191 states attending the International Civil Aviation Organization (ICAO) Assembly in October in Montreal reached a landmark agreement to curb the carbon emissions associated with commercial aviation. The Carbon Offset and Reduction Scheme for International Aviation (CORSIA), aims to offset emissions in an attempt to achieve carbon-neutral growth by 2020, regulating emissions at an international level.
This is not the first attempt to regulate airline emissions on a multijurisdictional scale; the European Union (EU) currently regulates intra-community flights through the EU Emissions Trading Scheme (EU ETS). When the Kyoto agreement was signed in 1997, the ICAO, an agency of the United Nations, was tasked with devising a global scheme to combat aviation emissions. After difficulty in agreeing a global deal, the European Commission took steps to implement its own regime. The Commission extended the EU ETS in 2008 to include the aviation sector, which came into force in 2012.
The scheme originally applied to all flights which depart from or arrive in the territory of a Member State. After widespread criticism from international carriers, including legal challenges by US airlines (albeit unsuccessfully), the EU agreed to temporarily halt the application of the scheme to international flights that fly in and out of the European Union. Until 31 December 2016, the scheme currently applies to flights that operate within the European Economic Area (EU plus Iceland, Lichtenstein and Norway) only.
With aviation emissions forecast to triple by 2050, governments, airlines and environmentalists have recognised the need for a consistent approach. Using the momentum of the Paris Agreement, the ICAO has seized the opportunity to agree on a global market-based measure for international aviation.
From 2020 airline operators will have to offset any emissions growth by funding carbon-reducing activities and renewable energy projects instead of introducing a capbased system such as the EU ETS or imposing a carbon tax. CORSIA aims to offset around 80% of global airline carbon dioxide emissions above 2020 levels until 2035.
CORSIA allows a phased introduction; a pilot phase between 2021-2023 where countries will have to opt in voluntarily, a first phase from 2024 2026 with voluntary participation and a mandatory phase from 2027. It is was originally anticipated that over sixty-five countries, including the US and China and all EU member states, will sign up at the outset in 2021. US involvement may now depend on whether President Trump wins a second term in office, given his stated hostility to international action on climate change. CORSIA also takes into account and alleviates concerns for developing countries and those with low levels of aviation activity as they are exempt from the scheme, however, they are encouraged to participate where possible.
For operators that do not operate flights inside the EU, CORSIA will be a significant change as they begin to start monitoring their emissions levels against regulatory standards. However, as emission levels will be calculated based on 2019-2020 averages, it allows those operators to increase their emissions levels over the next 4 years (assuming they opt into the voluntary phase). Those countries that do not opt-in have additional time to increase their emission levels and prepare for any obligations imposed before the scheme becomes mandatory in 2027. All operators will have to put sufficient plans in place to be in a position to comply with their obligations, irrespective of when they join the scheme.
Operators currently operating within the European Economic Area are already conscious of their emissions levels and may therefore be in a better position to prepare for any changes that the CORSIA imposes. In addition, it must be noted that the CORSIA only applies to international flights (which accounts for only 60% of aviation emissions) and therefore leaves substantial gaps for the EU and individual nations to provide appropriate measures for domestic flights. The European Commission is due to present a report to the European Parliament and Council by the end of the year on the new agreement in the context of its impact on the ETS. ICAO will now spend over two years finalising the technical details of the CORSIA to ensure efficient and effective implementation.
The UK government recently approved a third runway at Heathrow to expand UK airport capacity, subject to public consultation and a vote by parliament, intended to take place in the winter of 2017-18. The Government will have to ensure that it makes significant carbon reductions in other sectors to allow for growth in aviation emissions while still meeting obligations under the climate change act.