Introduction
International compliance with carbon emissions measures
National compliance with carbon emissions measures – or lack thereof
Comment
With the shifting priorities from short-term covid-19 measures to long term ones, concerns regarding climate change and environmental protection have come to the fore. The need for the aviation industry to consider and implement greener measures has picked up pace. Recently, the members of the Association of Asia Pacific Airlines (AAPA) declared their commitment to a net zero carbon emissions goal by 2050, thereby acknowledging the call for more focus on environmental protection measures. What is significant and perhaps ambitious about the AAPA's commitment is that its aim to achieve net zero carbon emissions exceeds the commitment made by most of the industry (including the IATA) – namely, to half carbon emissions by 2050.
Malaysia Airlines is one of the five AAPA members that have pledged to achieve carbon neutrality by 2050. At this juncture, it is worth pointing out that there is no legal obligation on the members to commit to this goal and, certainly, no legal repercussions if the goal is not realised. Nevertheless, the commitment is praiseworthy.
International compliance with carbon emissions measures
Following the International Civil Aviation Organization's resolution for a global market-based measure to address carbon emissions, the carbon offsetting and reduction scheme for international aviation (CORSIA) was implemented to stabilise carbon emissions. Through CORSIA, airlines will be required to monitor emissions on all international routes and offset emissions from routes included in the scheme by purchasing eligible emission units generated by projects that reduce emissions in other sectors(1) or use lower carbon CORSIA-eligible fuels.(2) The usage of palm oil biofuel, which Malaysia intends to use,(3) has been accepted by CORSIA.
Malaysia is a voluntary participant of CORSIA's pilot phase, which applies from 2021 to 2023. It will therefore be subjected to these measures. Given that the CORSIA scheme applies to international travel, Malaysian airline companies performing international travel will be subject to the scheme.
Malaysia's airlines may soon also have to contend with two EU developments:
- the EU emissions trading system (ETS),(4) the scope of which is currently limited to the European Economic Area, but may soon be rolled out to non-EU airlines, including those of Malaysia; and
- upcoming amendments to the EU ETS Directive to incorporate the CORSIA scheme.(5)
Precisely how Malaysia's airlines will be affected by these developments remains to be seen.
National compliance with carbon emissions measures – or lack thereof
The Malaysian legislature has yet to implement stricter green policies in relation to the civil aviation industry. There are no obligations for airline companies or related stakeholders to reduce carbon emissions or take a more sustainable approach to aviation operations. While it is commendable that individual airline companies have made a proactive effort to implement greener and sustainable measures,(6) it is a point of concern that there are no legal obligations – or repercussions, for that matter – for aviation players on implementing greener policies.
The Malaysian Aviation Commission, the economic regulator of the Malaysian civil aviation industry, has completed its proposal for a long-term strategic direction for the sector in its economic master plan, which includes fuel consumption, emission and pollution control, environmental protection and conservation, as well as sustainable consumption and production. However, this plan is yet to be implemented.
That being said, the prime minister of Malaysia recently pledged Malaysia's commitment to becoming a carbon-neutral nation as early as 2050.(7) With the much-anticipated Climate Change Act, it is hoped that Malaysia will be able to realise its objectives and honour its commitment to be a carbon-neutral nation sooner rather than later.(8)
With greater pressure building on the implementation of environmental protection measures, Malaysian airline companies will need to be on the lookout for obligations, both at home and internationally. While legislative harmonisation would be preferred, aviation players have to keep in mind that this may not be the case. Compliance will be tricky for the aviation industry due to the globalised nature of its business activities. The reality is that, at the moment, there are no legally binding obligations on Malaysian aviation players to implement greener measures. However, it is hoped that this will be only a matter of time. Jumping on the green bandwagon ahead of time will undoubtedly give businesses an attractive edge.
For further information on this topic please contact Shannon Rajan or Sandhya Saravanan at SKRINE by telephone (+603 2081 3999) or email ([email protected] or [email protected]). The SKRINE website can be accessed at www.skrine.com.
Endnotes
(1) For further information, click here.
(2) For further information, click here.
(3) For further information, click here.
(4) For further information, click here.
(5) For further information, click here.
(6) For further information, click here.
(7) For further information, click here.
(8) For further information, click here.