Industry welcomes ICAO adoption of global carbon offsetting scheme and looks ahead to next phase
Fri 14 Oct 2016 – Seven years after first proposing a global market-based measure as part of a strategy to address its impact on climate change, last week’s agreement by countries at the ICAO Assembly to start the CORSIA carbon offsetting scheme from 2021 is a landmark moment for the aviation industry. The carbon-neutral growth from 2020 (CNG2020) mid-term target set by industry – it has a long-term ambition to cut net emissions in half by 2050 – went too far for some important aviation countries to sign up to, and the permitted exemptions and voluntary nature of the early stages of the scheme means CNG2020 will likely be unreachable. But the international agreement is welcome relief for an industry left out of the wider climate negotiations at the UNFCCC COP21 in Paris last December and enduring criticism from some quarters for failing to adequately address its fast-growing carbon emissions.
“Negotiators in Paris had faith in ICAO to deliver an agreement for international air transport emissions tailored to the unique circumstances of our sector. That faith has truly paid off and governments have approved a scheme that will fill one of the remaining pieces of the climate change challenge,” said Michael Gill, Executive Director of the cross-industry Air Transport Action Group (ATAG).
“The historic significance of this agreement cannot be overestimated,” said Alexandre de Juniac, IATA’s new Director General, who took up his post last month. “The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is the first global scheme covering an entire industrial sector. The agreement has turned years of preparation into an effective solution for airlines to manage their carbon footprint. It ensures that the aviation industry’s economic and social contributions are matched with cutting-edge efforts on sustainability. The aviation industry understands that sustainability is critical.”
However, he acknowledged CORSIA would not be enough by itself to achieve a sustainable future and the take-up of new technology, including sustainable alternative fuels, would be required to improve the sector’s environmental performance. “We must not lose sight of the fact that the adoption of CORSIA is not aviation’s only solution,” de Juniac told a press conference after the Assembly. “The industry has a four-pillar strategy to manage carbon emissions, which includes a global market-based measure (MBM) as one of those pillars, and complemented by improvements in technology, operations and infrastructure.
“This strategy is delivering results – for example airlines are investing billions in more fuel-efficient, less noisy aircraft. We will continue to remind our partners in government of their responsibility as well in improving infrastructure, supporting the adoption of new technologies and aligning their policies with CORSIA to avoid any proliferation of aviation environmental charges and taxes.”
The agreement marked the end of the political process to implement a global MBM for aviation, he said, but added: “There is still a lot of technical work to ensure effective and efficient implementation, and to ensure the environmental integrity and administrative simplicity of the scheme.”
Now CORSIA had been agreed, the process will shift into the implementation phase, with a lot of work required on setting up a global monitoring, reporting and verification (MRV) of emissions system, the establishment of registries and a decision on the eligibility criteria for carbon offsets under the scheme. The technical groups under ICAO’s Committee on Environmental Protection (CAEP) will be resuming their work on these issues in a week’s time.
“MRV won’t be a problem as a lot of the work has already been done, as it has on emissions unit criteria (EUC),” said IATA Senior Vice President, Paul Steele. “We are though going to be pushing hard to get these agreed as quickly as possible because for us, 2020 is tomorrow and we need to know what will be required of us. We welcome the fact that ICAO is now moving this into the CAEP process so that we can get the ICAO Standards and Recommended Practices (SARPs) for both MRV and EUC moving forward and implemented relatively efficiently.
“Where there is more of a challenge is on the States’ side and getting registries in place, and this is where ICAO and industry can work closely together as well to make sure those things match together.”
Added Gill: “The requirements for MRV don’t cause great alarm because it’s work that is already taking place to comply with other regulatory regimes around the world. There is fine tuning to be done but the timetables are reasonable and the momentum that has been created at this Assembly as a result of work between industry, governments and the ICAO Secretariat will drive us ahead for successful outcomes on these issues.”
On offsets, Steele said the industry would be looking for a broad market of availability and eligibility. “We also have to be cautious and this is where we can share views with the NGOs on choosing the right type of credits,” he said. “There are credits out there that are not particularly robust, so we are happy to work with civil society within ICAO to come up with criteria which everybody can accept that will provide the airlines with a sufficient market at affordable prices and also deliver on environmental integrity. I don’t think there is much argument around that objective.”
Using ICAO estimates, de Juniac said the cost to industry of purchasing offsets during the lifetime of the scheme (2021-2035) would be between $6 billion to $22 billion – roughly up to 1% of global revenues – depending on the price of carbon. “Even though it’s a cost – and industry doesn’t like costs – it is manageable for a unique global scheme,” added Steele.
Industry expects to play a major role in building capacity amongst less developed countries and their airlines during the next phase. “We will support ICAO’s efforts to ensure the successful implementation of this scheme,” said Gill. “Collaboration by industry with ICAO and governments helped to reach the CORSIA agreement and that same spirit of collaboration is going to help in the capacity-building process.”
Steele said IATA had already made sure all its member airlines had been informed over the past few years on progress of the scheme’s design. “Now that it’s become clear and as we get details through of the MRV requirements, we will be working closely with them to make sure they know what’s expected and we will support them in doing that. We also have a lot of experience of working with our members on their voluntary carbon offsetting schemes. If ICAO needs assistance in working with governments in the way we did with the Global Aviation Dialogues, we would be happy to support ICAO in that process as well.”
On airline passenger voluntary offset programmes, de Juniac said it was too early to predict what would happen to them once the CORSIA scheme started but he thought they would “fade away” over time.
In the shorter term, he said IATA would be encouraging more States to join the voluntary phases of the scheme. The 65 countries that had volunteered by the end of the Assembly, which IATA estimates will be enough to cover over 80% of the total growth in international aviation emissions after 2020, has grown to 66 with the addition to the list of Zambia, a landlocked developing country that would be entitled to a permanent exemption from participating under CORSIA.
“Despite some reservations over the scheme being voluntary in its initial years, the support of all these States – large, small, developed and developing – shows the commitment of the international community working through ICAO to deliver a robust measure,” said de Juniac.
More industry reaction to the A39 resolution and the CORSIA approval (click on links for full statements):
Airlines for America (A4A): “We thank the United States government for its steadfast commitment to building global consensus for this groundbreaking agreement and we remain committed to working collaboratively with all stakeholders to further build on our already strong environmental record,” said A4A CEO Nicholas Calio. A4A VP Environmental Affairs Nancy Young said the importance of achieving a single, global market-based measure prevented countries from imposing unilateral measures on international aviation, such as the European Union’s Emissions Trading Scheme (EU ETS). “We applaud ICAO and its member nations from around the world for reaching a global agreement to address climate change in support of our commitment to achieving carbon neutral growth in international aviation from 2020,” she said. “Having a single, globally agreed market-based measure for international aviation ensures its role as a complement to our considerable technology, sustainable alternative aviation fuels, operations and infrastructure initiatives, sending a clear message that airlines will remain a green engine of economic growth into the future.”
Airlines for Europe (A4E): “European airlines, the aviation industry, other stakeholders as well as European institutions have been consistently advocating a global solution for many years. Following the ICAO agreement, there is now an opportunity to have a fresh look at environmental regulation in the European context and to review existing measures addressing CO2 emissions from aviation,” said A4E Managing Director Thomas Reynaert. “A4E supports that the global system will apply equally to operators and that a majority of routes will be included from the start. This will reduce any potential competitive distortion which is important in order to preserve the competitiveness of European carriers and to avoid adverse financial and political implications. We are ready to assist the EU in preparing an effective transition mechanism to ensure that airlines can comply with the global scheme and that they will be better aligned with other international airlines in their efforts to address carbon emissions.”
Airports Council International (ACI)World: “This historic climate agreement follows last week’s ACI Resolution supporting CORSIA as the global market-based measure for international aviation; and the signing of a Memorandum of Understanding between ACI and ICAO for enhanced cooperation on environmental related initiatives,” said Director General Angela Gittens. “With these commitments, the priority now is collaboration to provide capacity building, and coordination, so that we can work together to deliver the right assistance in the right place and at the right time.”
Association of Asia Pacific Airlines (AAPA): “We commend the States who have demonstrated leadership by their commitment to be a part of the voluntary stage of CORSIA when it plans to start in 2020. We look to other States to follow this lead and declare their voluntary participation,” said Director General Andrew Herdman, who was a member of the cross-industry delegation at the Assembly. “Although a great deal of work has gone into achieving this outcome, further challenges lie ahead in ensuring the scheme is implemented effectively by governments around the world. Industry is committed to supporting ICAO in completing the technical work ahead which will provide the metrics, methodology and guidance needed to ensure a robust implementation framework. Implementation of CORSIA will be critically important in reaching the more ambitious goal of carbon neutral growth from 2020. In the Asia Pacific region, which is already the world’s largest aviation market, airlines have made significant fleet investments in the latest technology that will offer CO2 emission reductions. Governments in the region also have an important role to play in ensuring the necessary aviation infrastructure keeps pace with the expected growth in demand, whilst improving operational efficiencies and reducing environmental impacts.”
British Airways: “Industry cannot possibly make a worldwide impact on CO2 emissions without international political support, so I was delighted the ICAO meeting approved the global carbon offsetting programme,” said CEO Alex Cruz at the British Air Transport Association’s annual lecture yesterday. “This is really a historic decision in aviation, the first time countries from around the world have agreed a common approach for dealing with emissions for a specific industrial sector. It is a great step and reflects the great deal of patient work behind the scenes that included a number of European aviation players, including BA and IAG over the last six years.”
Civil Air Navigation Services Organisation (CANSO): “CANSO and its members across the air traffic management industry welcome the decision by States to put in place a carbon offsetting scheme for global aviation,” said Director General Jeff Poole. “This marks a major milestone towards the fulfilment of the fourth pillar of aviation’s four-pillar strategy to reduce its emissions. CANSO and its Members will continue to focus on pillar two – improving the efficiency of aircraft operations – and pillar three – improving aviation infrastructure. The air traffic management industry is helping to implement pillar two through procedures that enable aircraft to fly shorter, optimum routes and take-off and land with smoother trajectories, thus reducing emissions. For pillar three, we are working with States to modernise and upgrade the air traffic management system to increase capacity and reduce delays, thus ensuring a smoother experience for passengers, increasing efficiency and enabling greater connectivity and access to markets to boost GDP growth for States.”
European Regions Airline Association (ERA): “After several years of hard work, ICAO Member States have agreed a landmark agreement on international aviation emissions and they are to be congratulated on that,” said Director General Simon McNamara. “It is something that the industry, including ERA, has been supporting. We are now looking at the detail of the agreement to understand its implications on the future of the EU ETS for aviation, and will be discussing the matter with our members at our AGM on 13 October, where we will be releasing a detailed position with our views on the future of the EU ETS for aviation.”
International Air Carrier Association (IACA): “IACA underlines that this agreed global framework offers a better alternative compared to a potentially complex patchwork of regional and national systems,” it said. “IACA is confident the European Commission will recognise the high level ambition of CORSIA, and will propose that it replaces the EU ETS.”
International Business Aviation Council (IBAC): “The framework agreed at ICAO will help us meet our collective industry commitments while also taking into account the needs of small operators,” said Director General Kurt Edwards. “Importantly, the global framework means we will avoid a patchwork of multiple measures around the world.” IBAC said its experts would continue to represent the interests of business aircraft operators in the technical work to establish SARPs under CORSIA, “with a view to ensuring administrative simplicity for those operators that participate in the scheme.” It pointed out the ICAO resolution provides for exemptions for operators that emit annually fewer than 10,000 tonnes of CO2 in international flights and for aircraft under 5,700kg MTOW.
International Coordinating Council of Aerospace Industries Associations (ICCAIA): “This is a significant year for the global aviation community. The agreement on CO2 standards for aircraft, coupled with the international carbon offset plan illustrates we take our environmental responsibility seriously,” said Chairman David Melcher, who is also CEO of the Aerospace Industries Association. “While CORSIA and the CO2 emissions standards are important milestones, we must not forget the importance of continuing to reduce our impact on the environment in other areas which support these goals.”
Latin American and Caribbean Air Transport Association (ALTA): “This is another key step as part of an overall comprehensive plan in addressing the industry’s contribution to the environment and climate change that should be celebrated,” said Executive Director Eduardo Iglesias. “Airlines in the Latin America and Caribbean region have made great strides on the technological front, including renewing their fleet. CORSIA supplements the industry’s full-spectrum of initiatives and measures to reduce CO2 emissions, which also includes technological, operational, infrastructure, as well as sustainable alternative fuels. As we focus on the next step of effectively implementing CORSIA, we call on governments to join us in a united effort and to do their part investing in the necessary infrastructure and setting the right framework to develop sustainable alternative fuels in the region. ALTA and our members remain readily available to collaborate with governments in the implementation of all measures to reduce aviation’s carbon footprint in the region, including CORSIA.”
Sustainable Aviation: The UK industry coalition group congratulated “the leading role its members and the UK Government have played in the negotiations, helping to secure international agreement to the principles of a scheme and to shape its design.” It added: “Work to prepare for the scheme’s implementation is already underway. SA members will continue to work with the UK Government and ICAO on the detailed design elements to ensure the environmental integrity of chosen emissions units and develop robust rules for monitoring, reporting and verification. SA will review the impact of this new scheme on its forecasts published in the Sustainable Aviation Carbon Roadmap. The Roadmap shows that UK aviation can decouple growth in travel from growth in emissions to keep absolute emissions at around 2005 levels by 2050. This ICAO scheme will allow the UK industry to go further, meeting the industry goal of halving net emissions in 2050 compared to 2005 levels. SA fully welcomes this landmark agreement as a major milestone, putting the industry firmly on course to meet its ambitious climate goals.”
Virgin Atlantic: “The successful outcome at the ICAO Assembly is great news,” said Meigan Terry, SVP External Affairs. “It’s a significant step forwards in enabling the global aviation industry to deliver on the challenging targets it has already committed to meeting. Virgin Atlantic has long supported a global carbon deal for aviation, as one of the 2008 founding member airlines of a small industry group called Aviation Global Deal.”