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Fri, Apr 19, 2019

ANALYSIS

CORSIA creates compliance complexities for aircraft owners and lessors, as well as operators | Vedder Price,Avocet,Barry Moss,Jordan Labkon
CORSIA creates compliance complexities for aircraft owners and lessors, as well as operators
Fri 5 Apr 2019 - The airline industry has generally welcomed the International Civil Aviation Organization's (ICAO) new CORSIA carbon offsetting scheme for international aviation, which went into effect on 1 January 2019. However, CORSIA's Standards and Recommended Practices (SARPs) impose an immediate compliance obligation on international airlines and raises a number of potential and unforeseen credit, political and reputational risks, not only for operators but also for aircraft owners and lessors, write Jordan Labkon and Barry Moss. It is important that owners and financiers understand the basic functions of the scheme, monitor the evolving landscape of requirements and the consequences of non-compliance, and consider implementation of risk mitigation measures in lease and loan documentation. Read more ...

CORSIA offset supply - the importance of vintage in determining scheme's cost and environmental integrity  | CDM,EUC,Refinitiv
CORSIA offset supply - the importance of vintage in determining scheme's cost and environmental integrity
Wed 3 Apr 2019 - The ICAO Council has now adopted long-awaited eligibility standards that set guidelines for what types of units airlines can use to offset their emissions growth under CORSIA. There are currently about two billion carbon offsets in circulation produced by the UN's Clean Development Mechanism (CDM), with a large proportion already used by governments and companies for compliance purposes. If the remaining units - and those to be generated by CDM projects in the future - are allowed under the aviation scheme, their volume would far surpass demand for offsets by air carriers. On the flipside, restricting the amount of CDM units eligible under CORSIA to only those with high environmental integrity would severely limit offset supply. This analysis by Refinitiv highlights a few possible offset unit supply scenarios, each reflecting potential restrictions to CDM unit eligibility on the basis of the recently elaborated offset criteria.  Read more ...