How government sustainability policy impacts business travel

The Australian Government has introduced the Climate Change Bill 2022, committing to becoming net zero by 2050. While the legislation does not impose obligations directly on companies yet, the bill outlines a new policy that could affect flow-through legislative changes and future business project approvals. From an aviation perspective, Australia is implementing a State Action Plan to manage the country’s aviation carbon emissions. The Action Plan details a strategy for improvements and efficiencies in Australia’s aviation practices covering air traffic management, airlines and airports.

The 2030 Emissions Reduction Plan is an ambitious initiative set forth by the Canadian federal government to address the looming threat of climate change by reducing greenhouse gas (GHG) emissions and promoting sustainable transportation and infrastructure. In 2005, Canada's GHG emissions were estimated to be 747 megatonnes of carbon dioxide equivalent gases, representing about 2% of overall global GHG emissions. The plan aims to cut this number down by at least 40% by 2030 before eventually achieving net-zero emissions by 2050.

One of the key areas that this roadmap focuses on is the promotion of electric vehicles (EV) via the Zero Emission Vehicle Infrastructure Program (ZEVIP), which provides funding towards projects focusing on EV charger deployment in public places, streets, multi-unit residential buildings, workplaces, and for vehicle fleets. But the action steps don’t stop there. The plan also supports the development of other sustainable travel measures included in the Pan-Canadian Framework on Clean Growth and Climate Change, including (but not limited to) a federal carbon pricing benchmark, clean fuel standards, as well as the research and testing of clean technologies for all modes of transport. In other words, business travelers can expect to see more EVs on the road as well as better public transportation options, which will make it easier and more affordable to travel without relying on personal vehicles.

As part of its aim to be carbon neutral by 2060, China’s government is heavily investing in electric cars. Data from the China Association of Automobile Manufacturers clearly shows how the production of New Energy Vehicles (battery, plug-in or fuel cell) is increasing in double-digits versus the decline in building petrol vehicles. With the country also accounting for 90% of the world’s electric buses and trucks and installed more than 800,000 public charging stations, China is way ahead on the road to electrification. China is also a powerhouse of wind and solar energy, leading a boom in the use of renewable energy.

France has been given the green light to ban short-haul domestic flights. The ban initially affects three routes between Paris Orly and Nantes, Lyon and Bordeaux, where travellers will have to use trains instead. More routes could be added in the future, but timetables need to allow for better arrival times. Private jet usage is also under scrutiny in France and could see higher taxes or restrictions to reduce the country’s pollution levels. Additionally, it is now forbidden to advertise products in France as ‘carbon neutral’ without having documentation to prove it, so when a company says it is net zero, it really is.     

Aside from phasing out the use of coal for energy, the German government is focused on restructuring its electric mobility and expanding rail and public transport. VAT has been reduced on long-distance rail travel alongside an increased levy on air tickets, while more car charging points are installed across the country. Clean air has also been a big focus to improve the air quality of cities, through the electrification and digitalising of transport. With a goal to reduce greenhouse gas emissions by 80-95% by 2050, Germany will ramp up its transformation from 2030 with expansion in renewable energy, climate-neutral business, heat pumps and electromobility.

Like other nations, India is focused on waste management and the circular economy i.e. sharing, reusing, refurbishing and recycling materials and products for as long as possible. The PET packaging and recycling industry is one of the largest employers in the country, with bottles often converted into fabric for clothing and uniforms. If purchased and reused by hotels, restaurants, airlines…think of the effect that could have on travel.  

Agricultural and food production, as well as tourism, play a significant role in Ireland’s development plans and processes. Changes made in food production will have a much larger impact on the travel industry in any business or location that sells meals, drinks or snacks. Many hotels not just in Ireland but around the world are increasingly looking at ‘farm to fork’ style dining, or using local suppliers that not only help the environment but support local communities and resources.  

Japan’s Ministry of Economy, Trade, and Industry is supporting efforts to make the aviation industry not only more sustainable, but the skies quieter for residents. It is promoting the development of technology that will support electric and hydrogen aircraft, including batteries, motors and inverters. Support will also be provided to businesses and databases that use new materials to reduce weight and heat from aircraft and engines. The first target is 2030, so not as far away as other initiatives.

Mexico’s Ministry of Tourism established a new strategy called México Renace Sostenible, or Sustainable Mexico Reborn, aimed at designing and implementing programs that work to create harmony between social welfare and the environment. It’s based on part of the 17 Sustainable Development Goals (SDGs) of the United Nations (UN), adopted in 2015, which outline sustainable opportunities to improve the lives of all people around the world by 2030.

Within Mexico’s Sustainable Tourism strategy, which also applies to the corporate travel sector, a strategic partnership exists between the government, tourism service suppliers, travelers, and private companies to ensure tourism is carried out in an eco-friendly and equitable manner. Another initiative within this sector is ADAPTUR, which, in coordination with corporates, proposes to implement climate change mitigation measures to guarantee the conservation of biodiversity, ecosystems, and environmental services in destinations that depends on tourism for economic development.

All eyes have been on Amsterdam Schiphol in the Dutch government’s plans. Authorities wanted to reduce the number of flights from the airport by approximately 20% to reduce emissions and noise pollution, but the plan was found to be against EU rules in a court judgement in April 2023. In a separate announcement, the airport said it wants to stop all night flights and ban private jets by 2025, while abandoning plans for a second runway.

The New Zealand Ministry for the Environment is setting an example for businesses and organizations on how government policies on sustainability can impact travel patterns. By prioritizing sustainable travel options, setting internal emissions budgets, and providing low-emissions bikes, scooters, and e-bikes, the Ministry is promoting a considered approach to travel and promoting eco-friendly modes of transportation. The Ministry's approach can serve as a model for businesses looking to reduce their carbon footprint, save costs, and improve employee well-being through sustainable travel policies. With the pandemic prompting many companies to rethink their travel policies, now is the ideal time for businesses to adopt more sustainable practices and prioritize the well-being of the planet. 

Denmark (1), Finland (3) and Sweden (5) all feature in the top five countries of the Environmental Performance Index (EPI), which analyses environmental performance. Sweden was the first country to pass an environmental protection act in 1967, and around 60% of its national energy supply comes from renewables. While Norway was 20^th in the EPI, others argue Norway is further ahead than its Nordic counterparts due to its commitment to renewable energy. Norway has also set a net zero target of 2030; 20 years sooner than the 2050 target set by the European Union.

Singapore was the first to apply as a sustainable destination based on the Global Sustainable Tourism Council (GSTC)’s Destination Criteria, and was certified in March 2023. Developed to adhere to ISO codes of conduct and the standards of the ISEAL Alliance, the certification serves as basic guidelines for becoming a sustainable tourism destination. With programmes available for businesses to develop their own sustainable strategy, expect to see more initiatives to make tourism greener. Singapore is also now home to the world's largest sustainable aviation fuel plant, opened by Finnish producer Neste in April 2023. 

It’s all about energy in South Africa, with aims to phase out coal power and increase its use of renewable energy as part of new emissions targets announced in 2021. Combined with targets set by the International Maritime Organization, South Africa is set to be a key leader in the decarbonisation of shipping as part of those changes.

Already a leader in renewable energy, Spain is also well positioned to focus on power in its efforts to decarbonise. Electrification, green hydrogen and biofuel are all innovations that Spain could use across multiple sectors including aviation and transport. As a major tourist hub in Europe, Spain’s Ministry of Industry, Commerce and Tourism pledged to plug EUR1.9 billion into tourism destinations to strengthen their environmental, socio-economic and territorial sustainability efforts over 2021-2024.

In January 2012, the UAE set out its efforts to move away from oil and diversify to a more renewable future. Its programmes and policies set out six areas of development including renewable energy, green products and technology, more efficient buildings, promoting organic agriculture, and the use of water and natural resources and waste. In January 2023, UAE companies started to explore the  production of sustainable aviation fuel (SAF), while in the same month the MEA region’s first 100% SAF flight was operated.  

In 2021, the UK’s Carbon Budget incorporated the country’s share of international aviation and shipping emissions. These were deemed “an important part of decarbonisation efforts” as a new target was legally put in place to reduce emissions by 78% by 2035. The Jet Zero strategy was launched in July 2022, setting net zero targets for airports and the domestic aviation industry, as well as the use of sustainable aviation fuel (SAF).

The Environmental Protection Agency's (EPA) new vehicle pollution standards are designed to reduce tailpipe emissions and promote the use and manufacturing of all-electric vehicles. In a bid to accelerate the green revolution, the regulations require that at least 54% of all US automakers' new passenger car sales be electric vehicles by 2030, rising to two-thirds of sales by 2032. Currently, electric vehicles make up only 7% of new passenger car sales in 2023. The proposed standards are set to be the strongest in the world and will cap carbon dioxide, soot, and smog-forming pollution. In conjunction, the White House has hailed these rules as an essential step towards protecting public health, with the goal of achieving carbon emission reductions of nearly 10 billion tonnes by 2055.

As the regulations aim to increase the use of electric vehicles, it is likely that car hire companies and ride-sharing services will need to expand their electric vehicle fleets to comply with the new rules. This may make electric vehicles more affordable and readily available for business travel, especially in urban areas with higher access to charging stations.