Delta commits $1B to become world’s 1st carbon neutral airline

February 16, 2020 |

In Georgia arrives news that starting March 1st, Delta is making a $1 billion commitment over the next 10 years to mitigate all emissions from its global business going forward. Their goal? To invest the money in driving innovation, advancing clean air travel technologies, accelerating the reduction of carbon emissions and waste, and establishing new projects to mitigate the balance of emissions.

Here’s the story on how this ties in with the recent Gevo deal and Northwest Advanced Bio-Fuels offtake agreements, how they plan to mitigate emissions across Delta’s business globally – in the air and on the ground, what approach they are taking for the next 10 years, how biofuels plays into all this, and more.

The $1 billion plan

Just two weeks ago, The Digest reported on Delta’s historic SAF contract with Pacific Northwest biofuels venture – one of the largest airline offtake agreements of its kind to purchase sustainable aviation fuel from Northwest Advanced Bio-Fuels. And The Digest reported in December about Delta’s offtake agreement with Gevo for 10 million gallons per year and what that means for sustainable aviation fuel.

So is this latest announcement a cherry on top? No, we think it’s much, much more. It’s beyond going green. It’s delving into uncharted territory that no airline yet has delved into.

First, let’s point out that Delta is a financially secure airline – a record-breaking one at that. Delta gave a lovely Valentine’s Day gift to all employees with their $1.6 billion in profit sharing, the largest profit sharing given to employees by any U.S. based company – ever! Following the extraordinary $1.6B profit sharing payout, Delta unveiled a ‘thank you’ airplane featuring all 90,000 employee names – yes, all 90,000 employee names. How cool is that?

Second, let’s point out that the aviation industry accounts for roughly 2 percent of global carbon dioxide emissions. Delta’s carbon footprint is its largest environmental impact, with 98 percent of emissions coming from its aircraft. Delta’s carbon strategy will account for emissions across its business – both in the air and on the ground.

So how will they do it? Here is how the company is focusing its efforts to become carbon neutral:

  • Carbon reduction: Reducing Delta’s carbon footprint through enterprise-wide efforts to decrease the use of jet fuel and increase efficiency. Areas of focus include an ambitious fleet renewal program, improved flight operations, weight reduction, and increased development and use of sustainable aviation fuels.
  • Carbon removal: Investing in innovative projects and technology to remove carbon emissions from the atmosphere that go beyond the airline’s current commitments, and investigating carbon removal opportunities through forestry, wetland restoration, grassland conservation, marine and soil capture, and other negative emissions technologies.
  • Stakeholder engagement: Building coalitions with our employees, suppliers, global partners, customers, industry colleagues, investors and other stakeholders to advance carbon reduction and removal goals and maximize our global impact.

“Delta’s investment will create new projects and methods to reduce its carbon footprint, benefit global communities and make it easier for other organizations to explore similar options to address their own carbon footprints – all while minimizing reliance on today’s limited carbon offset markets. To support this strategy, Delta will allocate some of its financial commitment into investment vehicles, including a dedicated fund focused on achieving its carbon neutral ambition.”

“Delta’s journey to carbon neutrality and its $1 billion investment build on its industry-leading voluntary sustainability efforts. The Delta Environmental Sustainability Principles will guide the airline’s efforts to advance its path to carbon neutrality and overall sustainability. They are:

  • Action – Makeprogress continually by leveraging the tools of today even as we work to drive progress on a global scale. Embed environmental impact as a consideration in every business decision.
  • Innovation – Investigate, enable and advance new projects, innovative technologies and operational efficiencies to substantially reduce and mitigate emissions and our overall environmental footprint.
  • Collaboration– Engage with employees, suppliers, global partners, customers, investors and other stakeholders with the understanding that environmental protection must be a shared goal.
  • Evolution– Be nimble in evolving and adjusting in response to the latest scientific findings and technological developments.
  • Transparency– Continue to publicly report on our goals and progress, aligned with leading disclosure frameworks and standards, and track efforts and achievements through our robust governance structure.

2020 will see a number of milestones that demonstrate Delta’s progress and commitment, and that Delta will share broadly as each of them launch.”

“From being the first and only U.S. airline to voluntarily cap greenhouse gas emissions at 2012 levels, to adding more than 80 new aircraft in 2019 in an effort to renew its fleet with aircraft that are 25 percent more fuel efficient than the aircraft they are replacing, Delta has been undertaking a multi-year effort to achieve more sustainable air travel.”

“As part of its commitment, Delta has partnered with industry innovators to advance the development and production of sustainable aviation fuels, including its recent partnership and offtake agreements with Northwest Advanced Bio-Fuels and Gevo. The airline also has partnered with the international advocacy organization Global Citizen on Global Goal Live: The Possible Dream event, to help reach United Nations Sustainable Development Goals, focusing on sustainability, gender equality and human capital.”

Reactions from the inside

Mark J. Riedy, Partner at Kilpatrick Townsend and Chair of the firm’s Energy group, has been intimately involved in the transactions having negotiated and drafted the Gevo and NWABF deals and representing more than 75% renewable jet fuel developers. He had this to say about the Gevo and NWABF deals:

“Each of these agreements are significant in that Gevo’s transaction represents first of its kind for Delta and NWABF agreement represents largest ever volume-based offtake agreement in renewable jet industry worldwide. In addition, Delta has invested mid-2019 in the NWABF project. These are the initial forays into executing on their $1B carbon neutral plan.”

Basically, this is just the beginning of Delta’s giant step into the renewable biojet industry. “With these agreements, it currently has taken a lead position worldwide,” said Riedy. “Several others in the renewable biojet industry are in stealth mode now, so there is more to come. A vast majority of them are flying below radar screen.”

Ed Bastian, Delta’s CEO said, “There is no substitute for the power that travel has to connect people, which our world needs today more than ever before. As we connect customers around the globe, it is our responsibility to deliver on our promise to bring people together and ensure the utmost care for our environment. The time is now to accelerate our investments and establish an ambitious commitment that the entire Delta team will deliver.”

“There’s no challenge we face that is in greater need of innovation than environmental sustainability, and we know there is no single solution. We are digging deep into the issues, examining every corner of our business, engaging experts, building coalitions, fostering partnerships and driving innovation,” said Bastian. “We are on a journey, and though we don’t have all the answers today, we know that our scale, along with investments of time, talent and resources will bring meaningful impact to the planet and ensure the sustainability of our business for decades to come.”

“When customers choose to fly Delta, they should feel they’re making a statement about taking care of our planet,” said Bastian. “Our commitment to carbon neutrality means flying with Delta represents far more than a great travel experience – it’s about joining arms to create a better world.”

Watch video comments from Ed Bastian, Delta’s CEO, about this announcement on LinkedIn here.

Bottom Line

Delta has strong evidence of looking at innovative ways to be more financially secure, more sustainable, more supportive of employees, but this latest announcement goes beyond being green, beyond what any other airline has committed to thus far. They are charting their own course and putting the money behind it to become the first carbon neutral airline globally so stay tuned. The need out there is overwhelming with how many billions of gallons of fuel commercial and freight airlines consume each year so expect lots more developments in the coming years.

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