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Major Japanese airline becomes first to buy carbon credits
The purchase by All Nippon Airways boosts direct air capture. It also shows how airlines could help the air-capture industry grow.
CLIMATEWIRE | The recent purchase of carbon offsets by one of the world’s largest airlines is boosting the direct air capture industry hungry for customers that can help pay for their expensive machines that suck carbon dioxide from the atmosphere.
The decision by All Nippon Airways to buy carbon-removal credits to offset emissions reflects the aviation industry’s potential to emerge as a major financial backer of the DAC industry.
It also illustrates that sustainable aviation fuel, which some airlines and environmental leaders say is the best way to reduce emissions, cannot on its own help the industry reach net-zero emissions by 2050.
Sustainable aviation fuel “is not enough to achieve our net-zero goal,” said Tadashi Matsushita, a vice president of ANA, during a panel Thursday hosted by the Japan Transport and Tourism Research Institute, a Washington think tank founded by the Japanese government.
While low-emission fuels are “absolutely the key to decarbonizing the aviation industry,” the industry needs “other solutions” such as offsets from DAC, Matsushita said. ANA carries 46 million passengers per year and operates more than 200 direct flights a week between the U.S. and Japan.
In August, ANA became the first commercial airline to purchase carbon offsets from Texas DAC company 1PointFive, committing to a total of 30,000 tons of credits for an undisclosed sum. ANA’s credits will offset emissions equivalent to those generated by 7,000 to 35,000 passengers flying round trip between New York and Los Angeles, depending on aircraft size.
The plant in Texas will remove up to 500,000 tons of CO2 per year and will become the largest carbon removal facility in the world when it starts operating in 2025, according to 1PointFive.
The company, created by Occidental Petroleum, also is constructing three other carbon removal plants, in Texas and Louisiana, and has plans to build 70 carbon removal facilities by 2035.
The August deal makes the Japanese airline the world’s 12th-largest purchaser of carbon removal credits and the first commercial airline to buy the credits, according to the industry data site CDR.fyi. Last year, French aircraft manufacturer Airbus bought 400,000 tons of credits from 1PointFive, becoming the second-largest buyer of carbon removal credits after Microsoft.
DAC plants use fans, filters, electricity and piping to remove CO2 from the air and store it permanently underground or in products such as bricks and concrete. Climate scientists estimate that carbon totaling up to three times the U.S. annual emissions — 5 to 15 gigatons — must be removed every year from 2050 to meet the most ambitious goals of the Paris climate accord and to limit warming to 1.5 degrees Celsius above preindustrial levels.
DAC facilities currently have more than enough companies willing to buy their expensive offsets and to show they are serious about achieving net-zero emissions, said Wil Burns, a professor of environmental policy at Northwestern University.
The price of offsets ranges from $600 to $1,000 per ton of CO2 removed, which makes the technology too expensive for many companies.
But the industry will soon have trouble convincing more companies to buy their credits if it cannot cut the cost to less than $100 per ton, Burns said. And that cost reduction cannot happen without a sizable investment in new facilities and technology, Burns said.
ANA’s purchase of carbon credits is “a perfect example,” Burns said. The airline, by signing a three-year contract before the plant is operational, is helping 1PointFive build the facility, Burns said.
'We have to remove our carbon footprint'
The aviation industry has bet on sustainable aviation fuel, or SAF, to reduce emissions from flying. Low-emission fuel can be made from cooking oil, decaying waste or crops such as tallgrass grown specifically for fuel production. The Biden administration is providing tax credits to fuel producers that can prove that their SAF could reduce emissions by at least 50 percent compared to petroleum-based fuel.
But the current limitation in technology makes it difficult to eliminate aviation emissions by changing the fuel source. Airplanes powered by sustainable jet fuel still release greenhouse gases because they burn fuel that contains carbon such as ethanol. Hydrogen fuel cells and electric batteries are still too heavy for airplanes, while carbon-based liquid fuels currently in use hold more energy per pound than any other source.
A January study published in Nature found that the aviation industry must remove as much as 3.4 gigatons of CO2 to reach net-zero emissions by 2050 if air travel does not decrease. That is more than two-thirds of carbon the U.S. emitted in 2021.
The International Air Transport Association, an aviation industry trade group, also estimates that “offsets and carbon capture” will be responsible for nearly 20 percent of the industry's efforts to reduce emissions. Sustainable aviation fuel will take up a significant share — 65 percent — but not enough for air passengers to enjoy carbon-free travel by 2050.
“We have to remove our carbon footprint where possible through technologies like direct air capture,” Tom Michels, the director of government affairs at United Airlines, said during the Thursday event.
Some airlines including United, Air Canada and Alaska Airlines are committing to DAC, but for a different reason than ANA. They think captured carbon could be turned into jet fuel, dramatically reducing air travel emissions by powering the planes with carbon they emit.
“Yes, we will remove carbon, but it will be feedstock,” Rohini Sengupta, the director of environmental sustainability at United, said in an interview. “It will go into the [fuel]. We will burn it when we operate the aircraft, and then we will remove the carbon again.”
In 2020, United invested millions in the DAC plant in Texas from which ANA is buying carbon credits.
Reporter Corbin Hiar contributed.
