IATA and Industry Partners Urge Governments to Expedite Release of CORSIA Eligible Emissions Units.

The International Air Transport Association (IATA), together with carbon market stakeholders, is calling on governments worldwide to urgently address the extremely limited supply of carbon credits available for airlines to fulfill their obligations under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

Specifically, the signatories call on governments to issue Letters of Authorization (LoAs) which enable the release of CORSIA Eligible Emissions Units (EEUs) for purchase by airlines. The timely issuance of LoAs is key to:

•    Creating a robust and transparent market for CORSIA EEUs,

•    Facilitating the successful implementation of CORSIA,

•    Safeguarding the environmental integrity of international aviation’s climate commitments.

“CORSIA is a vital part of aviation’s global climate strategy. Through it, airlines mitigate their climate impact by funding verified emissions reductions in other sectors. In generating this climate finance CORSIA also plays a key role in both environmental and socio-economic progress, especially in developing countries. To unlock CORSIA’s climate finance potential and ensure its contribution to aviation’s decarbonisation, states must authorise the release of EEUs. That is one of our top messages to the 193 member states at the ICAO Assembly”, said Yue Huang, Assistant Director Climate Policy, in an ICAO Skytalks session at the 42nd ICAO Assembly, in Montreal, Canada.

“Africa expresses support to CORSIA. Unlocking access to CORSIA-eligible units and attracting climate finance. This will enable Africa to show commitment to sustainability and shape global solutions with regional perspectives. This is about ensuring that our economies and operators benefit fairly from the transition to a low-carbon future”, said Adefunke Adeyemi, Secretary-General of the African Civil Aviation Commission (AFCAC) at the same event.

Letters of Authorisation (LoAs) –

LoAs are official documents issued by host countries authorising the use of carbon credits (known as Internationally Transferred Mitigation Outcomes or ITMOs) for CORSIA compliance, according to the provisions of Article 6 of the Paris Agreement. The letters confirm that the emissions reductions associated with a carbon credit will only be counted once, as part of CORSIA, by requiring the host country to apply a “corresponding adjustment” to its own Nationally Determined Contribution (NDC). Without LoAs, airlines face a shortage of CORSIA-eligible units, placing CORSIA in jeopardy, and depriving project developers of airline funds as a source of climate finance.

The Demand-Supply Gap –

IATA forecasts that airlines will require between 146 and 236 million EEUs during CORSIA’s first phase (2024–2026). However, the current supply of CORSIA-eligible units is limited to the 15.8 million credits made available by Guyana. To assist states in issuing LoAs, IATA has published guidance documents and offers practical tools and workshops.

The signatories to the Joint Statement are:

Airline Industry Associations

•    International Air Transport Association

•    African Airlines Association

•    Air Transport Action Group

•    Airlines Association of Southern Africa

•    Airlines for America

•    Airlines for Europe

•    Airlines International Representation in Europe

•    Arab Air Carriers’ Organization

•    Association of Asia Pacific Airlines

•    European Regions Airline Association

•    Latin American and Caribbean Air Transport Association

•    National Airlines Council of Canada

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Carbon Market Stakeholders

•    International Emissions Trading Association

•    Global Carbon Council

Project Developers:

•    Burnstoves

•    Hestian

•    Iceberg

•    Koko Networks

•    Korea Carbon Management

•    Sistema. Bio

•    UpEnergy

•    Valor Carbon

•    WeAct

Offsetting CO2 Emissions with CORSIA –

In 2016, Governments adopted CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, to stabilise net CO₂ emissions from international aviation from 2021.

CORSIA has applied to international aviation since 1 January 2019 when all airlines were required to report their CO₂ emissions on an annual basis. From 1 January 2021, international flights have become subject to offsetting obligations. Offsetting is not intended to replace efforts to reduce the sector’s carbon emissions through technology, operational and infrastructure advances. CORSIA will not make airlines strive any less to increase the use of SAF and advocate for greater production, increase fuel efficiency as well as roll out other technological developments, as part of the industry’s #FlyNetZero commitment.

CORSIA Eligible Emissions Units (EEUs) –

Unlocking EEUs is key to allow airlines to offset CO2 emissions above the established CORSIA baseline and to comply with regulatory requirements.

Under CORSIA, airlines must purchase and cancel “emissions units” to offset the increase in CO2 emissions covered by the scheme. To maximise CO2 emission reductions under CORSIA, states must offer sufficient quantities of EEUs, the carbon offset credits that meet the strict eligibility criteria defined by ICAO. At the same time, the host countries must authorise the usage of those units for the purpose of CORSIA by conducting corresponding adjustments, to ensure the EEUs are not double claimed as part of a country’s NDC under the UNFCCC Paris Agreement. Hence, there is an obligation put on airlines to purchase the EEUs, but for the countries it is optional whether to release EEUs to airlines, which leads to a scarcity of CORSIA EEUs.

Mitigating CO₂ Emissions –

The aviation sector is committed to advances in technology, operations, and infrastructure to continue to reduce its carbon emissions. Offsetting is not intended to replace these efforts. Nor would CORSIA make fuel efficiency any less of a day-to-day priority. Rather, CORSIA can help the sector achieve its climate targets in the short-and medium-term by complementing emissions reduction initiatives within the sector.

Achieving net zero CO₂ emissions by 2050 is an ambitious aspirational goal and will require both in-sector measures, including continued investment in new technologies and strong support mechanisms for the deployment of SAF, as well as out-of-sector measures, such as offsetting and carbon removals.

Offsetting is an action by a company or individual to compensate for their emissions by financing a reduction in emissions elsewhere. Offsetting and carbon markets are fundamental components of global, regional, and national emissions reduction policies. They have operated for decades for compliance purposes and voluntary emissions reductions and continue to be an effective mechanism to underpin action against climate change, especially for hard-to-abate sectors.        

Team Maverick