CORSIA Overview

 

In January 2019, airlines began monitoring their CO2 emissions under CORSIA as part of a UN climate deal under the ICAO.  CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is an agreement between 191 countries which was signed in Montreal on Oct 6, 2016 and is designed to ensure any rise in international aviation emissions above 2020 levels are offset elsewhere.

 

In 2019, domestic and international flights are projected to emit over 900m tons of CO2 (Mt CO2), which is likely to be over 2.3% of global CO2 emissions.  Aviation emissions are supposed to be capped or decrease, but instead they have increased by 26% since 2013 and are expected to continue to grow.

CORSIA is designed to help the aviation industry reach its aspirational goal of making growth in international flights after 2020 carbon neutral.  Note that while the shipping industry is looking to reduce carbon emissions, the aviation industry is only aspiring to make future growth carbon neutral by requiring airlines to buy emissions reduction offsets to compensate for future increases in aviation emissions.  ICAO is also pushing airlines to reduce emissions through increasing fuel efficiency and through improved operations.

 

Corsia implementation timeline

CORSIA will expand compliance requirements over time in 3 phases, but before the pilot phase even starts in 2021, all airlines were required to start collecting baseline emissions data on 1 January 2019.

January 2021 thru Dec 2023
The first Voluntary Phase is only “voluntary” in so far as certain countries volunteered to participate.  As of 16​ July​ 2019, 81 States, representing 76.63​% of international aviation​ activity, intend to voluntarily participate in the first voluntary phase of CORSIA meaning that any airlines which operate routes between these countries are required to offset any increases in carbon emissions.  For example, even though China is not (yet) volunteering to participate in Phase I, when Air China flies from Singapore to the USA, it will be required to offset any increases in carbon emissions for that route.   For AirCarbon this is important because with the participation of the United States, UK, France, Germany, Turkey, United Arab Emirates, Japan, Korea, and Indonesia, most of the major international flight routes are covered starting in 2021.  This ensures that almost all international airlines will be required to purchase CORSIA compliant carbon offsets starting in 2021.  In fact, most major airlines already purchase non-CORSIA compliant offsets for their domestic flights or allow their passengers to do so.

Jan 2024 thru Dec 2026
This phase is really just a continuation of the first phase, but member states will be able to join or withdraw in between phases.

January 2027 thru Dec 2035
In this phase all ICAO member states must participate (except some of the world’s smallest and poorest countries).

Buying Offsets

At the end of each phase, participating airlines are required to submit a report showing they have purchased offsets for emissions growth above 2020 levels for the previous three years.

Official offsets are credits that have been verified by CORSIA registrars as having reduced emissions elsewhere. Airlines and other market participants can hold or trade these offsets during the period of each 3 year Phase, but by the end of the phase, airlines must hold and “retire” or “cancel” the proper amount of carbon offsets.  Once offsets are cancelled they can no longer be bought or sold and must be removed from circulation to ensure that no emissions reductions are “double counted” for emissions reductions purposes.

 

Which offsets are approved under CORSIA is a critical question which has not yet been entirely settled.  There are political and economic concerns especially on the part of China, India, and Brazil regarding which offsets do or do not represent genuine and additional emissions reduction and reductions that importantly would not occur anyway if not compensated by CORSIA or the aviation industry.  The system will only work if it results in legitimate and substantial reduction in atmospheric carbon, but how offsets are created can dramatically impact how the financial rewards associated with carbon reduction are spread across participating countries.

 

The process for defining offset eligibility has already been started by the Corsia Technical Advisory Body (TAB) and should be complete by the end of 2019.  The first controversial questions concerns the age or “vintage” of the offset credits that will be permitted.  Brazil, which has many unretired UNFCCC offsets wants no restriction on the age of offsets, but for a program that is trying to reduce current and future carbon emissions, offsets which were generated 10 years ago don’t help.  Brazil, of course, wants to be able to sell these “stranded assets”.  The TAB has not even decided yet which activities, like reforestation projects, will be approved.

 

The second debate centers on “self-determination” or who will approve projects for CORSIA eligibility.  Some countries, notably China, wants to be able to determine which projects in China are eligible while most countries want a 3rd party (ICAO) to provide a consistent approval process across all countries.   

Finally, there is debate regarding using “CORSIA eligible fuels” to reduce offsetting obligations by airlines.  Lower carbon aviation fuels are fuels which create less carbon emissions during the refinery process.  Saudi Arabia pushed for certain fuels to be counted as lower emissions thus making them eligible for reducing the offsetting requirements.  Many environmentalists are concerned that this will simply reduce the effectiveness of CORSIA.

It is thus worth noting that Brazil, China, and Saudi Arabia are three of the largest countries that have not yet signed onto the initial phase of CORSIA starting in 2021.  Ironically, some EU member states are concerned that CORSIA is just a weaker form of the EU Emissions Trading System (EU ETS) which currently covers flights within EU member states.

 

Despite any controversy regarding CORSIA, it is an international regulatory effort which will go into effect within a year which will impact most international airlines.  AirCarbon is committed to making compliance by airlines and participation by carbon capture projects easier and more efficient.

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