Aviation Sustainability and the Environment, CAPA 08-Sep-2022

IAG Cargo commenced (06-Sep-2022) trialling the first electric terminal tractor, known as a Terberg YT203EV, at London Heathrow Airport.

This is the first electric Terberg operating airside worldwide.

IAG Cargo is trialling the electric Terberg YT203EV for 12 months, with the ambition to transition its current diesel fleet to more sustainable alternatives, including electric.

In the coming years the trial will help IAG Cargo and its partners understand the challenges the business may face when adopting an electric airside fleet, how future electric vehicles could be charged and what additional infrastructure will be needed to support a fleet of electric terminal tractors. [more - original PR]

Original report: IAG Cargo trials first electric terminal tractor at London Heathrow airport

• The electric terminal tractor known as a Terberg YT203EV, carries unit loading devices (ULDs) that tows goods for air transportation
• IAG Cargo is trialling this innovative electric Terberg YT203EV for 12 months with the ambition to replace all current terminal tractors in the near future
• This is the first electric Terberg YT203EV operating airside worldwide

IAG Cargo, the cargo division of International Airlines Group (IAG) has begun to trial the first electric terminal tractor, known as a Terberg YT203EV, at London Heathrow airport. This is the first electric Terberg operating airside worldwide.

By replacing an existing terminal tractor with an electric Terberg, approximately 30 tonnes of CO2 will be saved per vehicle per year - this is the equivalent of planting over 1 million trees or taking more than 6,000 cars off the road.1

Terberg has been creating electric vehicles since 2014 with the team constantly revising the designs. The latest vehicles can deliver the same capability as the current diesel units in a more environmentally sustainable way, allowing drivers to carry out their work pattern whilst avoiding diesel engine emissions. In addition to its electric solution, Terberg are also exploring the development of hydrogen fuel cell vehicles, having placed a unit in to test on an off-airfield application. This additional environmentally friendly solution will afford Terberg customers such as IAG Cargo further options to achieve their environmental goals.

IAG Cargo is trialling the electric Terberg YT203EV for 12 months, with the ambition to transition its current diesel fleet to more sustainable alternatives, including electric. In the coming years the trial will help IAG Cargo and its partners understand the challenges the business may face when adopting an electric airside fleet, how future electric vehicles could be charged and what additional infrastructure will be needed to support a fleet of electric terminal tractors.

David Rose, Chief Transformation Officer at IAG Cargo commented: "We're delighted to be partnering with Terberg to trial the first electric Terberg at London Heathrow - this is an exciting advancement for IAG Cargo as we strive to lead on sustainability and be fit for future.

"We are continuously looking at ways that reduce our impact on the environment whilst improving our customer offering. This trial is part of a wider effort supporting our commitment to making IAG Cargo, and the wider industry, more sustainable. "

Alisdair Couper, Manager Director at Terberg added: "This is another step towards reducing air cargo's impact on the environment and so we're thrilled to work with IAG Cargo to see the first electric Terberg already in action at London Heathrow airport."

A landmark finance deal puts North Queensland Airports - the owner of Cairns and Mackay Airports - at the forefront of a global wave of sustainable finance aimed at "nature positive" outcomes.

"North Queensland Airport's sustainability linked loan is one of the very first such loans in the Australian market to address biodiversity and natural capital," says Eliza Mathews, head of sustainable finance at Westpac which acted as joint sustainability coordinator for the transaction.

The loan includes key performance indicators which incentivise the airport operator to enhance the habitat surrounding Cairns Airport and help save threatened wildlife, in partnership with the local Yirrganydji people.

If the loan KPIs are hit - along with others tailored to emissions reductions and Indigenous engagement - North Queensland Airports will be rewarded with a lower interest rate. Conversely, a higher rate will apply if they're missed.

North Queensland Airports chief executive, Richard Barker, says wrapping biodiversity targets into a financing structure makes good business sense and provides additional motivation for his organisation to deliver on its environmental promises.

"Cairns Airport plays an important role as a gateway to Queensland's world heritage areas - the tropical rainforests and the Great Barrier Reef - and also remote parts of the far north of the state," Barker says.

"We have a role to play in protecting the pristine environment in which we operate. We can't just rely on the government to do these types of projects.

"By actually linking our environmental targets into our refinancing, it really commits us as an organisation to deliver on what we say, not only around reducing our emissions, but to actively encourage the regeneration of biodiversity in this area."

Restoration of a boardwalk through mangroves near Cairns Airport will help efforts to rejuvenate biodiversity in the area. (Emma Foster)

Mathews expects the airport's pioneering financing move to be swiftly followed by similar transactions in Australia, as more corporate borrowers and lenders around the world look to lift efforts to improve the state of nature, in the same vein as the past decade's global push to get greenhouse gas emissions down to net-zero.

"Generally speaking, the focus on natural capital is about 10 years behind climate, but it's not going to take 10 years to catch up," she says.

The impetus is coming on many fronts, driven by regulatory, stakeholder and market pressures, as warnings grow louder about the steep economic impact ahead if nature's current decline is not halted.

Degradation of the world's natural ecosystems is estimated to represent an annual loss of at least US$479 billion per year according to the UN Environment Programme Finance Initiative. Meanwhile, the World Economic Forum says US$44 trillion of economic value generation - over half the world's total GDP - is potentially at risk due to the dependence of business on nature and its services, at a time of unprecedented decline, with nearly 1 million species facing extinction.

It's a threat well known in Australia. The annual State of the Environment report released in July by the federal government showed the past five years have seen an alarming rise in threatened species, land clearing, extreme weather events and destruction of Indigenous heritage.

The growing urgency to address these risks prompted the emergence last year of the Taskforce on Nature-related Financial Disclosures - or TNFD. Just as the Taskforce on Climate-related Financial Disclosures - or TCFD - has risen to prominence as a global framework for lenders to disclose - and, so, address - climate related risks, the TNFD is taking shape as a tool to direct capital to better care for nature, whether that's improving soil quality, the health of oceans or biodiversity. The TNFD released draft reporting guidelines in March, and obligations are slated to kick off in September next year.

"As a result, I expect to see more companies starting to look at natural capital, accounting for it and focusing their own sustainability efforts to improve in that area," says Mathews, noting she's seeing a "step-change" in ambition of target setting among clients.

"And if you think about the purpose of sustainable finance, it's to help support a company to achieve its sustainability goals. So, we expect to see a growing number of financing transactions incorporating KPIs to address natural capital and biodiversity."

The chief executive of Cairns Airport says work towards the loan's biodiversity goal is an extension of projects already underway to rejuvenate the 350-hectare stretch of mangroves within the airport's land holdings, in partnership with the Yirrganydji Land and Sea Rangers - a program run by the local Dawul Wuru Aboriginal Corporation. The mangroves support a wide range of species, some of which are at risk of extinction. The area also forms a natural barrier to erosion and king tides, sequesters carbon efficiently and has immense cultural value to local First Nations people.

"Our ancestors, our Elders, used to roam, hunt and gather, collect, and camp around these areas where the airport runways are now, so this is a very special place for our people," says senior Yirrganydji ranger Brian Singleton.

While local traditional custodians haven't had access to the area for many generations, Singleton says the partnership formed between the rangers and Cairns Airport to rejuvenate the habitat have seen cultural knowledge begin to return.

"The ability to bring our Elders into places like this has been really important for them to start sharing knowledge about how we used to look after country, and one of the first things is to protect the mangroves and work together to start managing some of those protected species," he says.

"Integrating traditional knowledge and science together is really the key to managing the area."

North Queensland Airports environmental manager, Lucy Friend, says part of the airport's environmental strategy has involved leading major restoration works on a community boardwalk through the mangroves. She says the restored boardwalk, which had been closed by council in 2019 due to safety concerns, allows easy access to the mangroves for scientists, community members and traditional custodians, facilitating research into habitat rejuvenation. This includes studies into its role as a "blue carbon" ecosystem, sucking in atmospheric carbon up to 50 times faster than forests that would otherwise contribute to climate change.

"We've used the boardwalk to get out into those really muddy areas and we're looking at how much carbon is stored - in the mud and also in the trees - and looking at the mangroves' contribution to combating climate change," says Friend.

Mathews says these initiatives reflect the strong interlinkages between the three sets of key performance indicators - targeting emissions reductions, biodiversity enhancement and Indigenous engagement - structured into North Queensland Airport's sustainability linked loan, which she sees as ground-breaking.

"It's great to be able to partner with clients like North Queensland Airports to help achieve those goals through sustainable finance."

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