3 truths (and no lie) on sustainable travel and carbon compensation

For travel companies, as for any others, the first steps of a sustainable transformation can be uncomfortable yet it is unavoidable. It is often perceived at first as complex, timely, requiring heavy financial investments, and despite trying to do things right, there is still a fear of unconsciously making mistakes that can end up in a greenwashing scandal.

While it is unquestionable that reducing and avoiding GHG emissions is the only realistic and possible strategy, for a lot of companies it will take years to build the infrastructure allowing to operate in a 100% climate-compatible way. Time is a critical currency of climate change, and our wallet is empty. Take the portion of travel dependent on air, we can’t just stop all passenger traffic until the entire industry is done reinventing itself 360 degrees.

According to the UN, carbon compensation is one of the instruments to reach the 2050 net-zero emissions target. Here is why and how, today, compensation plays a key role on our way towards sustainable travel, from scope 1 to 3.

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Scope 1: The race for technological readiness at scale

Scope 1 emissions stem from sources that a company owns and can therefore directly control, such as fuel combustion for office heating or the operation of vehicles. As such, scope 1 emissions are the ones in which companies can have the biggest and most immediate lever to avoid and reduce their emissions.

While this is straightforward and often requires a one-time financial effort, the case is more complex in the most emission-heavy part of travel: aviation. Scope 1 emissions indeed account for 80% of the airline industry’s overall reported emissions. So what pragmatic solutions are available, today?

- Alternatives to fossil fuels, that will help the airline industry become CO2 neutral, are already a reality. Sustainable Aviation Fuel (SAF), which has the potential to reduce flight related emissions by up to 80%, represents less than 0.1% of global aviation for now. The first foreseeable milestone of production will be achieved in 2030 — when SAF will account for 10% of the fuel mix.

- Switching to engines with different types of propulsion, such as hydrogen- or electricity-powered propulsion could be another alternative. Though, these technologies are in the very early stages of pre-development. Airbus has the ambition to deliver the first emission-free, hydrogen-powered commercial aircraft by 2035.

While the above solutions are being developed to reach the necessary scale, balancing current emission levels can only be achieved through strategic carbon compensation.

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Scope 2: Reinventing infrastructures

Scope 2 are a company’s indirect emissions, which are attributed to the generation of the energy a company buys, e.g. electricity for heating, cooling, or steam.

It has been proven that scope 2 emissions are 55% of OTAs (Online Travel Agency) and TAs (Travel Agent) total emissions, mainly to cooling data centers, or providing their offices with electricity. Their sustainable transformation strategy should first aim at increasing the share of energy from Renewable Energy Sources (RES) in their energy mix.

However, switching to 100% green energy is often easier-said-than-done, as it currently comes with a main roadblock: infrastructure readiness. According to the International Energy Agency (IEA), 88% of global electricity generation will come from RES only at a 2050 horizon. Yet another reason to believe that we are far from having an infrastructure capable of providing for our needs in the short term.

As long as this is the case, compensating for unavoidable emissions is the only way to bridge the infrastructure gap between available scope 2 related supply and companies’ claims towards neutrality.

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Scope 3: Navigating uncertainty

If reducing scope 1 and 2 emissions can sometimes be a challenging endeavor, it becomes even more difficult for scope 3, indirect un-owned emissions along the value chain of the company. They include both upstream and downstream emissions. Even reporting accurately on scope 3 emissions can be complex, as companies struggle to define which emissions to include, how to allocate them, and which to report on.

Take the example of John Do, from Company A, buying a plane ticket from an airline via his usual TMC (Travel Management Company). Are John Do’s emissions for that flight part of…

• The airline’s scope 1 (from fuel combustion)?
• Company A’s scope 3 (indirect emissions, upstream in the value chain from business travel)?
• The TMC’s scope 3 too (indirect emissions, downstream in the value chain from the product offering)?

In the case above, one way to solve the uncertainty about scope 3 emissions, is by having the TMC include carbon compensation within its offering (along John Do’s booking flow), as it would enable company A to target its scope 3 emissions.

Whether to include the emissions from the end customer as scope 3 emissions is still under discussion for most TMCs/OTAs/TAs. Even if these intermediaries may not be responsible for reducing them, they should at least participate in raising awareness of these emissions.

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