Annual and Sustainability Report 2022
Climate action

Climate action

Icelandair is an environmentally-conscious company which recognizes the impact that air travel has on the environment and climate. Almost all of our carbon dioxide (CO2) emissions are generated from aircraft engine combustion. We monitor our GHG emissions closely and are committed to mitigating our carbon footprint. Climate risk, both physical and transition risk, is an important risk factor for the Company but it can also create new opportunities when managed successfully.

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Global transition

The aviation industry has set ambitious decarbonization goals, contributing to global efforts to combat climate change. Aviation is one of the most challenging of all industry sectors to decarbonize. At the same time air travel has the potential to take a leadership to show what can be achieved through accelerating technological innovation and partnerships. Cooperation, international as well as on the national level, is essential and by participating in various projects, with diverse actors, we want to escalate the necessary changes towards sustainable aviation.

Icelandair adheres to the industry goals The International Air Transport Association (IATA) has set to address the global challenge of climate change, aiming to achieve net zero emissions by 2050.

To reach the target a combination of measures is required with the first one being fleet renewal and new technologies, operational improvements, introduction of sustainable aviation fuels (SAF) and the last one is carbon offsetting or carbon capture.

IATA estimate that SAF could contribute around 65% of the reduction in emissions needed by aviation to reach net-zero in 2050. In year 2022 SAF accounts for just 0.15% of aviation fuel consumption globally.

Net zero by 2050

What is SAF?

Sustainable aviation fuel (SAF) is a liquid fuel currently used in commercial aviation which reduces CO2 emissions by up to 80%. It can be produced from a number of sources (feedstock) including waste oil and fats, municipal waste and non-food crops. It can also be produced synthetically via a process that captures carbon directly from the air or from an industrial source. It is regarded sustainable because the raw feedstock does not compete with food crops or water supplies, nor is it responsible for forest degradation. Whereas fossil fuels add to the overall level of CO2 by emitting carbon that had been previously locked away, SAF recycles the CO2 which has been absorbed by the biomass used in the feedstock during the course of its life.

Net zero 2050: sustainable aviation fuels (

Working towards our goals

Icelandair monitors fuel efficiency and CO2 emissions from flight and ground operations against set goals. In addition, the Company has set specific targets for reducing emissions by 2030.

  • 50% reduction of CO2 emissions per OTK from flight operations by 2030 compared to 2019
  • 40% reduction of CO2 emissions from ground vehicles by 2025 compared to 2015

Icelandair on track towards 2030 target of reducing CO2/OTK

Operational efficiency

Operational efficiency plays a key role in reaching our ambitious goals to reduce carbon emissions. When finding ways to improve our operational efficiency we constantly consider that success is the sum of small efforts.

In the first quarter of 2022 we set goals to optimize the loading of bags and cargo for the 737 MAX fleet. By achieving this goal, we managed to reduce CO2 emissions by up to 160 kg per hour of flight. Just on a single flight from Keflavík to Seattle, that change reduces emission by more than a ton.

In the second quarter we focused on improving how we actively manage our network in real time. We are unable to know in advance exactly when an aircraft will take off so by revaluing the planned speed of the aircraft after take-off, we managed to reduce the CO2 emissions in the latter two quarters by approximately 130 tons of CO2 compared to planned emissions.

Day by day these projects bring us closer to our future goals of improved environmental performance.

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Emissions and monitoring

Icelandair’s total emissions from aviation in 2022 were 950,107 tCO2e, a reduction of 30% compared to 2019. The emissions from the route network include domestic and regional routes.

Since the beginning of 2012 all airlines offering intra-European destinations have been required to comply with the EU Emissions Trading Scheme (ETS) and pay for its CO2 emissions. As a part of the EU-ETS Icelandair submit an Annual Emissions Monitoring Plan and Annual Emission Report to the Environment Agency of Iceland, audited by a third party. Since 2020 Icelandair has voluntary participated in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and submitted information regarding emission.

Total CO2 emissions

kgCO2 per OTK

At Icelandair, we understand that our customers value on-time performance and a positive travel experience. That is why we prioritize operational efficiency throughout our organization. Continuous efforts to optimize operational efficiency allows us to better manage our resources, reduce costs, and improve our environmental sustainability. By continuously exploring new ways to improve our operations, we are able to deliver a reliable and enjoyable travel experience for our customers while also fulfilling our responsibility to the environment.

Arnar Gauti Guðmundsson

Manager Operational Readiness


Fleet renewal

The year 2022 was an eventful year for fleet renewal in the international network. Icelandair took delivery of seven Boeing 737 MAX aircraft, including the last three aircraft from the Boeing order made in 2013 and four additional aircraft of the same type from other sources. They are of a new generation of more environmentally friendly aircraft and therefore an important part of reducing carbon emissions in the operations.

The MAX has proven to be a good fit to Icelandair’s route network, and its fuel efficiency contributes positively to the Company’s efforts of reducing its carbon emissions.

Fleet renewal is currently the most effective measure to reach ambitious goals in reducing carbon emissions. Working towards a sustainable future of aviation is an important emphasis for Icelandair now and going forward.

Fuel efficiency is measured in fuel burn per operational ton kilometer (OTK) which takes into consideration the weight of the aircraft, passengers and cargo.

Less load and reduced food waste

In March 2022, changes were made to the catering service on board and now passengers can order a variety of meals in advance. In addition to the increased service level, the aim is to reflect the Company's focus on sustainability and reduce food waste. This allows us to better estimate the amount of food needed on board and thereby manage the total load on the aircraft more accurately.

Large-Onboard service - Food2