Airline emissions account for 2 percent of global greenhouse gas emissions and, without stronger measures, could triple by 2050. In 2010, the International Civil Aviation Organisation (ICAO), the United Nations body that governs civil aviation, set a goal of carbon-neutral growth starting in 2020. At the 39th ICAO Assembly in October 2016, Member States agreed to policies to meet the carbon-neutral goal: international CO2 standards for aircraft; and a market-based mechanism to offset aviation emissions with reductions in other sectors.

Meeting the carbon-neutral goal will require efficiency improvements to reduce fuel use, lower carbon fuels, operation improvements, and infrastructure upgrades.

CO₂ Standards for Aircraft

Governments worked with the airline industry to design a market-based mechanism enabling airlines to offset increased emissions with reductions in other sectors.  Essentially, carbon offsets are reductions in greenhouse gas emissions or removals of greenhouse gases from the atmosphere, that would not happen without the financial support to the projects.

With air travel projected to continue rising rapidly, airlines are expected to rely heavily on offsets to achieve carbon-neutral growth. The World Bank estimates demand for offsets to reach 250 MtCO2e by 2030 and a cumulative 13-20 GtCO2e by 2050. However, the atmosphere does not recognize where these reductions come from, just that they are real reductions, making the certification of offsets and a credible accounting system critically important.

The market-based mechanism  is known as the Carbon Offset and Reduction Scheme for International Aviation (CORSIA). CORSIA has a phased implementation structure:

• A voluntary pilot phase from 2021 to 2023: Participating States can choose between two approaches: offset requirements during the pilot phase can be calculated on the basis of an operator’s emissions during the given year (e.g. 2021-level emissions in 2021), or they could refer back to 2020 emissions.
• A first phase from 2024 through 2026, voluntary for States. Determination of the offsetting requirement is based on the emissions in a given year (e.g. 2024, 2025, and 2026).
• A second phase from 2027 through 2035, mandatory for most States. Exemptions from the second phase apply to least developed countries (LDCs), small island developing states (SIDS), landlocked developing countries (LLDCs) and those with a share of international aviation below 0.5 percent in 2018, unless they volunteer. This is calculated on the basis of Revenue-Tonne-Kilometers (RTK), a measure of revenue generated moving a metric tonne by one kilometer.

In the pilot phase, first phase, and the first two years of the second phase (i.e. from 2021 to 2029) the distribution of offsetting requirements is on the basis of the growth rate of the sector overall, rather than each individual airline’s growth rate. This ratio will change over time, however, so that in 2030 to 2032, 20 percent will be on the basis of individual airline’s growth rate, and the rest on the basis of the sector. This grows to 70 percent individual rate applied from 2032 to 2035.

As of May 2019, 80 countries have joined the pilot program, including the U.S., European states, Mexico and others. While the pilot program does not start until 2021, States operating international flights are requested to implement a monitoring, reporting and verification (MRV) system from January 1, 2019 and make the necessary arrangements for the implementation of the ICAO MRV System. Collecting CO2 emissions data from 2019 will allow for setting the sectoral baseline as the average emissions for 2019 and 2020.

In March 2019, the ICAO Council made another set of decisions towards the implementation of CORSIA. The Council agreed on the operationalization of a Technical Advisory Body (TAB), a group of experts nominated by States and mandated to make recommendations to the Council on “eligible emissions units” for use by airlines in CORSIA. It also approved Emissions Unit Criteria (EUC), which determine which offsets are eligible to be used for compliance.

The TAB will begin its work on CORSIA-eligible units before reporting for the Council for formal agreement.

In addition, rules for the operation of Article 6 of the Paris Agreement, which allows for countries to achieve their nationally determined contributions through the use of carbon market mechanisms (cooperative approaches), were not adopted at the UNFCCC Conference of the Parties in Katowice, Poland in December 2018. Transparency provisions provide some important guidance, but CORSIA would benefit from clearer accounting rules under the Paris Agreement to avoid double counting of units used by airlines to meet their obligations under CORSIA. A decision on Article 6 is expected to be adopted at the Santiago climate conference in December 2019.