The aviation sector is on track to launch the world’s largest emissions trading scheme with a goal to reduce some 2.6 billion tonnes of CO2 over the period 2021 – 2035. At at a price of $10 USD per tonne of CO2 reduce this represents a $52 billion USD new market for carbon credits. The international scheme for carbon offsetting for international airlines is called CORSIA. All airlines with greenhouse emissions of above 10,000 tonnes of CO2e per year
CORSIA will be implemented in two phases with monitoring, reporting, and verification starting two years prior to Phase 1. From January 2019 all airlines will have to report greenhouse gas emissions from all their international flights with mandatory monitoring and verification. From January 2021, Phase 1 of CORSIA starts. Phase 1 of CORSIA will see all flights between states that volunteer to participant in the pilot/first phase be subject to offsetting requirements. As of March 2018, 73 states have volunteered for this first phase, including New Zealand. Under the second phase from January 2027 onwards through to 2035, all international flights will be subject to offsetting requirements with the exception of the following: (i) flights to and from Least Developed Countries, (ii) Small Island Developing States, Landlocked Developing Countries, and (iii) States that represent less than 0.5% of international revenue-tonne-kilometres (RTK).
In addition, while aviation already is included in the EU Emissions Trading Scheme since 2012, there is currently no linkage to international carbon markets or to CORSIA. The way in which aviation will be integrated into the European Union ETS after 2020 and its potential interaction with CORSIA remains uncertain currently. Further clarity is expected by 2020.
If you are an airline who needs to better understand the impact of CORSIA on your business, please get in touch with us at [email protected]