Norwegian annual report 2013

Emissions benchmark methodology

The airline industry is under constant scrutiny from environmentalists. Norwegian is positive to an open and transparent dialogue about transport and the environment, and therefore welcomes a critical examination on how the Group does business.

There are a few recurring counter-arguments relating to how the Group does business, and particularly how Norwegian’s operations are benchmarked towards alternative means of transportation.

Below is a point-by-point account on the underlying rationale on how Norwegian has measured emissions under "Emissions in context"

1) Norwegian benchmarks direct emissions from combustion of fuel
The use of fossil fuels leads to CO2 emissions at several stages, not just directly from burning the fuel, but also, for example, from the production of the fuel.  However, this does not only apply to aviation fuel, but also to the extraction of gas for gas plants and coal for coal plants – to mention a couple of examples.

If CO2 emissions from the production of fuel for aircraft were included, CO2 emissions from the production of fossil fuels for power plants, diesel for diesel-engine trains on the Nordland and Røros lines and petrol for cars should also be included. It can also be assumed that the construction of renewable energy sources such as hydropower plants leads to CO2 emissions. The comparison only uses direct CO2 emissions from combustion for all forms of transport, which makes the figures comparable.

If secondary and tertiary CO2 emissions were included, the benchmark would become so complex and theoretical that the result would appear very approximate and difficult to understand, precisely the opposite of the purpose of the benchmark. Norwegian is not in possession of any information indicating that emissions from aircraft will change significantly in relation to other forms of transport using such an approach.

2) The benchmark deliberately includes marginal emissions from trains but not aircraft
The focus is on marginal emissions from trains but not from aircraft because many participants in the environmental debate appear to hold the view that it would be environmentally beneficial to replace one flight with one train departure, not the other way around. It is therefore relevant to focus on what the effect of an extra train departure would be, and the graphs are a result of a pure mathematical representation in which all figures are represented at the same scale.

Many people also appear to believe that extra train departures would not be necessary in order to replace a flight, as it would be possible to fill current train departures with more passengers, or possibly increase the number of carriages. It should be noted that there are 28 daily flights between Oslo and Bergen, and four train departures (Oslo – Bergen is one of two city pairs included in the benchmark). About 50-60 per cent of air passengers on this route are business travellers. For this group of customers, frequency plays a significant part in their decision as to which form of transport to use, and it is therefore not as simple in a market economy to just assume that cancelled flights will be "absorbed" by existing train departures because the trains are not full or because more carriages can be added.

3) The benchmark uses objective third party sources
All calculations are made based on figures from the Norwegian Water Resources and Energy Directorate (NVE) and Enova, which is an information service from the Ministry of Petroleum and Energy. The figures are further supported by information from Norwegian Standard NS-EN 15603, the Swedish Environmental Protection Agency, Swedenergy, and the International Energy Agency (IEA). In other words, CO2 emissions per kWh is not something Norwegian has made up to its own advantage; it is based on a number of reputable and objective sources.

Some participants in the environmental debate claim that future power plant projects which will lead to lower marginal emissions should be used as the benchmark. Under such rationale it should be pointed out that the airline industry has come very far in the testing of various forms of biofuel, and that Norwegian has ordered 222 new aircraft with 10-15 per cent lower fuel consumption than the most modern aircraft we have today. These future advantages in air travel are not included in the comparison; future potential advantages for other forms of transport are therefore not included either.

4) Emissions are calculated from the point of origin of the form of transport in question
Most airline passengers are aware that Norwegian does not take off from Rådhusplassen in downtown Oslo with arrival at Bryggen in Bergen, though both passengers and the airline would like for this to be something one could offer. In the comparison, direct emissions are shown for each individual form of transport, not from the feeder transport. Travel to both the train station and the airport lead to more emissions. The amount of extra emissions depends on where the journey begins relative to the train station or airport, and, not least, the mode of transport used. Arguably most people understand this.

5) Only emissions that can be demonstrated with certainty are included
Whether emissions at high altitudes actually lead to net cooling or net warming is associated with considerable uncertainty. CICERO, which is often referenced in Norway, has calculated that emissions at high altitudes have twice the environmental effect of emissions at ground level. However, CICERO admits that there is considerable uncertainty associated with this. This is confirmed by NASA, which argues that this conclusion is highly uncertain and that the opposite may even be the case – in other words that there is a cooling effect. Read more about high altitude emissions under Effect of high altitude emissions

To the extent that emissions at high altitudes have a net warming effect, a passenger flight between Oslo and Bergen (used as a specific benchmark case) will barely reach the altitudes in question before starting its descent. Contrails, which are the main reason for NASA and CICERO's arguments, are normally formed at high altitudes above 30,000 feet, and only under certain atmospheric conditions related to temperature and humidity. The normal maximum altitude from Oslo to Bergen is 28,000 to 32,000 feet. The aircraft is normally at this altitude for up to five minutes. This is so brief that it is unlikely to be a significant factor in a comparison for the Oslo – Bergen route.

If an extra emission factor is added to flying due to emissions at high altitudes, the positive effects of the high altitudes should also be added to flying – in other words, the fact that aircraft do not depend on ground infrastructure such as roads and rails. To operate on the Oslo – Bergen route, aircraft require about two kilometres of runway at each end, while the train requires nearly 500 kilometres of rails, including tunnels, bridges and other infrastructure that represent large interventions in the terrain and large CO2 emissions both when being built and for maintenance. Norwegian and SAS can, for example, fly for 42 years between Oslo and Bergen with the current emissions profile before the emissions equal the construction of a new railway between the two cities. This is based on a report produced by Econ on behalf of the Ministry of Transport and Communications. Read more about rail line construction under High speed trains - anything but carbon neutral

Arguably CO2 emissions related to building and disposing of the different forms of vehicles should be considered, if one were to conduct a complete and honest analysis. A Norwegian aircraft can make nine round-trips between Oslo and Bergen during a normal day. In the same period, a train can do about one round-trip. This means that the CO2 emissions related to building the mode of transport is about 800 per cent higher for a train passenger, assuming that it "costs" as much CO2 to build a train seat as it does to build an aircraft seat. However, it does not. NSB's 73 B train sets, which for instance are frequently used on the Bergen line, weigh 226.5 tonnes and carry at most 243 passengers. A Norwegian Boeing 737-800 HGW has an empty weight of 41.7 tonnes and carries at most 186 passengers. This means that there is 932 kilo material per train seat, but just 224 kilo material per aircraft seat.

From a life-cycle perspective, emissions from trains are about 3,642 per cent higher per seat-kilometre if the same lifespan is assumed. Additionally, aircraft have traditionally achieved higher occupancy than trains, which contributes to an even greater difference in favour of aircraft.

The arguments around altitude, emissions from infrastructure and the building of the means of transport are confirmed in a research report prepared by the University of California. A summary of this report is available under Environmental Life-cycle assessment and infrastructure found here

Based on the above, it is self-evident that it is misleading to include a possible controversial single effect from emissions from flights at high altitudes without incorporating a wide spectrum of other effects both for flights and other forms of transport. Such an extensive analysis is interesting, but very comprehensive and more appropriate in a research report prepared by scientists than in an annual report.

6) Norwegian only use actual measured emissions – not estimations
The listed emissions are an average of actual flights in all weather conditions. Fuel consumption is actual consumption, including taxiing, APU use and any suboptimal routing from air traffic control, including holding patterns. Further, the figures also include non-commercial flights such as training flights, technical flights and delivery flights from Boeing in the USA. Direct emissions per average commercial passenger kilometre are thus lower than what the figures in this report suggest.

7) Occupancy rates for cars are based on external third party sources
The average occupancy rate for cars in Norway is according to the Institute of Transport Economics 1.54 passengers per trip. On average it is higher for longer distances and lower for shorter distances.

According to the travel behaviour survey, 76 per cent of all long-distance private errands take place by car and only eight per cent by plane, while the distribution is 40 per cent and 36 per cent respectively for long-distance work travel, and 52 per cent and 32 per cent for long-distance business travel. These figures suggest that the share of business travellers is higher for air travel than for car travel on comparable distances. This is confirmed by Avinor's travel behaviour survey, which shows that 52 per cent of all domestic air travel is for business purposes. This means that if a flight passenger was to convert to becoming a car passenger, a higher occupancy rate than the average 1.54 is likely not representative, as the higher car occupancy average for longer distances it is based on a large share of holiday and leisure travel. According to the Institute of Transport Economics, the average for work trips by car is only 1.14 persons.

In the benchmark an average emission for cars of 165 grams of CO2 per kilometre has been used. This figure is given by the Opplysningsrådet for veitrafikken ("Information office for road traffic") and only comprises cars sold between 2002 and 2010. In other words, cars sold before 2002 are not included. The average emission of 165 grams that Norwegian uses is therefore artificiality low, which compensates for a possible low occupancy level.

8) Choice of aircraft type in the benchmark
With regard to type of aircraft, Norwegian lists the average emissions for the entire operation which includes all carbon emission from both 737-300 and 737-800, the only two aircraft types in Norwegian’s operations.

In two specific examples, Oslo-Bergen and Oslo-Bodø, only the most representative type of aircraft has been used. Today, Norwegian’s fleet consists of 10 Boeing 737-300 and 58 Boeing 737-800. The plan is to completely phase out 737-300. In the current operations, many of the 10 737-300 aircraft are used as spares, which means that they are on ground stand-by. Additionally, the usage per day per aircraft is higher for 737-800.

This means that more than 90 per cent of Norwegian's production takes place with 737-800. Furthermore, Norwegian has another 64 Boeing 737-800 on order, as well as 100 Boeing 737 MAX8 and 100 Airbus A320neo. The two latter types of aircraft lower CO2 emissions by another 10-15 per cent compared to the Boeing 737-800.

Based on the above, Norwegian believes that the 737-800 is the most representative aircraft in the two specific examples. It is specified both in the accompanying text and in the graphs that the two specific examples only include the 737-800.