Air New Zealand (ASX:AIZ) has announced it’s ditching its 2030 carbon emissions targets, almost literally saying that it’s too hard.
“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 company wrote on Tuesday.
The timing is interesting, given that the largest companies on the bourse in the position to do so will be required to report Scope 3 emissions at the end of FY25.
The changes were described as “generational” in their importance and many see Australia’s looming Scope 3 emissions rules as the biggest thing ASIC has done in decades.
Scope 3 emissions are emissions produced from products once they are sold into the world. For energy supermajors, they pose the largest headache – those companies sell fuel for vehicles which then produce emissions. Scope 3 emissions for energy companies will be, by their nature, staggering.
But hard rock mining projects will also have crosses to bear. An upcoming iron ore project in WA’s north partially backed by Rio Tinto has already declared Scope 3 emissions over 14,000,000 tonnes as the ore it exports its processed overseas, most likely in Chinese smelters.
Scope 3 emissions are probably going to be ignored by the everyday trading house, but, they do open up companies to eco-lawsuits – currently a hot topic in the US where the Supreme Court recently gave companies the right to effectively sue American government agencies.
None of that relates to AIr New Zealand specifically, but it’s all part of the same thematic which will likely give ESG superfunds a boost in relevance this time next year – if they can stop getting in trouble for investing in weapons manufacturers, that is.
At any rate – AIZ says it’s going to work on a new carbon target, one that it can control – which probably means they’re just going to change the way they measure carbon.
“Air New Zealand remains committed to reaching its 2050 net zero carbon emissions target. Our work to transition away from fossil fuels continues, as does our advocacy for the global and domestic regulatory and policy settings,” AIZ Chair Dame Therese Walsh said.
In reality, the only thing that’s ever actually led to an immediate drop in emissions, at least in Australia, was Gillard’s carbon tax. Mining lobbies paid squillions to attack the initiative on TVs and radios in Australian households every single night and day for months. It was eventually scrapped.
Try advocating for a carbon tax in the current political climate and you’ll be laughed out of a room, which is a shame, given the fact our actual real-world climate is killing more and more people each year with heat stroke.
AIZ last traded at 53cps.