FlyNeutral FAQs

Please refer to the Ministry for the Environment's Guidance for voluntary emissions offsetting until 31 December 2020 for more specific information on voluntary carbon offsetting.

General

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.

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.

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.

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.

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:

  • Transparent
  • Real, measurable and verified
  • Additional
  • Not double-counted
  • Address leakage
  • Permanent

Air New Zealand source carbon credits that adhere to these criteria.

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'.

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.

At Air New Zealand, we use FlyNeutral to offset the carbon emissions associated with our staff travelling for work.

Calculating emissions

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.

Offsetting emissions under FlyNeutral

The price of the carbon credits Air New Zealand has sourced for FlyNeutral is updated quarterly and is a blended portfolio price that represents an average cost of the credits in the project portfolio.

Carbon credits are issued from emission reduction projects that either:

  • Comply with the New Zealand government's Permanent Forest Sink Initiative (for New Zealand forestry projects selected) or
  • Are validated and verified by an approved third-party verifier as meeting globally leading carbon market industry standards (such as the Gold Standard). They must meet the following crucial criteria: A real project, with measurable and permanent emissions reductions, additional to a business-as-usual scenario and independently verified by a third party approved by that standard. Some standards, including the Gold Standard and the CDM Standard, also promote sustainable development in their emission reduction projects

Following compliance with the Permanent Forest Sink Initiative (or for the international projects, the relevant carbon standard as evidenced by third party validation and verification), carbon credits are issued on an approved registry (see below for more information about registries) with a serial number into the account of the developer of the emission reduction project.

All New Zealand native forest restoration projects supplying carbon credits to Air New Zealand for the FlyNeutral programme are managed and sourced by Permanent Forests NZ Ltd.

Permanent Forests NZ is a New Zealand-owned company specialising in the promotion and protection of forests for the role they play in reducing greenhouse gas emissions and addressing the threat of climate change.

All international emission reduction projects supplying carbon credits to Air New Zealand for the FlyNeutral programme are managed and sourced by 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.

The Gold Standard is a best practice methodology and a high-quality carbon credit label for the carbon market which promotes sustainable development in its emission reduction projects.

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 / cancellation at registry

The carbon credits for FlyNeutral are held in carbon credit registry accounts. Once customers buy the carbon credits for offsetting under FlyNeutral, those credits are removed from circulation, effecting the offset. This means they are either retired or cancelled (credits are 'retired' in voluntary market registries where the global projects are registered, or 'cancelled' in the NZ Emissions Trading Register where the PFSI projects are registered). Retirements and cancellations take place on a quarterly basis.

We track all carbon credits purchased under FlyNeutral and the retirement and cancellation of them is reviewed every year.

Retirement or cancellation of a carbon credit is the permanent removal of the credit from circulation in the registry system, effecting the 'offset'.

The carbon credits purchased by our customers for offsetting under FlyNeutral are retired or cancelled on a quarterly basis.

FlyNeutral uses the New Zealand Emissions Trading Registry for its New Zealand projects and the IHS Markit Environmental Registry for its international projects.

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. 

Best industry practice requires that carbon credits purchased for carbon offsetting be retired or cancelled within 12 months of the period being offset. To help support customers with this, retirements/cancellations of credits will occur on a batch basis every quarter.

Relationship of FlyNeutral with the Emissions Trading Scheme

No. Under the New Zealand Emissions Trading Scheme Air New Zealand has an obligation to report the greenhouse gas emissions generated from its fuel use on domestic flights and provide to the government a number of emission reduction units to match that number of emissions.

Air New Zealand fully complies with its obligations under the New Zealand Emissions Trading Scheme, managing all compliance requirements at our own cost, not via a separate charge to customers. Compliance with the regulatory requirements of the New Zealand Emissions Trading Scheme does not equate to offsetting.

Please refer to the Ministry for the Environment's Guidance for voluntary emissions offsetting until 31 December 2020 for more information.

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.

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.  

Please refer to the Ministry for the Environment's Guidance for voluntary emissions offsetting until 31 December 2020 for more information.