Carbon Offsetting Scenario Simulation

Thomas Schroder Director Marketing & Communications

South Pole Group

AgendaSouth Pole Group Page 2

Recommended Best Practices for Carbon

Offsetting 02

Some Aviation Sector Examples 11

Introducing the Group Exercise 19

Presentation of the results 20

Appendix and FAQs 21

Some Aviation Sector ExamplesSouth Pole Group Page 3

Trends in Airlines Carbon Offsetting

British

Airways,

SAS

Virgin Australlia Delta,

Lufthansa-Swiss

AirPlus, TUI Travel,

Qantas, Jetstar, Easyjet,

Continental AirFrance-KLM

Cathay Pacific

Dragon Air

Malaysia, Air New

Zealand, Atlas Blue,

Jet Blue, Copa Airlines,

NatureAir, Austrian

Airlines

Virgin America,

TAP Thai

Airways United,

Japan Airlines

Kenya Airways,

South African

Airways

United (corporate),

Delta (carbon

neutral growth)

Mango, Sri Lankan

Airlines LATAM

(corporates)

2005-2006

2007

2008

2009

2012

2013

2015

Launch date of offsetting scheme

Flights within EEA

covered by ETS

Page 4South Pole Group

Source: South Pole Group, 2016

Qantas’ Fly Carbon Neutral programme

• Fuel efficient fleet, facilitated the Sustainable Aviation

Fuel industry in Australia, and engaged in aircraft

weight reduction initiatives.

• In addition, 2.5 million tonnes of carbon emissions

have been offset since 2007

• Fly Carbon Neutral programme focuses on climate

change mitigation, protection of wildlife and

nourishing communities.

• Offer brazil nuts to enhance funding to the offset

project and providing Qantas’ passengers with a

sustainable snack

A Leader, Aiming HighSouth Pole Group Page 5

LATAM’s sustainability program

• Stated goal to be “A leader and worldwide reference in

climate change”

• A focus on environmental management system; risk

management; eco-efficiency; sustainable alternative

energy; internal capacity development; transparency;

value chain; emission offsets; communications

• Offsets ground emissions in pursuit of carbon neutrality

Align offsetting with strategic prioritiesSouth Pole Group Page 6

Air New Zealand’s carbon offset programme

• New Zealand Emissions Trading Scheme (ETS) offsetting domestic flights

• Option for passengers to also offset as part of booking process

• Projects protecting New Zealand’s native forestry projects

Align offsetting with strategic prioritiesCathay Pacific’s FLY greener programme

• FLY Greener Programme offsets staff business

travel, carriage of passengers, and selected

ground activities

• Passengers can easily calculate emissions

• The offset projects make a contribution in regions

where Cathay Pacific has operations

KLM’s CO2ZERO Programme

• 20% reduction in its CO2 emissions per

passenger by the year of 2020

• Strong focus on market for sustainable biofuels,

and also involving passengers in offsetting

emissions

• Preference for Gold Standard Projects

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Align offsetting with strategic priorities

Virgin America’s offsetting program

• Option for passengers to offset the carbon footprint

of their flights on the inflight entertainment system

• Offset HQ carbon footprint

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Scandinavian Airlines’ Convention Program

• Priority to target organizers of international conferences and events

• Give a range of options for the organizer to choose from

IATA Carbon Offset Program

• Some IATA’s members such as Thai Airways

and South African Airways purchase via IATA

• Includes a Carbon Calculator methodology

• Offset supplier, Climate Care, provides high

quality carbon credits

• IATA assists airlines with the implementation

• Offers a portfolio of offset projects with:

– large geographical coverage

– social and economic benefits for local

communities.

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.

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RecommendedCheck List of Best Practices in Carbon Offsetting

Good practices checklistSouth Pole Group Page 11

1. Decide on focus and approach

2. Establish suitable criteria that reflect priorities and requirements

3. Plan to communicate externally and internally

4. Get ready to answer challenging questions

5. Select a reliable, valuable and reputable solutions provider / supplier

1. Decide on focus and approachSouth Pole Group Page 12

• What is the purpose? (e.g. compliance vs. voluntary)

• What is the objective? (e.g. offsetting own emissions, industry growth emissions, EU ETS

compliance, as a client service offering, etc.)

2. Establish criteria that reflect your prioritiesSouth Pole Group Page 13

Make a decision on:

• Standard

• Type

• Project location

• Additional (social) benefits

Trends across all sectors:

• Most used standard:

37% VCS, 12% VCS-CCB,

20% CAR, 19% Gold

Standard, 12% other

• Wind is most popular project

type (25%)

• Major project locations: US,

India, Indonesia, Turkey,

Kenya and Brazil Source: Ecosystem Marketplace 2016

3. Plan to communicate externally and internallySouth Pole Group Page 14

4. Get ready to answer challenging questionsSouth Pole Group Page 15

“Offsetting is greenwashing by an industry that must stop growing”

- Compensating unavoidable emissions makes a difference that would not otherwise

occur.

- Moreover, it is an addition to other activities in a basket of measures, e.g. technology,

operational measures (e.g. route optimisation), and sustainable biofuels.

“Do the emission reduction projects really have a positive impact?”

- Yes. Verification and certification procedures ensure additionality, sound practice and

measure positive social impacts.

“Carbon projects can actually be bad for the environment”

- Certain forestry and large hydro projects are controversial because they have been

harmful to local ecosystems. Supporting different project types with high quality

standards is therefore advisable.

5. Select a reliable partner and supplier South Pole Group Page 16

Check the reputation, service, track record and size of the supplier

Review other useful solutions and services that a partner can offer

Consider a long term supplier agreement, to reduce transaction costs

Run a tender process to engage in competitive bids

• Take action to reduce the amount of CO2 in the atmosphere and fight climate change

• Gain experience with carbon markets and providers

• Benefit from better deals and risk awareness / management

• Differentiation from competitors and demonstrating climate leadership

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Benefits of pre-compliance to CORSIA

Introducing the Group ExerciseSouth Pole Group Page 18

Presentation of the resultsSouth Pole Group Page 19