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ICAO agrees on a market-based measure to offset CO2 emissions from aviation

8 October 2016

At its 39th Assembly held in Montreal, the UN International Civil Aviation Organization (ICAO) agreed to recommend adoption of a final Resolution text on a new global market-based measure (GMBM) to control CO2 emissions from international aviation. The accord—signed by 191 countries and applicable to passenger and cargo flights—will go into force on November 4th.

ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) has been designed to achieve carbon-neutral growth of the aviation industry from 2020 onwards. Under the CORSIA scheme, the increased CO2 emissions from international aviation are to be offset by CO2 reduction measures outside of the international aviation sector. These reductions could be achieved through CO2 “offset credits” from crediting mechanisms and “allowances” from emissions trading schemes. The buying and selling of eligible emission units would occur through a carbon market. CORSIA does not require direct emission reductions from aviation, such as through the use of more efficient engines or renewable fuels.

Implementation of the CORSIA will begin with a pilot phase from 2021 through 2023, followed by a first phase, from 2024 through 2026. Participation in both of these early stages will be voluntary. The second phase, from 2027 to 2035, would be mandatory for all member states, with certain exemptions (such as for some developing countries and countries with very low levels of international aviation activity). As of 6 October 2016, 65 states representing 86.5% of international aviation activity intend to voluntarily participate in the GMBM scheme from its outset.

Once participation of states and routes covered by the CORSIA are defined in a given year from 2021, and offsetting requirements in the given year (i.e., increased emissions beyond the average baseline emissions of 2019 and 2020) are set, the requirements will be distributed among aircraft operators participating in the scheme. Buying of the carbon offsets is anticipated to cost about 2% of the aviation industry’s annual revenues.

The ICAO scheme has been criticized by environmental organizations. The Transport & Environment group said the deal’s coverage of emissions falls well short of the ‘carbon neutral growth in 2020’ target promised by ICAO and industry, and the lack of clear rules for offsets presents a risk to the measure’s environmental effectiveness.

Source: ICAO