AirBaltic rides the NFT hype, minting an emissions mess

Sensing an opportunity to cash in on the hype, Latvian airline airBaltic is now issuing non-fungible tokens (NFTs) to celebrate its aircraft and local destinations. The company sees the effort “as a part of its marketing strategy, helping airBaltic to gain global recognition, helping to promote tourism in Latvia,” with the funds raised a small side benefit.

In a somewhat bizarre twist the airline also draws parallels between accepting bitcoin for payment and the issuance of the NFTs. While both depend on blockchains to exist, the similarities disappear pretty quickly after that.

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The NFT launch this month is just the beginning. AirBaltic ultimately plans for a portfolio of NFTs, one representing the aircraft in its fleet. Each plane is named after a local destination in the Baltic states. By issuing the NFTs the company plans to draw attention to the destinations, hopefully generating additional passenger traffic as well.

First up is Kuldiga, with 100 “unique collectibles” minted. With the tokens all pointing to the same image it is unclear what is unique about them other than a sequence number.

By purchasing one of the 100 NFTs for the Latvian town of Kuldiga for 0.05 ETH (~$110) the buyer acquires the token pointing to the above image. This gives them the right to show off the NFT – effectively offering advertising for the airline – but no other rights to the intellectual property nor the image. Quite the opposite, in fact.

The terms of sale explicitly prohibit efforts to:

(i) alter, modify, duplicate, translate, disassemble, de-compile or attempt to recreate airBaltic’s IPR, in whole or in part, (ii) modify, separate or create any derivative works from airBaltic’s IPR or any part thereof, (iii) merge airBaltic’s IPR with any other work, (iv) sell, sublicense, lease, rent, loan, assign, convey or otherwise transfer airBaltic’s IPR or any part thereof.

The NFT itself is just a pointer to the original art, not ownership of the image nor any other rights typically associated with buying artwork.

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Questionable environmental impact

Each NFT minted comes with a campaign to attract travelers to the associated town. That’s good for AirBaltic’s business, assuming the passengers fly the home-town carrier on the way in. But the process also comes with notable environmental costs.

Each NFT minted requires a transaction to be processed and committed in the Ethereum blockchain. So does selling the NFT. And those transactions requires computing power which burns energy. Some NFT exchanges are suggesting that the power consumed is minimal and would have been used anyways to power different transactions. Others suggest a more significant impact.

Digital artist Joanie Lemercier canceled his second planned NFT sale after being informed of the environmental impact of the platform’s sales:

It turns out my release of 6 CryptoArt works consumed in 10 seconds more electricity than the entire studio over the past 2 years.

Even if the emissions involved are overstated by a factor of 100, it is hard to reconcile that impact with the marketing boost airBaltic anticipates from the move.

Given that airlines already face significant headwinds with respect to emissions and carbon offsetting one might think that the impact of minting and selling NFTs should be a reason to not pursue the path. AirBaltic remains committed, however, at least for now.

In a statement the company suggests its transition to the A220 makes up for the NFT emissions:

airBaltic is strongly committed to continue reducing its impact on the environment. In addition to introducing a single Airbus A220-300 type fleet, which is currently the most efficient aircraft of its size, the company has implemented various additional projects.