The International Air Transport Association (IATA) marked the tenth anniversary of the International Civil Aviation Organization (ICAO) assembly resolution to establish the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) with a call to governments to reinforce the foundations of this landmark step in aviation’s decarbonization.
Adopted at the 2016 ICAO Assembly, CORSIA established the first global market-based measure for an industrial sector and was an important follow-up to the Paris Agreement a year earlier.
Today, more than 130 countries participate in CORSIA, and by the end of this year, the scheme is expected to have mitigated approximately 200 million tonnes of CO2. From 2027, it is estimated CORSIA will cover approximately 85% of global emissions. Through to the end of the scheme, up to $120 billion could be mobilized in climate finance to support emissions reduction and carbon removal projects globally.
“As the first global, sector-wide climate agreement for aviation, CORSIA showcases the best of international collaboration: a global solution to a global challenge. It preserves a level playing field for aviation while channeling climate finance to support emissions reductions around the world. And in a world increasingly characterized by fragmentation, that is a powerful reminder of what can be achieved when states work together. CORSIA is already a landmark achievement. With broad participation, consistent implementation, and continued support from governments, it can become one of the most successful examples of climate action and climate finance in practice,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.
EU ETS Revision:
The tenth anniversary coincides with the European Union’s review of the EU Emissions Trading System (EU ETS). The EU is considering proposals that would extend the EU ETS to destinations within 5,000km of the EU (using Frankfurt as its geographic center) and create a mechanism through which comparable carbon-pricing systems could be developed with third countries.
“The EU ETS review should reinforce CORSIA as the global framework for international aviation, not encourage overlapping regional or bilateral systems. Europe will achieve more for climate action and its own competitiveness by directing aviation revenues towards Sustainable Aviation Fuels, infrastructure and emerging technologies than by adding carbon costs that do not address the sector’s underlying energy constraints,” said Thomas Reynaert, IATA’s Senior Vice President External Affairs.
The lack of an impact assessment on widening the scope of EU ETS does not provide a clear overview on the potential effects on third countries, international connectivity, competitiveness, and the functioning of CORSIA, despite IATA’s estimate that the proposed scope expansion would increase EU ETS compliance costs by 40% to EUR280 billion over the 2027-2040 period.
To accelerate aviation decarbonization while supporting the EU’s competitiveness, resilience, and long-term energy security, the EU ETS review should:
- Reinforce CORSIA by:
- Ensuring the full and unified implementation of CORSIA for international aviation, without extending the EU ETS extra-territorially; and
- Removing the proposed “EU ETS as a Service” mechanism, which would encourage parallel regional or bilateral carbon-pricing systems alongside CORSIA.
- Support Sustainable Aviation Fuel (SAF) production by:
- Strengthening the SAF allowances mechanism, with greater support available immediately and not only from 2029;
- Eliminating geographic production restrictions and additional conditions that limit support for sustainability-compliant SAF pathways.
- Strengthen Europe’s competitiveness by:
- Ringfencing aviation-generated ETS revenues for SAF production, infrastructure and emerging aviation technologies.
The recommendations outlined in IATA’s revised analysis have been shared with European policymakers as part of the ongoing legislative process. Further details are available in IATA’s updated position to the EU ETS review.
