Flight carbon reduction target
0Carbon emission growth
Stabilize aviation CO2 emissions (carbon – neutral growth) with CORSIA from 2020.
1.5%Fuel efficiency
Increase average fuel efficiency by 1.5% every year by 2030.
Net 0Carbon emissions
E
Sustainable Environment
S
Prosperous Society
G
Corporate Governance
Concern for Climate Change
In response to the international carbon reduction trend, China Airlines formulates and manages corporate aviation and ground carbon reduction goals (as shown in the table below) on a rolling basis, so as to contribute to the sustainability of the global environment. Moreover, CAL responds to international climate-related financial management trends and publicly signed as a supporter of Task Force on Climate-Related Financial Disclosures (TCFD) in 2018, and actively carried out operation mechanism establishment and strengthening management. We adopted warming scenarios of IPCC scientific report and the Science-Based Target (SBT) methodological connotation to analyze the enterprise entity and transformation risks and opportunities, and continue to strengthen the decision-making module. Also, internal and external engagement platforms are used to review CAL’s targets and pathways for carbon reduction as well as related results. For example, CAL involves itself in the IATA SEAC engagement of improving the carbon reduction targets for the international aviation industry.
Following the aforementioned TCFD operational objectives and framework, CAL has consolidated climate risks, opportunity issues and response strategies, and completed "CAL Climate-Related Financial Disclosure Report" and submitted it to the board of directors. After the approval of the Chairman, the key and appropriate information has been disclosed for the public.
Climate Risk Management Measures
| Response item | Objectives | Specific Actions in 2022 | |
|---|---|---|---|
| Governance | Strengthen climate governance | Continue to submit climate governance reports to the Board of Directors | Reported climate governance reports to the Risk Committee of the Board of Directors |
| Enhance management supervision and crossdepartmental operations | Meet corporate governance and green finance requirements |
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| Strategy | Enhance TCFD capabilities | Increase the comprehensiveness and depth of quantified financial information |
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| Climate response strategies and management | Increase resilience for responding to climate change risks |
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| Participate in important engagements | Increase the understanding of international climate change issues and regulatory requirements |
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| Risk Management | Strengthen the risk management mechanisms for the corporate value chain | Increase resilience for responding to climate change risks |
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| Strengthen the existing enterprise risk management mechanism | Implement risk management and strengthen emergency response mechanisms | Incorporate climate factors into the existing enterprise risk management mechanism to strengthen climate risk / opportunity detection, response, and control capabilities in all units | |
| Respond to international carbon transformation risks | Meet ICAO, EU, and other international regulations for carbon reduction |
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| Implement carbon reduction and energy transformation | Net zero emissions in operating activities by 2050 |
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| Metrics and Targets | Continuously optimize GHG inventory | Expand the scope of the inventory to increase the quality of the data | Conducted an inventory of greenhouse gas emissions ISO 14064:2018 categories 1-6 greenhouse gas emissions inventory inside and outside the organization every year to increase the quality of the data on greenhouse gas emissions |
| Implement carbon emission reduction targets and KPIs | Attain short, medium, and longterm GHG reduction targets and net zero emission target for 2050 and pass SBTi certification |
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| Attain flight carbon reduction objectives | Attain short, medium, and longterm GHG reduction targets and net zero emission target for 2050 |
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| Increase fuel efficiency | Increase the efficiency of company operations and fuel consumption |
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IATA Three Goals
International Air Transport Association (IATA) established three targets and four-pillar strategy for the global aviation industry.
2009 - 2020
1.5% average annual improvement in fuel efficiency
2020
Carbon neutral growth since 2020
2050
Net Zero Carbon Emissions by 2050
IATA's Four-pillar Strategy
Technology
Making great advances in technology
Reducing weight of aircraft, using new composite
lightweight materials, renovating fleets, developing new aircraft, engines and alternative
sources of energy.
Operation
Proper and effective operations
Improving flight operation procedures; making progress and
optimizing fuel-saving management; optimizing route planning and management, etc.
Infrastructure
Improving infrastructure efficiency
Improving efficiency of air traffic management;
improving airspace structure and management efficacy; improving the infrastructure at the
airport.
Economic Measures
Adopt effective economic instruments
Taking a sectoral approach on the principle of cost
efficiency, which covers various effective economic instruments, such as offsets and
emission trading etc.
CAL GHG Reduction Target
Ground operation GHG reduction target
44%Carbon reduction
Reduce carbon emissions by 44% in 2025 compared to the base year (2009).
50%Carbon reduction
Reduce carbon emissions by 50% in 2030 compared to the base year (2009).
10%RE installations
Renewable Energy installations up to 10% of electricity consumption by 2030
Net 0Carbon emissions
Net Zero carbon emissions by 2050
Use Sustainable Aviation Fuel (SAF)
2025 2%
2030 5%
2040 40%
2050 65%
Carbon Risk Sources
International Civil Aviation Organization (ICAO)
- Required membership countries to sign the Greenhouse Gas Reduction Agreement.
- Through research on the Global Market-based Measure (GMBM), the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is implemented in 2020.
- All countries are encouraged to promote the development of biofuel for aviation purposes, and incorporate the carbon-reduction efficiency of sustainable fuel into GMBM (CORSIA) .
- Aircraft CO2 emission standards have been passed.
- The Clean Development Mechanism (CDM) and the aviation industry carbon-reduction project methodology have been proposed.
International Air Transport Association (IATA)
- Promoting voluntary carbon reduction of aviation industry.
- Develop an environmental management technology document for the aviation industry.
- Participate in the development of ICAO CORSIA technology regulations and promote industrial training operations.
European Union (EU)
- Civil aircraft that take off and land at airports in EU countries have all become part of the EU Carbon Emission Trading scheme.
- Propose Green Deal and set 2050 net zero target.
- Promote mandatory use of SAF and carbon tax.
- Some countries regulate enterprises to disclose emissions information and promote carbon tax.
Republic of China (Taiwan)
- In response to the Tawain Financial Supervisory Commission's requirement, listed companies are required to complete greenhouse gas inventory, reporting and verification.
Others
- Some countries have announced net zero emissions targets.
- Certain countries are planning to implement carbon tax or emission trading.
Market operational risks
- Business operation and aviation safety risks caused by extreme climate.
- Competitive risks caused by the trend of low-carbon transportation.
- Customers' net zero emissions targets and the need of low-carbon by supply chain management.
- The improvement of low-carbon consumer awareness.
- Increased cost for the supply chain management.
- The change in customer behavior has caused by depletion of water resources and spread of diseases.
Risk and Opportunity Assessment and Response
Risk Identification and Opportunities
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International regulations pertaining to environmental protection and carbon management (ICAO CORSIA, EU ETS, UK ETS etc.)
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Energy transformation
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Corporate reputation and low-carbon image
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Other indirect social / economic impacts
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Risks of flight safety derived from increased frequency of extreme weather (such as typhoon, heavy rainfall, and snowstorm)
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Effect of the rise in average temperature and uneven rainfall intensity on the headquarters and branches
Type of Risk
Transformation risk
Duration of Impact (Level of Impact)
Short-term and medium-term (Medium)
Aspect of Impact
Business development / Passenger service / Cargo service / Flight safety / Supply chain
Risk and Financial Impact
- Carbon management measures have increased, leading to an increase in compliance costs
- Governments have levied taxes for environmental protection and energy, leading to an increase in operating costs
- Authorities in charge of environmental protection have regulated the declaration and control of carbon emissions for the transportation sector (including air transport), leading to an increase in administrative costs
- Countries have implemented stricter punishments for environmental violations, leading to an increase in financial risks
Opportunity and Financial Benefits
- Improve fuel efficiency and reduce costs of energy purchase, offsets, and compliance
- Gain extra earnings derived from the sale of carbon rights
- Implement ICT and digitization to improve work efficiency and reduce administrative costs
Management Method
- Enhance employee training to strengthen the ability to identify risks and opportunities
- Communicate with the public sectors and international organizations
- Establish a carbon emission monitoring and management system
- Renew fleets and equipment
- Plan and implement measures for carbon reduction
- Follow trends of fluctuations in the carbon market and manage carbon rights
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Business operations and environmental meetings review the countermeasures of Corporate Development Office, Corporate Safety Office, Finance Division, and business units
Type of Risk
Transformation risk
Duration of Impact (Level of Impact)
Medium-term and long-term (High)
Aspect of Impact
Business development / Passenger service / Cargo service / Flight safety / Supply chain
Risk and Financial Impact
- Oil prices have increased, leading to an increase in oil costs
- Long-term oil supply may be insufficient, leading to flight abnormalities
- Promote sustainable alternative jet fuels: ICAO proposed 2% SAF targets and EU Green Deal on mandatory use of SAF
- Incorporate carbon tax and carbon offsetting requirements to attain net zero emissions
- Introduction of mandatory renewable energy usage
- Collection of energy expenses and fossil fuel fees
Opportunity and Financial Benefits
- Increasing energy efficiency and reducing energy expenditure
- Introducing new fleets and facilities to enhance brand competitiveness and revenue
- Using alternative fuels to enhance brand efficiency and revenue
- Increasing the load factor and incorporating it into company’s operating strategy will help create opportunities for company’s revenue
- Using aircrafts with better fuel-efficiency to effectively reduce operating costs
- Using sustainable aviation fuel to meet ICAO carbon reduction requirements and respond to carbon reduction policies of certain countries
- Investing in renewable energy to generate opportunities of carbon assets
- Promoting the ECO Travel Carbon Offsetting Program to striving for customer base with low-carbon consumption propensity
- The customer suggestion system (CSS) provides CAL with opportunities for continuous improvement on issues such as sustainability, environment and climate change
Management Method
- Ensure stable supply of oil
- Continue to evaluate the introduction of new technologies (new energy-saving flights and fuel-saving technologies)
- Improve depreciation planning and financial management
- Promote the domestic development of sustainable aviation fuels
- Participate in the carbon offsetting and reduction programs of the international aviation industry
- Continue to enhance MRV mechanisms for EU ETS and CORSIA
- Study and perform carbon rights / credits transaction
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Business operations and environmental meetings review the countermeasures of the Corporate Development Office, Corporate Safety Office, and the Finance Division
Type of Risk
Transformation risk
Duration of Impact (Level of Impact)
Short-term and medium-term (Low)
Aspect of Impact
Business development / Passenger service / Cargo service
Risk and Financial Impact
- Consumers value environmental protection and carbon reduction, causing an impact on the brand trust and revenue
- The increasing awareness of carbon reduction has changed the demand for air transport
Opportunity and Financial Benefits
- Facilitate communication with stakeholders about CAL's concept and practice of environmental protection to pursue recognition and support and improve corporate reputation and brand value
- Support and conform to the government's environmental policies and enhance industrial cooperation to improve corporate competitiveness
Management Method
- Continue to strengthen communication with stakeholders and participate in scientific research and international evaluation of environmental sustainability to improve the corporate image of environmental sustainability
- Strengthen employee training on environmental protection and energy conservation and organize related activities to improve employees' awareness of environmental protection
- Enhance cooperation with low-carbon product suppliers at home and abroad to improve the supply chain sustainability
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Business operations and Corporate Sustainability Committee meetings review related departments
Type of Risk
Transformation risk
Duration of Impact (Level of Impact)
Medium-term and long-term (Medium)
Aspect of Impact
Business development / Passenger service / Cargo service / Supply chain
Risk and Financial Impact
- The increase in public health risks such as vector mosquitoes and infectious diseases, and the decrease in the attractiveness of land eco-tourism (due to changes in the ecosystem), will then reduce tourism motivation and freight demand
- The awareness of carbon reduction has increased, leading to a decrease in air transport
- Climate change has an impact on social economy and tourism, leading to a decrease in air transport
Opportunity and Financial Benefits
- The change in customer behavior lead to demand in the low-carbon transportation market
- The integration of passenger and freight transportation and the improvement of dispatching capabilities can enhance operational efficiency and profitability
- The safety image of environmental protection and public health helps to win the recognition of the consumer market and enhance the competitiveness of enterprises
Management Method
- Cooperate with national epidemic prevention policies to strengthen on-board disinfection, personnel protection and passenger advocacy measures to ensure the safety of humans and avoid the continuous spread of immunization and reduce the impact.
- Launch an online booking system to increase convenience and reduce carbon emissions
- Improve fleets and aircraft equipment and introduce the Eco Travel Carbon Offsetting program to promote green / low-carbon opportunities
- Develop a variety of new products / services (such as direct/ non-stop flights) to improve performance and meet market needs
- Understand low-carbon economy and transport issues and market models to create opportunities and competitiveness
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Business operations, Corporate Sustainability and safety/risk Committee meetings review related departments, analyze material issues, and keep abreast of market trends and changes in the business environment
Type of Risk
Physical risk
Duration of Impact (Level of Impact)
Short-term and medium-term (Medium)
Aspect of Impact
Business development / Passenger service / Cargo service / Flight safety / Supply chain
Risk and Financial Impact
- Abnormal climate, such as floods, strong winds, rain, and fog, causes changes or cancellation of flights, blockage of ground access, and obstacles to freight transport, leading to an increase in operating costs (transfer and passenger arrangements)
- Extreme climate affects the supply of raw materials and market prosperity, leading to a decrease in passenger load and revenue
Opportunity and Financial Benefits
- Enhance the risk forecast and capability of emergency responses to meet the customers’ demand and assist in schedule management, improve the quality of service and reputation
- Handle customers' needs properly in case of changes of flights the results benefit royalty and customer retention
- The integration of passenger and freight transportation and the improvement of dispatching capabilities can enhance operational efficiency and profitability
Management Method
- Expand and strengthen operating procedures and contingency plans and enhance operator training to improve coordination and operating efficiency across the organization
- Introduce weather professionals to increase the accuracy of weather forecasts and advance flight scheduling
- Improve coordination and partnership in the supply chain management to ensure safe freight and passenger transport
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Senior Vice President supervises, and System Operation Control Division convenes the operations response meetings of related departments for overall management and deployment
Type of Risk
Physical risk
Duration of Impact (Level of Impact)
Long-term (Low)
Aspect of Impact
Business development / Passenger service / Cargo service / Flight safety / Supply chain
Risk and Financial Impact
- The rise in average temperature causes energy consumption and costs to increase
- Due to the change in rainfall pattern, droughts happen frequently and last longer, affecting water supply, quality of service, health and safety, and food safety and leading to increased costs
Opportunity and Financial Benefits
- Change operating procedures and behaviors to reduce costs
- Plan renewable energy to reduce the dependence on fossil fuels and increase costs due electricity shortage
- Develop or introduce water-saving measures in manufacturing processes, such as reducing water consumption and its cost
- The marketization of cleaning technology increases revenue
- Improve service procedures and tools and develop new ecological attractions to increase revenue and competitiveness
Management Method
- Set annual goals of carbon reduction and take energy-saving measures to reduce unnecessary waste of resources and energy
- Plan renewable energy facilities and apply for renewable energy certificates
- Improve measures for water saving, water storage, and rainfall harvest
- Introduce the cleaning plan and obtain the agent right of regional markets
- Strengthen the management and quality of drinking water
- Improve service procedures and innovate the business model
Authority / Review
- The President makes decisions to ensure the corporate sustainable development
- Business operations and environmental meetings review related departments
Carbon Management Strategies
Management
Dedicated organization
- Increase the operation capabilities of the corporate environmental committee
- Implement the carbon management task force and the aircraft fuel task force
Management systems
- Make enhancements on the environmental management system ISO 14001 and the energy management system ISO 50001 while implementing two-stage internal audits and promoting third-party certifications
- Set and work toward goals concerning voluntary greenhouse gas reduction
- Implement strategies for greenhouse gas management for all group branches and supply chains
Execution
Conserve fuel in aviation / ground operations
- Continue to strengthen fuel efficiency measures and formulate four major fuel-saving strategies, namely, promoting green flights, improving ground service control, enhancing regular repair and maintenance, and strengthening weight reduction of fuselages
- Continue to explore new flight paths that can be beneficial for conserving fuel and reducing carbon emissions
- Map out and implement monitoring measures and carbon-reduction projects, carbon rights trading, and carbon asset management operations
Calculation of greenhouse gases / carbon footprint
- Calculate carbon emissions footprint on international flight
- Improve the implementation performance of ISO 14064-1 GHG inventory
- Finish setting up the Aviation Passenger Transportation Services: Carbon Footprint Product Category Rule (PCR) and carbon footprint label
- Implement MRV for ICAO CORSIA, EU ETS
- Plan and implement carbon offsetting program
Eco-friendly aircraft
- Energy conservation and environmental protection will be considered when establishing new fleets
Emergency exercise
- Improve work processes for preventing and reacting to extraordinary weather phenomena such as typhoons and heavy rain
Disclosure
- Publish annual corporate sustainability reports, update the Corporate Sustainability website, and participate in the material assessments, e.g., DJSI and CDP
Actions
- Participate in the external environmental-related advocacy and organizations at home and aboard. For more information, please refer to Environmental Initiatives
Increase the Breadth and Depth of Carbon Inventory Management Operations
Since 2009, China Airlines has conducted inventory counts for international aviation fuel and domestic ground operations greenhouse gas emission volumes according to instructions of ISO / CNS 14064-1 and The Greenhouse Gases Protocol on an annual basis to monitor the overall greenhouse gas emission conditions. On the other hand, China Airlines is also gradually extending the carbon management operations to group and supply chain corporations.
2014
CAL started the Carbon Management Center–Satellite System Development Operations, covering the investigation of carbon emission data of 11 group corporations and key supplier operations in the first phase.
2015~
CAL continued to carry out 3 events of supplier greenhouse gas inventories, inspections, and reduction operations training programs, performed in-depth greenhouse gas counseling for key suppliers.
2016~
Organized annual greenhouse gas inventory training courses, to effectively control greenhouse gas emissions information of CAL group and the supply chain, thereby accumulating the supply chains' carbon management capacity.
2017~
CAL continued to collect annual greenhouse gas inventory operations of group companies and key suppliers, invite them to participate in various education and training courses, and actively implement the logics of ISO 14001:2015 taking "life cycle perspective" into consideration.
2018~
CAL started value chain environmental management operations, invite group partners to set up environmental protection seeds, and promote group partners to understand the meaning and benefits of environment/energy/carbon management.
2019~
CAL gradually cultivated the energy and environmental management of 11 group companies, through environmental investigation and communication meetings.
2020~
CAL asked value chain partners to formulate environmental and energy policies and to implement management measures with monitoring performance on critical environmental risks.
2021~
CAL continues to require value chain partners to set corporate environmental policies and management goals, deepen internal and external communication, and encourage the setting up of environmental sustainability pages to disclose the company's environmental policies, annual targets and performance.
2022~
CAL continues to strengthen and advance the GHG Measurement, Reporting, and Verification, known as MRV for the CAL group/value chain.