Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)

Background

In 2016, the 39th ICAO General Assembly reconfirmed the 2013 aspirational objective of stabilising CO2 emissions from international aviation at 2020 levels. In light of this, ICAO States adopted Resolution A39-3 which introduced a global market-based measure called the 'Carbon Offsetting and Reduction Scheme for International Aviation' (CORSIA). ICAO Assembly Resolutions are reassessed every three years, and the current Resolution A41-22 for CORSIA implementation was adopted by the 41st ICAO Assembly in 2022, following the outcome of the first CORSIA periodic review by the ICAO Council 

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CORSIA is being implemented through the associated ICAO Standards and Recommended Practices (SARPs) contained in ICAO Annex 16, Volume IV, the 1st Edition of which became applicable on 1 January 2019. In March 2023, the 2nd Edition of Volume IV was approved by the Council and became applicable 1 January 2024. There were two main sources for the 2nd Edition updates:

technical amendments arising from the 12th meeting of ICAO’s Committee on Aviation Environmental Protection (CAEP) in February 2022, and consequential amendments to reflect the outcome of the 41st ICAO Assembly in October 2022.

12th ICAO CAEP Meeting

  • Clarification on technical matters related to monitoring, reporting and verification provisions.
  • Definition of an offsetting threshold of 3 000 tonnes of offsetting requirements per 3-year compliance cycle for aeroplane operators with low levels of international aviation activity.
  • Clarification on the calculation of offsetting requirements for new aeroplane operators that do not qualify as new entrants.
  • Alignment of verification-related contents with the latest applicable editions of International Organization for Standardization (ISO) documents referenced in Annex 16, Volume IV.

41st ICAO Assembly

  • Use 2019 emissions as CORSIA’s baseline emissions for the pilot phase years in 2021-2023; and 85% of 2019 emissions after the pilot phase in 2024-2035.
  • Decision on the share of individual/sectoral growth factors: 100% sectoral growth factor until 2032; 85% sectoral / 15% individual growth factor in 2033-2035.
  • Use of 2019 emissions for the determination of the new entrant operators threshold.

 The SARPs are supported by guidance material included in the Environmental Technical Manual (Doc 9501), Volume IV and so called “Implementation Elements”, which are directly referenced in the SARPs 

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. ICAO Member States are required to amend their national regulations in line with the amended SARPs, if necessary.

 

Europe's participation in CORSIA

In line with the ‘Bratislava Declaration’ signed on 3 September 2016, and following the adoption of the CORSIA SARPs by the ICAO Council, EU Member States and the other Member States of the European Civil Aviation Conference (ECAC) notified ICAO of their intention to voluntarily participate to CORSIA offsetting from the start of the pilot phase in 2021, provided that certain conditions were met, notably on the environmental integrity of the scheme and global participation. EU member states have implemented CORSIA’s MRV provisions since 2019 and, as per the revised EU ETS Directive, are implementing CORSIA’s offsetting requirements since 2021 for routes between the European Economic Area (EEA) and States that are participating in CORSIA offsetting, as well as for flights between two such States.5 Implementation of CORSIA’s monitoring, reporting and verification rules within the EU has been through the relevant ETS Regulations 

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CORSIA scope and timeline

CORSIA operates on a route-based approach and applies to international flights, i.e. flights between two ICAO States. A route is covered by CORSIA offsetting requirements if both the State of departure and the State of destination are participating in the Scheme and is applicable to all aeroplane operators on the route (i.e. regardless of the administering State).

All aeroplane operators with international flights producing annual CO2 emissions greater than 10 000 tonnes from aeroplanes with a maximum take-off mass greater than 5 700 kg, are required to monitor, verify and report their CO2 emissions on an annual basis from 2019. The CO2 emissions reported for year 2019 represent the baseline for carbon neutral growth for CORSIA’s pilot phase (2021-2023), while for the first and second phases in 2024- 2035, the baseline is 85% of the CO2 emissions reported for year 2019. The aviation sector is required to offset any international CO2 emissions covered by CORSIA’s offsetting requirements above these baseline levels.

CORSIA includes three implementation phases. During the pilot and first phases, offsetting requirements will only be applicable to flights between States which have volunteered to participate in CORSIA offsetting. There has been a gradual increase of States volunteering to join CORSIA offsetting, rising from 88 States in 2021 to 129 in 2025 

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. The second phase applies to all ICAO Contracting States, with certain exemptions.

Due to the change in CORSIA baseline to 2019 emissions for years 2021-2023, and the fact that international aviation emissions covered by routes between two States that have volunteered to join CORSIA offsetting have not reached 2019 levels by 2023, there has not been any offsetting requirements to airlines from CORSIA during its pilot phase. 

Figure 7.4
 illustrates the reported CO2 emissions from all international flights (blue bars) and a subset of these emissions (orange bars) between States that have volunteered to join CORSIA offsetting in respective years. For years 2021-2023, CORSIA’s baseline emissions are the total CO2 emissions covered by CORSIA offsetting in 2019. This baseline emissions will be re-calculated for every given year, based on the routes covered by CORSIA offsetting requirements in that given year.

The revised EU ETS will be applied to flights within and between countries in the European Economic Area, as well as departing flights to Switzerland and to the United Kingdom, while applying CORSIA offsetting for flights to, from and between third countries that participate in CORSIA offsetting. It is estimated that the offsetting requirements for flights departing from Europe will increase from 5.2 tonnes in 2024 to 7.3 tonnes in 20266 (

Figure 7.5
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CORSIA in practice

International flights within the scope of CORSIA are attributed to an aeroplane operator, and each operator is attributed to an administrating State to which it must submit an Emissions Monitoring Plan. Since 1 January 2019, an aeroplane operator is required to report its annual CO2 emissions to the State to which it has been attributed, irrespective of whether it has offsetting obligations. As of 1 January 2021, the State calculates annual offsetting requirements for each operator that has been attributed to it by multiplying the operator’s CO2 emissions covered by CORSIA offsetting obligations with a Growth Factor. For years 2021-2032, the Growth Factor represents the percentage growth of the aviation sector’s international CO2 emissions covered by CORSIA’s offsetting requirements in a given year compared to the sector’s baseline emissions. For the period of 2033- 2035, the Growth Factor is calculated by using 85% of the sector’s growth against the baseline and 15% of individual aeroplane operator’s growth against the baseline.

At the end of each 3-year compliance period (2021-2023, 2024-2026, etc.), an aeroplane operator must meet its offsetting requirements by purchasing and cancelling certified CORSIA eligible emissions units. Each emissions unit represents a tonne of CO2 avoided or reduced. In order to safeguard the environmental integrity of offset credits used under CORSIA, the emission units must comply with the Emission Unit Criteria approved by the ICAO Council. The price of a CORSIA eligible emissions unit has varied greatly depending on the type of the project ($0.50 to $45/tCO2e during 2020-2021 with a weighted average of $3.08/tCO2eq in 2021) 

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. For the period 2024-2026, it is estimated that the cost of purchasing CORSIA offset credits could be limited at 0.07-0.15% of the total annual operating costs for airlines. Aeroplane operators can also reduce their offsetting requirements by using CORSIA Eligible Fuels (CEF) that meet the CORSIA sustainability criteria, which includes at least 10% less CO2e emissions on a life-cycle basis compared to a reference fossil fuel value of 89.1 gCO2e/MJ.

ICAO has established a Technical Advisory Body (TAB) to undertake the assessment of Emissions Unit Programmes against the approved Emissions Units Criteria, and to make annual recommendations on their use within CORSIA. To date, based on the TAB’s recommendations, the ICAO Council has approved 11 emissions unit programmes to supply CORSIA Eligible Emissions Units for CORSIA’s pilot phase in 2021-2023, and six programmes to supply Units for the first phase in 2024-2026 

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In addition to avoidance and reduction projects, removal projects that are designed to remove carbon from the atmosphere can include both natural (e.g., planting trees) and technological carbon removal processes (e.g. Direct Air Capture – DAC or Direct Air Carbon Capture and Storage – DACCS) and have a potential to produce high- quality carbon offsets in the future. Carbon capture and storage technologies can also potentially be utilized for the production of sustainable aviation fuels. The EU has put forward a carbon removal certification framework 

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, which aims to scale up carbon removal activities by empowering businesses to show their action in this field. Such certified removals can potentially become eligible in schemes such as CORSIA or when offsetting internal aviation emissions.

In order to address concerns on double counting, rules for international carbon markets under Article 6 of the Paris Agreement were adopted at the UN COP26 meeting in 2021. These rules require a host country to authorize carbon credits for ‘international mitigation purposes’, such as CORSIA, and to ensure that these emission reductions are not used to achieve its National Determined Contribution (NDC) under the UNFCCC process. These rules are designed to guarantee that corresponding adjustments take place prior to these emission reductions being used to demonstrate compliance with CORSIA. First announcements of authorizations of carbon credits for CORSIA compliance purposes have been observed in early 2024 

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What are the differences and similarities between the EU ETS and CORSIA?
The EU ETS is a cap-and-trade system, which sets a limit on the number of emissions allowances issued, and thereby constrains the total amount of emissions of the sectors covered by the system. In the EU ETS, these comprise operators of stationary installations (e.g. heat, power, industry), maritime transport operators and aircraft operators. The total sum for aviation allowances in the EU ETS is 95% of the average emissions between 2004 and 2006, adjusted for the applicability scope and reduced by the linear reduction factor annually. The total number of emissions allowances is limited and reduced over time, thereby driving operators in need of additional allowances to buy these on the market from other sectors in the system – hence ‘cap-and-trade’. This ensures that the objective of an absolute decrease of the level of CO2 emissions is met at the system level. The revised EU ETS Directive is expected to lead to emission reductions of 61% in 2030 compared to 2005 levels for the sectors covered by the Directive. The supply and demand for allowances establishes their price under the ETS, and the higher the price, the higher the incentive to reduce emissions in order to avoid having to purchase more allowances. Aircraft operators can also use Sustainable Aviation Fuels to comply with their ETS obligations. 

The ICAO CORSIA is an offsetting scheme with an objective of carbon neutral growth designed to ensure that CO2 emissions from international aviation do not exceed 2019 levels in2021-2023 and 85% of 2019 levels in 2024-2035. To that end, aeroplane operators will be required to purchase offset credits to compensate for emissions above the CORSIA baseline or use CORSIA Eligible Fuels. The observed spread of the cost of CORSIA eligible emission units has been high and dependent on the project category. 

EU ETS allowances are not accepted under CORSIA, and international offset credits, including those deemed eligible under CORSIA, are not accepted under the EU ETS as of 1 January 2021  

Both the EU ETS and CORSIA include similar Monitoring, Reporting and Verification (MRV) systems, which are aimed to ensure that the CO2 emissions information collected through the scheme is robust and reliable. The MRV system consists of three main components: first, an airline is required to draft an Emissions Monitoring Plan, which needs to be approved by a relevant Competent Authority. After the Plan has been approved, the airline will monitor its CO2 emissions either through a fuel burn monitoring method or an estimation tool. The necessary CO2 information will be compiled on an annual basis and reported from airlines to their Competent Authorities by using harmonised templates. A third-party verification of CO2 emissions information ensures that the reported data is accurate and free of errors. A verifier must be independent from the airline, follow international standards in their work and be accredited to the task by a National Accreditation Body.

 

5 As per the ETS Directive, EU ETS is being applied for flights within and between countries in the European Economic Area, as well as departing flights to Switzerland and to the United Kingdom.
6 Estimation by EASA AERO-MS model. 
7 Covers departing traffic for all airlines from EEA countries and Switzerland to third countries that participate in CORSIA offsetting, except for flights to the United Kingdom, which are covered by EU and Swiss (CH) ETS. 
 

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