T&E: Why Europe should focus on its own airline carbon market and forget the UN scheme

Transport & Environment argues why Europe should not depend on the inadequate, ineffective CORSIA scheme, for its aviation CO2 emissions. CORSIA does not include an actual emissions reduction target. It is at odds with the Paris agreement’s goals. The quality of the offsets is not good enough; there are so many of them that the price is far too low to make airlines reduce emissions.  An EU system could do better.  T&E says: “The aviation geeks of this world will know the argument [that international aviation can only be controlled by ICAO] by heart now: “aviation is an international mode of transport, so it requires international solutions”. But does it, really? A majority of the aviation industry is eager to privilege international solutions when they want to escape their environmental responsibilities, but are very happy to promote national solutions when it comes to getting [Covid] bailout money. This needs to stop. Aviation can’t have it both ways: it’s unfair for the sector to get support in bad times and refuse to contribute to European and national environmental efforts in good times. Especially when the industry isn’t effectively dealing with aviation’s climate problem by itself”. 


Why Europe should focus on its own airline carbon market and forget the UN scheme

At the beginning of the Covid-19 outbreak, it was difficult to imagine how rapidly the virus would impact our daily lives, and the aviation sector in particular. While we grappled with Zoom calls, and while governments rushed to flatten the curve, the aviation sector was knocking on doors asking for more special treatment – on top of the tax exemptions and light-touch climate regulation that it already enjoys.

By Jo Dardenne (Transport & Environment)

August 3, 2020

Even after receiving over €30 billion of taxpayers’ money, it didn’t take long for airlines to ask the UN aviation agency, ICAO, to change the rules of a global offsetting scheme for aviation’s carbon emissions. The scheme, known as Corsia, obliges airlines to purchase offsets for emissions over 2020 levels, taking the average emissions released in 2019 and 2020 as a baseline. When Covid grounded flights, airlines asked for this baseline to be changed to only take into account 2019 figures because emissions would be so low in 2020 that they would have to offset more than they expected.

But whatever the baseline, will this scheme really place a significant financial burden on airlines, and was it ever going to solve aviation’s climate problems?

First, Corsia does not include an actual emissions reduction target. It relies on airlines buying offsets to compensate for their emissions growth, which will never be enough to offset the known damage of flying, and is also at odds with the Paris agreement’s goals. All countries and sectors are expected to reduce their emissions, including you, aviation!

Second, look at the actual quality and price of the offsets that airlines are expected to buy to compensate for their emissions. At the start of 2020, ICAO’s governing body agreed that six offsetting programmes were eligible to be considered within Corsia, one of which is the Clean Development Mechanism (CDM). The European Commission already reported that 85% of the offset projects under the CDM failed to reduce emissions. ICAO did adopt a safeguard on the age of eligible offsets, which slightly improved the environmental integrity of the scheme, but in the end would still lead to an oversupply of offsets. So, not only are the offsets of questionable quality but the amounts available to buy will be so high that airlines can continue polluting with the assurance that there will always be enough cheap offsets to purchase.

Current and potential supplies are expected to be between 2 and 4 times higher than demand estimated in the industry association IATA’s latest Covid-19 scenarios. With offsets expected to cost a few cents, the financial impact of Corsia on airlines is expected to be minimal. Even ICAO says it expects the cost of compliance to range between 0.2 to 0.6% of total revenues from international aviation in 2025. In comparison, the carbon price in the EU’s carbon market (ETS) averaged around €25 a tonne CO2 in 2019. By changing Corsia’s baseline year, airlines might not even have any offsetting obligations for years – depending on how fast traffic bounces back. So, what we knew would be a hopelessly cheap offsetting scheme will, in its initial years, be non-existent.

So what should governments do?

Don’t buy the line that international aviation emissions can only be regulated by ICAO. The aviation geeks of this world will know the argument by heart now: “aviation is an international mode of transport, so it requires international solutions”. But does it, really? A majority of the aviation industry is eager to privilege international solutions when they want to escape their environmental responsibilities, but are very happy to promote national solutions when it comes to getting bailout money. This needs to stop. Aviation can’t have it both ways: it’s unfair for the sector to get support in bad times and refuse to contribute to European and national environmental efforts in good times. Especially when the industry isn’t effectively dealing with aviation’s climate problem by itself.

Publish Corsia’s impact analysis and reform the EU ETS. When the EU ETS was revised in 2017, the Commission was tasked with assessing the environmental effectiveness of Corsia before proposing to integrate the scheme in EU law. As was highlighted by MEPs, this report hasn’t yet been published. Its eventual arrival will give the EU the opportunity to discuss an ambitious reform of the EU’s carbon market rules for aviation, as suggested in the Commission’s inception impact assessment for the aviation ETS rules.

Back in 2012, the scope of the ETS was reduced to give ICAO time to come up with a credible international emission reduction scheme. Now that we see Corsia and ICAO are failing to deliver, isn’t it time for the EU to show true environmental leadership by strengthening the ETS? Who knows what else airlines will succeed in watering down in Corsia when it’s reviewed in 2022? Now is the chance for Europe and its member states to turn off autopilot and steer aviation towards sustainability.




See earlier:

Aviation industry decision to weaken CORSIA climate plan could break ICAO’s own rules

Countries attending the UN’s ICAO meeting this week look set to weaken the only international policy to address the climate impact of aircraft. But the way the decision is being made could be in violation of the organisation’s own rules. ICAO has for years been supposed to take responsibility for international aviation CO2 emissions, but have done almost nothing. It has a scheme, CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) set up in 2016. It would, at best, deliver only small CO2 emissions reductions, nowhere approaching on the scale needed. Now ICAO plans to further weaken the CORSIA scheme, by changing the way the baseline for emissions is determined. A bad scheme would become a very bad scheme.  This may be illegal, according to its own regulations – ICAO has always been opaque and concealed information. The change of baseline, using only 2019 emissions, not the average of 2019 + 2020, would mean no airline offsetting obligations until 2028 or later. It could also reduce the overall chance of cutting aviation carbon by 25-75%. The final decision on the baseline change is expected on 26th June.

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‘Final blow’ to aviation climate plan as EU agrees to weaken rules

There had been hopes that the EU would insist on keeping more effective means of reducing carbon emitted by airlines. The current proposals by ICAO, in their CORSIA scheme, are too weak to be effective. The EU now say they will back the CORSIA scheme, which means watering down the rules.  Airlines want the baseline period, from which to measure airline carbon emissions for the CORSIA scheme, to be the two years, 2019 and 2020. But 2020 is going to be a year of atypically low airline activity. So they want the base line period to be just 2019. That means giving airlines a free pass to pollute for the next 3 to 6 years depending on the speed of the Covid recovery. That is what the EU has now agreed to, having initially stood out against it. So airlines could save $15 billion in carbon offsetting costs, paying nothing till 2024. This weakening of the scheme would further damage the credibility of the CORSIA offsetting scheme, which is widely regarded as weak and not aligned with the Paris Agreement goals. It will now become essentially meaningless.  The ineffective CORSIA scheme undermines many governments’ stated intentions to bolster climate ambition.

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Open letter to ICAO – the CORSIA scheme should not be weakened, just because of Covid

Thirteen organisations concerned with aviation carbon emissions and carbon trading, have written to ICAO to ask that they stick to the intentions for how the CORSIA scheme is set up, and do not weaken it. The stated purpose of CORSIA is to help the international aviation sector achieve “carbon-neutral growth from 2020”. It is due to use as a baseline the aviation CO2 emissions from 2019 and 2020. However, with the Covid pandemic, airline carbon emissions will be much lower than anticipated this year. If ICAO used 2019 and 2020, the amount of carbon the sector could emit, and the cost of emitting it, would be far lower than anticipated. So IATA wants to change the rules, so the carbon baseline only considers 2019, not including 2020, which would result in significantly lower offsetting requirements for airlines compared to the current CORSIA design. In fact, under most recovery scenarios, the change sought by IATA would eliminate all offsetting requirements for the duration of the CORSIA pilot phase and potentially several years thereafter. The rules need to be adhered to.

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European Commission will keep intra-European aviation within the ETS, as well as being in the ICAO’s CORSIA scheme

ICAO’s planned global scheme for offsetting emissions from international flights will supplement, not replace, the European Union carbon market, the EU’s transport commissioner has now said. With the United Nations (ICAO) planning a 2021 launch of CORSIA, clarity is needed that the European Commission will not remove aviation from the EU emissions trading system (ETS). Transport Commissioner, Adian Valean said:  “CORSIA will not put the ETS at stake. It will not replace the ETS. It will complement the ETS.”  The ETS only covers flights between European countries, not outside Europe. It is a more effective scheme, in incentivising lower carbon emissions, than CORSIA – which is very weak. But ICAO wants the EU to remove these flights from its carbon market so that CORSIA can be the only market-based measure tackling international aviation emissions. The Commission, the 27-nation EU’s executive is assessing how the two systems will co-exist.  It is important that EU flights outside Europe are in the CORSIA scheme, and Europe participates – otherwise other countries may also decide not to take part.

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IATA calls for change in CORSIA baseline to protect airlines from future higher offsetting requirements

Fri 3 Apr 2020
By GreenAir online

As a result of the coronavirus pandemic, IATA has called on the ICAO Council to change the baseline calculation used for the CORSIA offsetting scheme for international aviation emissions.

Under rules agreed by ICAO, the baseline is set at the average emissions for the years 2019 and 2020. For the 15-year duration of CORSIA starting next year, airlines are required to purchase offsets to cover any annual growth in emissions above the baseline.
The collapse in global air traffic as a result of the outbreak, with demand unlikely to recover this year, will lead to significantly lower 2020 emissions. This in turn will lower the baseline considerably than was previously projected and result in much higher anticipated offsetting requirements and therefore costs once the sector returns to previous levels, says IATA.
It requests the Council to make the change no later than the end of June.

In a position paper, IATA says the baseline must be adjusted “to ensure the sustainable development of international aviation and avoid an inappropriate economic burden on the sector.” It recommends that only emissions for 2019 be used for calculating the baseline.

In support of its justification for a change in the baseline, the IATA paper quotes paragraph 16 of the A40-19 CORSIA resolution passed at the last ICAO Assembly in 2019,  “… on the need to provide for safeguards in the CORSIA to ensure the sustainable development of the international aviation sector and against inappropriate economic burden on international aviation, and requests the Council to decide the basis and criteria for triggering such action and identify possible means to address these issues …”.

The IATA paper argues: “Allowing the use of 2019 emissions as an alternative would preserve the environmental benefits that were forecast to be achieved through CORSIA as the adjusted baseline would remain more stringent than what the baseline would have been without the Covid-19 crisis.”

The airline trade body is also concerned that countries already signed up to join the voluntary pilot and first phases of CORSIA, and those still considering joining, may reconsider their positions in order to protect their airlines from potential higher compliance costs if no change is made to the 2019/20 calculation. States have until June 30 to notify ICAO of their intention to join the scheme from the beginning or decide to discontinue their voluntary participation.

Accordingly, IATA urges the Council to take a decision on a baseline adjustment before this date at the latest.

IATA also calls on ICAO to urge States to extend the May 31 deadline for the submission by aeroplane operators of their 2019 verified emissions report until at least the end of October 2020. It argues Covid-19 travel restrictions and confinement measures in many countries “have made it impossible for verification bodies to conduct verification activities.”

Historically, air transport activity has rebounded quickly after previous global crises but IATA’s March 24 Covid-19 impact assessment points to the potential for a deep financial recession following the outbreak that would delay the air transport sector’s recovery to previous levels. If this was to be the case and a 2019 only baseline applied to CORSIA, this could considerably reduce airline demand for offsets, at least in the 2021-23 pilot phase.Although it is too early to predict the impact of the pandemic on total emissions from international aviation this year, IATA’s current forecast is for a 38% fall in global passenger traffic in 2020. According to IATA, global emissions in 2019 – from domestic as well as international flights – totalled 915 million tonnes. Emissions from international aviation activity, which will be covered by CORSIA, account for around 60% of the global total.