credits, quality advisory services and registry account management.
Retirement at registry
How do I know that the carbon credits I purchase under FlyNeutral actually offset my emissions?
The FlyNeutral carbon credits are held in carbon credit registry accounts. When carbon credits are bought, those credits are removed from circulation, effecting the offset. This means they are 'retired' in voluntary market registries where the global projects are registered. Retirements take place twice a year.
We track all carbon credits purchased under FlyNeutral and the retirement of them is reviewed every year.
How and why is a carbon credit retired or cancelled?
Retiring a carbon credit permanently removes it from circulation in all registries. It means it has been matched to a carbon emission, and thus effects the offset.
Which registries is FlyNeutral using?
What is the IHS Markit Environmental Registry?
The IHS Markit Environmental Registry is the largest, global voluntary registry for carbon, water and biodiversity credits, based on volume, number of environmental standards on the registry and number of customers. It provides full tracking from issuance to transfer to retirement or cancellation for more than 250 million credits.
When are FlyNeutral carbon credits retired?
We follow best practice and retire carbon credits within 12 months of the offset period. The retirement happens in batches twice per year.
Relationship of FlyNeutral with the Emissions Trading Scheme
Is FlyNeutral part of the New Zealand Emissions Trading Scheme (NZETS)?
No. Under the New Zealand Emissions Trading Scheme Air New Zealand must:
- Report our greenhouse gas emissions from domestic flight fuel use
- Give the government a matching number of emission reduction units
We meet al our NZETS obligations. We manage all compliance requirements at our own cost, not by a separate charge to customers. Complying with the NZETS is not the same as offsetting.
You can find out more information from the Ministry for the Environment.
Why offer FlyNeutral when you already comply with the NZETS?
We offer the option for our customers to offset their flights because it is important to reduce the amount of carbon in the atmosphere as soon as possible, and because compliance with the New Zealand Emissions Trading Scheme does not necessarily mean that carbon is being 'removed' from the atmosphere. You can find more information from the Ministry for the Environment.
When I offset, am I paying for Air New Zealand's emissions under the NZETS?
No. FlyNeutral operates separately to the New Zealand Emissions Trading Scheme. Funds received from customers for offsetting under FlyNeutral do not go towards our compliance costs associated with the New Zealand Emissions Trading Scheme. We comply with our obligations under that scheme and manage all compliance requirements at our cost.