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A Net Zero Roadmap For Travel & Tourism

by AlbBnb

The urgency of climate change is more evident than ever, as emphasised by the 2021 Intergovernmental Panel on Climate Change (IPCC) report. Travel & Tourism is strongly affected by its impacts, but as many other sectors, is also an important emitter of greenhouse gas (GHG) emissions, thereby actively contributing to climate change. It is therefore of utmost importance to decarbonise the sector as quickly as possible and reach net zero by 2050.

A report from World Travel & Tourism Council (WTTC) in collaboration with Accenture that aims to offer a better understanding of the status quo of climate action of Travel & Tourism businesses within selected industries, as well as current challenges, opportunities and needs. 

It also provides a decarbonisation corridor framework demonstrating what net zero journeys could look like for different types of businesses and gives guidance and recommendations on potential climate action. 

“Climate action needs a dramatic step-up if we are to have a shot at limiting global temperature rise to 1.5 C. The travel and tourism sector has a big stake in decarbonization because a destroyed planet serves no one’s purpose. The sector has less than 10 years to accelerate the transition to low-carbon and circular business solutions; to create new opportunities in energy generation and halve transport emissions by 2030; and to integrate nature-based solutions into their operations.”
Inger Andersen, Executive Director, UNE
“Climate change represents one of the greatest global challenges of our time. Across the world, governments and companies are pledging to reach net zero emissions by 2050. While this development will strengthen our collective ambition, we are at a decisive moment that requires that such commitments are backed by concrete plans and immediate action, driving a systemic change to tackle the climate crisis. The Net Zero Roadmap for Travel and Tourism is exactly that and we look forward to collaboration with the industry to put it in action.”
Patricia Espinosa, Secretary-General, UNFCC


Travel & Tourism Industries In Focus

While there is more data and reporting insights available on carbon emissions for aviation, accommodation, and cruise, there is a lack of valid estimates for tour operators, OTAs, TAs and the other types of intermediaries at an aggregated level. Hence, for the purpose of this report, the industry breakdowns estimated by Lenzen (2018) were used as the basis for the assessment of pre-pandemic carbon emissions for Travel & Tourism industries as well as some of the most significant contributing industries in the Travel & Tourism value chain (see Exhibit 3 and 4)

Note: The above emission share has been updated for aviation by using the latest IATA’s Aviation and Climate Change Fact Sheet pre-pandemic estimates. Cruise was separated from water transport by conducting a bottom-up estimation based on sustainability reports. The chart includes shares of most contributing scope 3 emission sources (e.g. agriculture).

The 6% contribution of accommodation to the total Travel & Tourism emissions of 5.4b tCO2e translates to 324 million tonnes of CO2e. Other industries in the accommodation value chain such as food & beverages are explicitly separated suggesting that the previous 2008 accommodation estimate of around 21%23 included Scope 3 emissions. The cruise industry accounts for approximately 0.6% of total Travel & Tourism emissions, representing an estimated 27 million tCO2 on the basis of the consolidation of carbon emissions reported by the top four cruise businesses (approx. 60% of passengers) and an extrapolation of the remaining 40%. The estimate includes Scope 1 & 2 emissions, given that most cruise businesses do not disclose their Scope 3 emissions. Aviation carbon emissions, which represent around 17% of total Travel & Tourism emissions, are documented and reported regularly by industry bodies, such as the International Air Transport Association (IATA), whose pre-pandemic estimates amounted to 915 million tCO2, excluding mainly Scope 324.

For Tour Operators, OTAs and the other intermediaries included in the analysis, valid estimates and reporting information are currently unavailable due to the fragmentation of these industries. An initial intent to estimate carbon emissions specifically for OTAs was undertaken in the context of this report by consolidating the carbon emissions reported by the top three OTAs with the highest market share (approximately 86%) and an extrapolation of the remainder 14%. The result is a carbon footprint lower than 1 million tCO2 emissions, however given that two of three OTAs did not disclose their scope 3 in 2019, the latter estimate includes mainly scope 1 and 2 emissions.


Carbon Intensities

Climate change mitigation is measured in terms of the total amount of CO2 that can be emitted before global temperatures increase beyond the +2 degrees Celsius agreed on in the Paris Agreement. Although global goals, such as the sector’s 2050 net zero goal, refer to the reduction in absolute emissions (emission reduction targets), most of the focus industries track their carbon emission reductions in terms of carbon intensity gains (carbon efficiency targets). In this context, carbon intensity can be defined as the volume of emissions relative to a specific unit of economic activity/metric that reflects the primary operation of a given industry. This allows businesses to set emissions reduction targets while accounting for growth. In some cases, however, the growth of a particular industry might translate into a decrease of its carbon intensity and at the same time an increase in absolute emissions. While the aviation industry usually expresses carbon intensity in grammes of CO2 per revenue passenger kilometre (RPK) or per available seat kilometre (ASK), most cruise companies report their carbon intensity in grammes of CO2 per available lower berth (ALB) kilometre. In accommodation, an initiative is currently under way to develop a Net Zero Hotel Methodology25 with the goal to streamline and align carbon intensity reporting in kilogrammes of CO2 per square meter and includes a suggested metric in CO2 emissions per occupied room per night. Regarding the other industries, some tour operators (asset light), OTAs and TAs report their carbon intensity as tonnes of CO2 per full-time equivalent (FTE) or per revenue generated. However, the latter is not standardised or commonly used yet.

Carbon intensity ranges vary significantly depending on the industry (see exhibit 5). For instance, carbon intensities per passenger basis might seem lower for long and short-haul flights vis-à-vis carbon intensity ranges for cruise passenger kilometres. However, when applying these intensities to specific travel examples the picture looks different. Although shorter flights tend to have lower carbon intensity ranges per passenger km than flights with longer distances due to increased fuel burned in take-off and landing, a long-haul flight in an economy cabin produces similar total emissions to a 6-day cruise, and much higher total emissions than a short-haul flight in an economy cabin. This highlights the importance of differentiated views and the need to closely monitor and consider both intensities and absolute emissions for mittigation pathways.

Note: (1) Carbon intensity for economy cabin seats, (2) Average emissions intensity of the world’s largest cruise operator (low range) and emission intensity of the cruise ship class with the second highest intensity measure (3) Averages of Measure 1 lower and upper quartile from Cornell Hotel Sustainability Benchmarking Index (CHSB) 2021 (4) While cruise is often considered as a transport-only industry, it provides accommodation and transportation services.


Industry Emission Profiles

To better understand the emission profiles of different Travel & Tourism businesses, an analysis was undertaken of the ‘typical’ allocation of emissions along all three emission scopes. Exhibit 7 provides an overview of the results and includes specific examples of emissions in each scope. To estimate the allocations, reported Scope 1, 2, 3 emissions were collected from the top 5 businesses for each industry, averaged, and rounded.
Note: The emission profiles are estimates based on a sample of business emission analysed for this report. Selection metrics varied by industry; for details, please see Exhibit 33). Although the profiles have been discussed and verified with companies directly, considering the wide variety of business models even within each focus industry and differing approaches to calculating Scope 1, 2, 3 emissions, they should only be seen as indicative profiles.
The above exhibit showcases significant heterogeneity in the emission profiles of the respective Travel & Tourism industries. In effect, in accommodation, most of the emissions originate from the value chain and purchased services (Scope 3, 55%), while Scope 2, representing energy consumption, is the second most notable emissions source (37%). For tour operators, depending on the underlying business model, the emission profiles differ significantly. The asset light tour operators’ emissions come almost entirely from Scope 3 (representing 92% of the emissions), while the asset heavy ones are characterised by an inverted emission profile, with 95% of the emissions having their source in Scope 1. Unsurprisingly, the majority of OTAs’ and TAs’ emissions have their source in Scope 2 (55%) and Scope 3 (36%), primarily linked to data centres electricity consumption and related services. As the definition of Scope 3 evolves, it is expected that the allocation of OTAs’ and TAs’ emissions may also change.
In contrast, in aviation, 80% of the emissions derive directly from the operations and are predominantly related to aircraft fuel. The aviation industry appears to be the most mature industry in terms of Scope 3 calculation, taking the key elements from the supply chain into account. Similarly, 99% of the cruise emissions arise from Scope 1 (with ship fuel being its main component). Changes in percentage allocation of the emissions for cruises can be anticipated once a new methodology of Scope 3 calculation emerges.

Overall, results reveal that the distribution of Scope 1, 2, and 3 emissions tends to vary significantly between the focus

industries, indicating that businesses face different levels of complexities when it comes to reducing emissions.

Climate Targets

The Travel & Tourism sector is committing to emission reduction targets, with many players in the sector including their climate and environment goals in their periodic reports, such as financial reports or sustainability reports. To generate a comprehensive overview of the status of climate targets in across the sector, a sample of 250 Travel & Tourism businesses were analysed (50 within each focus industry), see Exhibit 8. These businesses were selected according to their size and market share.
Based on publicly available sustainability reports, 42% of the leading Travel & Tourism businesses have set a climate target (interim, long-term or both), of which 74% use carbon offsetting. Of the businesses with a set climate target, 20% have set emissions reduction targets grounded in climate science through the Science Based Targets initiative (SBTi). The relatively low overall percentage can be explained by the lower percentage of tour operators (14%), OTAs and travel agencies (22%) which have defined a climate target. As these industries are just starting their decarbonisation journey no information was publicly available regarding their commitments.
Targets by Industry

Source: World Travel & Tourism Council (WTTC), November 2021.

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