Sustainability at Rolls-Royce: Clean Tech & Green Aviation
Rolls Royce (RR) has posted a huge performance in the first half of 2025, reinforcing the commercial and environmental momentum behind its multi-year transformation strategy.
With operating profits surging 50% and free cash flow reaching £1.6bn (US$2.13bn), the business is outperforming even in the face of supply chain constraints, inflationary pressure and tariffs.
At the heart of this resurgence is a sharpened focus on efficiency, low-carbon technologies and long-term resilience, all of which are accelerating the company’s shift towards more sustainable operations and value creation.
Accelerating low-carbon energy solutions
One of the most significant sustainability milestones is the selection of RR SMR (Small Modular Reactor) as the sole provider in the UK’s Great British Energy – Nuclear (GBEN) programme.
The project, which will deliver three SMR units with the first connected to the grid by the mid-2030s, is expected to generate positive cash flow starting in late 2025 and become fully profitable by 2030.
The strategic investment by ČEZ Group, a Czech utility operator, not only brings additional capital but also strengthens the project’s nuclear expertise and potential for future deployments in Europe.
Further international interest, such as being shortlisted by Vattenfall in Sweden, highlights the growing global appetite for clean, modular nuclear power to support decarbonisation and grid stability.
The SMR programme, if scaled, could be pivotal in reducing reliance on fossil fuels and accelerating national net zero targets.
“Our multi-year transformation continues to deliver,” says Tufan Erginbilgic, CEO of Rolls Royce.
“Our actions led to strong first half year results, despite the challenges of the supply chain and tariffs. We are continuing to expand the earnings and cash potential of Rolls-Royce.
“We also delivered continued strong operational and strategic progress in the first half of 2025.
“A strong start to the year gives us confidence to raise our guidance for 2025.
“We see these targets as a milestone, not a destination, with substantial growth prospects beyond the mid-term.”
Growth in battery storage and green technologies
RR is also advancing battery energy storage systems (BESS), with major orders including from Lithuania’s Ignitis Group.
This business is now supporting revenue growth across the Power Systems division and is on course to reach breakeven in the near term.
The company anticipates 20% annual revenue growth in its power generation segment, underpinned by booming demand for data centre backup power – a key area of focus for digital infrastructure and energy resilience.
Beyond hardware, RR is embedding sustainability into product development.
The next-generation engines under development are expected to offer lower emissions and improved fuel efficiency, with entry into service by 2028.
In parallel, military engine upgrades with higher power density also reflect a focus on energy performance and environmental impact.
Rolls Royce Target Progress
RR has set multiple initiatives to meet in order to become as sustainable as possible.
To date, RR has achieved its aim to reduce energy use in operations and facilities by 50%, normalised by revenue and its ambition to achieve a GrandMean in Gallup’s top quartile (75th percentile) for large manufacturing companies by the end of 2023.
So far, the company is making key progress on:
- Delivering a 46% reduction of GHG emissions from operations, facilities and product testing by 2030 vs 2019 baseline, so far its 46%
- Achieving a Total Reportable Injury (TRI) rate of 0.33 per 100 employees by 2025, so far its 0.32
- Inspiring 25 million of young innovators by 2030, 45% to date
- Reducing total solid and liquid waste in operations and facilities by 25%, normalised by revenue, so far 65% has been achieved
- Increasing the recycling and recovery rate to 68% by 2025 whilst maintaining zero non-hazardous waste to landfill, so far 60% has been reached.
RR’s initiatives were introduced in 2015, based on its 2014 performance, to help the company manage risk and reduce emission and cost across the company.
Sustainable aviation
In Civil Aerospace, RR has made significant progress improving the fuel efficiency and durability of its engines, a critical factor in decarbonising aviation.
RR announced in late 2023 that it had successfully completed its compatibility testing of 100% SAF on all of its in-production civil aero engine types.
The discovery fulfils the company’s commitment made in 2021, to prove that there are no engine-technology barriers to the use of 100% SAF.
Other major highlights in the company’s progress include:
- Trent XWB-84EP: Now in service, this upgraded variant improves fuel consumption by over 1% and extends engine lifespan.
- Trent 1000 TEN: The new high-pressure turbine blade will more than double its time on wing, reducing waste and emissions associated with engine maintenance.
- Trent 7000 and 1000: Set to deliver a further 30% time-on-wing benefit by year-end 2025.
These enhancements are driven by data analytics and digital engineering.
“This is an important milestone, not just for Rolls-Royce, but also for the wider civil aerospace industry,” says Simon Burr, Group Director of Engineering, Technology and Safety at Rolls-Royce plc.
“We hope the success of these tests provides a level of technical validation that supports those who seek to invest in the production of 100% SAF going forward.”
Cloud-based Engine Health Monitoring (EHM) and adoption of AI-driven performance diagnostics are optimising fleet uptime while lowering environmental impact — all contributing to more efficient and sustainable operations.
Operational resilience and climate commitment
RR’s transformation has been underpinned by a strong emphasis on efficiency and simplification.
Since 2022, the company has delivered more than £850m (US$1.13bn) in third-party cost savings, with a target of exceeding £1bn (US$1.33bn) by the end of 2025.
The TCC/GM ratio (total cash costs to gross margin) has improved to 0.35x, described as "best-in-class" and essential for long-term climate and financial resilience.
These cost efficiencies have enabled sustained investment in R&D, site decarbonisation, and advanced product development — including clean propulsion and digital systems.
The company is also adopting zero-based budgeting to better align resources with sustainability priorities.
Climate impact disclosure and financial alignment
RR has reaffirmed its commitment to the four pillars of its energy transition strategy:
- Decarbonising operations and facilities through clean energy sourcing and efficiency.
- Enabling net zero-compatible products: 100% of its commercial aero engines and 80% of the Power Systems portfolio are already compatible with sustainable fuels.
- Developing new low-carbon solutions, including SMRs and battery storage.
- Engaging public policy and regulation to support market shifts toward climate goals.
Importantly, the company continues to assess the financial implications of climate risks including carbon pricing and customer demand shifts.
While no material impact has yet been recorded, sensitivity analyses are ongoing, a key example being, the doubling of carbon prices would reduce recognised deferred tax assets by £90m (US$119.5m).
