Cargo aviation and the challenge of sustainability

1.09.2022 — Dan Kreibich on behalf of SQUAKE

The aviation industry is currently one of the largest emitting industries as its global share of CO2 emissions sits at around 2.1% of the total (“Contribution of the Global”, n.d.). A substantial part of those emissions come from passenger and cargo flights. The following research will focus on the emissions and sustainable efforts made by cargo airlines, and the vital role it plays in decarbonizing the overall aviation industry.

Methodology

This research builds on previous research done by SQUAKE’s analyst team which examines how the aviation industry is facing the challenge of sustainability. We started by defining a list of 92 cargo airlines we would include in the scope of our study. To get an overview of the size and claimed ambition of the different airlines, general information was collected about the companies, the amount of cargo carried (in tonnes), and whether or not they publish an ESG or GHG report.

Then more specific, emissions-related data were captured; this included the total emissions produced by carrying cargo from the airline, the emissions per ton kilometer, and how the emissions were divided by scope. Finally, our research unit examined all types of sustainable initiatives implemented by cargo airlines: claims for carbon neutrality, usage of internal goals to reduce and/or compensate for emissions, and sustainable aviation fuel.

The challenge of reconciling hypergrowth with decarbonization

The emissions generated by the entire transportation industry were around 7.3 Gt of CO2 equivalent in 2020, which is 22% of the worldwide emissions. Aviation alone is responsible for around 14% of it. When looking deeper into this segment, you can see that cargo transportation emits 171 Mt of CO2 divided between dedicated freighter aircraft for 70 Mt of CO2 and belly freight for 101 Mt of CO2 (Tiseo, 2021). This is a significant increase from 2013 when the CO2 emitted by air cargo was only around 114 Mt CO2, which shows that the aviation industry and its emissions have been steadily growing over the last decades.

The growth of the aviation industry (including air cargo) is a result of the following factors:

• Urban fringes and populations expanding and the COVID-19 pandemic preventing people from going out
• The substantial growth of demand for e-commerce (“The Future of Air Freight”, 2021)
• Sea freight shortages (“The Future of Air Freight”, 2021)
• Diversification of supply chains as businesses has started moving their manufacturing sites from China to other places like Mexico and Canada (“The Future of Air Freight”, 2021).

With all these factors putting the industry under pressure and keeping things as is, emissions are expected to increase by around 300% (Topham, 2019). Airlines, in order to reach their ambitious goals, have to take drastic measures to reduce emissions and improve their overall efficiency.

Forecasts for emissions-related growth are more ambiguous as several scenarios are being drafted (Topham, 2019). If airlines begin improving infrastructure and implementing technologies and other sustainable initiatives such as hydrogen engines, SAF, and/or carbon compensation, then a scenario with net zero emissions could be achieved by 2050 (Payan et al., 2015). It is detrimental that airlines do everything they can to prevent emissions from getting to this level.

Measures taken

The aviation industry is not standing still and has been setting goals to reduce emissions. In 2016, ICAO created The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to help reduce carbon emissions within the industry (“Carbon Offsetting and Reduction”, n.d.).

The goals set by CORSIA are:

• to improve fuel efficiency by 2% annually
• to achieve carbon-neutral growth starting in 2020 (“Carbon Offsetting and Reduction”, n.d.).

88 countries have agreed to participate in the scheme. Amongst those countries where cargo airlines are located, 58% joined the initiative back in 2020 and a further 18% are planning to join by 2027, including most of the largest emitters such as China, the US, Russia, India, Australia, and several European countries.

While many cargo airlines are located within countries that follow CORSIA’s framework, they have still struggled with achieving their second goal. Of the 92 airlines examined here, 77% claimed they want to reduce their carbon emissions while only 44% have explicitly stated they want to become carbon neutral, and 40% claim to have set internal goals to achieve these targets.

Another strong signal of the sustainable commitment of an airline is to look at their adoption of the only two immediate solutions to reduce flight-related emissions:

• Sustainable aviation fuel -> 43% of the cargo airlines within the research are using some SAF. It is important to note that some of the airlines have only recently begun implementing it which means the blend of SAF in use is relatively small.
• Carbon compensation -> 53% of the airlines do compensate for their emissions while 63% offered some form of compensation to their customers.

In general, it was also found that larger airlines use SAF and carbon compensation more than smaller airlines. Of the 10 largest airlines, 8 used SAF. Of those same 10 airlines, 9 offset their emissions.

First transparency…

While doing our research to gather the above data, it became obvious that the overall industry still had room for improvement when it came to being transparent about their emissions.

Only 32% of airlines published a GHG report or ESG report and 27% of cargo airlines have given values for CO2 emissions. Much of this data lacked depth and accuracy as the emissions per scope were not included by any airlines. It was sometimes unclear whether the airlines differentiated between their passenger and cargo emissions. Additionally, only 8.7% of the airlines gave values for CO2 emissions in grams per ton per kilometer (CO2/t-km). This study’s average emissions per ton kilometer were around 800 grams of CO2/t-km. British Airways Cargo had the greatest emissions with around 1016 grams of CO2/t-km, while Emirates SkyCargo had the smallest emissions within the study with around 555 grams of CO2/t-km. Comparing the average amount of CO2/t-km with findings from GLEC (1100 g CO2/t-km) (Green and Lewis, 2019) and DEFRA (1400 g CO2/t-km) (“2022 Government Greenhouse”, 2022), proves that cargo-airlines are most probably under-reporting.

…Then efficiency!

The second crucial finding within this study revolves around the load factor of cargo airlines. According to IATA, the amount of cargo carried in 2019 was around 231 million ton-kilometers (t/km) for an estimated total capacity of around 430 million t/km. This means the load factor within the entire cargo industry is only around 53.8%. On the way to building a more sustainable industry, load factor efficiency does represent an important lever to betterment. Emissions could be reduced substantially if airlines maximized their shipping potential, reducing the number of trips they needed to take. Of course, this is difficult to do as shipping schedules and routes are likely designed in a way that does not allow for the load factor to be much higher.

Conclusions

The air cargo industry has much to work on in terms of reducing its emissions. Cargo airlines have several options to help reduce their emissions. Those options include the following:

• Improving transparency when reporting emissions
• Improving the rate at which SAF and carbon compensation are implemented to avert further environmental destruction
• Improving the load factor of cargo planes

I would like to thank Yury Erofeev, Moritz Hake, Victoire Ferrari, Sophie Beier, our partners, and the remaining team at SQUAKE for the performed research and analysis.