International Aviation

The International Civil Aviation Organization (ICAO), the UN agency responsible for regulating international aviation, has set a goal of “carbon neutral growth from 2020”. The CORSIA scheme it has set up to achieve this is unlikely to do so: it will probably cover less than half of international aviation emissions between now and 2035, and is likely to allow compensation without real emission reductions elsewhere. We rate the international aviation sector’s carbon neutral growth goal as ‘critically insufficient’.

In 2013, ICAO adopted the aspirational goal of ‘carbon neutral growth from 2020’. This means that net CO₂ emissions are to remain constant on a net basis compared to a baseline (more on setting that baseline below). In 2016, the ICAO established the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a global, market-based measure, which is expected to be the main international instrument to achieve the carbon neutral goal.

CORSIA has significant shortcomings, meaning that the scheme is highly unlikely to deliver the substantial reductions needed to achieve ICAO’s aspirational goal. For example, China, Brazil, India and Russia have expressed reservations about critical aspects of CORSIA and will likely not participate in the scheme’s pilot phase of 2021-23.

Assuming these countries will also not participate in later phases, CORSIA is likely to cover less than 50% of international aviation CO₂ emissions in the period 2021-2035. There are also concerns about the quality of emissions offset units allowed to be used within CORSIA and over the low decarbonisation potential of alternative fuels that airlines can use under CORSIA. Critically, CORSIA does not provide the required incentives for the industry to invest in mitigation technologies that can ultimately result in the required complete decarbonisation of the sector.

The emissions effectiveness of the CORSIA scheme has been further threatened by a move by the industry to make its baseline year 2019, just ahead of emissions plummeting during the COVID-19 crisis, along with question marks over the quality of emissions units and alternative fuels. We expect that international aviation CO₂ emissions in 2020 will be 45% to 60% lower than in 2019. However, the CAT projects that these emissions will double - and possibly almost triple - between 2015-2050. The near-term drop in emissions due to the COVID-19 outbreak does not alter this trajectory in any meaningful way

In recent years, international aviation emitted about 600 MtCO₂ annually, or 1.2% of global GHG emissions. The sector’s share of global emissions is expected to increase in the future – both because other sectors will decarbonise and because demand for international aviation is expected to grow, even after taking into account the near-term adverse impact of the COVID-19 pandemic on travel.

The CAT’s current policy projections show that emissions from international aviation may increase by 220-290% between 2015 and 2050, as compared to a 230-310% projected increase pre-COVID-19. The larger the increase in CO₂ emissions, the more difficult it will be for international aviation to achieve its goal of carbon neutral growth.

The baseline for CORSIA, which is expected to be the main instrument to achieve climate neutral growth, is currently set at a level of the average aviation emissions in 2019-2020. But as a result of COVID-19, 2020 emissions will be substantially lower than previously anticipated, resulting in a lower baseline. Near-term emissions will also be lower than previously expected, so depending on the speed of the recovery, the offsetting obligations that airlines face are not likely to change substantially. However, the aviation industry has asked ICAO to revise the rules for the baseline and take 2019 as the only reference year, a move that would remove most, if not all, offsetting obligations under CORSIA’s pilot and first phase and substantially weaken CORSIA even further. Member States of the European Union support this change of baseline rules.

The CAT rates the target of carbon neutral growth from 2020 as ‘critically insufficient’. At the time of writing this assessment, it is uncertain what decision ICAO will take regarding CORSIA’s baseline. We have therefore taken a range for the target of carbon neutral growth. Emissions in 2019 form the upper bound and average emissions in 2019 and 2020 the lower bound – assuming that 2020 emissions are 60% below emissions in 2019. The upper end of that range alone would be rated ‘highly insufficient’, but we have downgraded the rating to ‘critically insufficient’ as CORSIA has significant shortcomings and is unlikely to deliver this goal.

ICAO Member States have the potential to strengthen the sector’s emission target by retaining the original methodology agreed to establish its baseline and move closer to Paris compatibility; however further work is needed to set a Paris-compatible target, fix the shortcomings of CORSIA and incentivise the decarbonisation of the sector through sustainable fuels, energy efficiency improvements and demand management.

The ICAO envisages that the carbon neutral growth goal will be met through a basket of measures, including improvements in the technology and operational aspects of aircraft, alternative jet fuel, and the use of CORSIA.

ICAO Member States expect CORSIA to play a major role in addressing any increase of CO₂ emissions above the goal’s baseline. Under the scheme, aircraft operators can compensate for any increase in aggregate CO₂ emissions on routes that are covered by the scheme through the purchase and retirement of emission units, which to be effective would need to derive from real, additional and permanent emission reductions or removals elsewhere. Alternatively, aircraft operators may use ‘CORSIA eligible fuels’, which are defined as lower carbon or sustainable aviation fuels that meet the CORSIA sustainability criteria (ICAO, 2019a).

For CORSIA to deliver on the ICAO carbon neutral growth goal, it is crucial that all countries participate; that alternative fuels used to comply with the scheme deliver substantial emission reductions; and that the emissions units that airlines purchase and cancel represent real, additional and permanent emissions reductions elsewhere. It is, however, doubtful whether any of these conditions will be met. As noted above, CORSIA is likely to cover less than 50% of international aviation CO₂ emissions in the period 2021-2035. Also, the programmes generating emissions units eligible under CORSIA’s pilot phase (2021-2023) are heterogenous and inconsistent in how they meet the environmental integrity criteria approved by the national representatives on the ICAO Council.

The rules for what constitute CORSIA-eligible fuels are also weak. For instance, the rules require fuels that deliver at least a 10% emissions reduction compared to standard aviation fuels, which - depending on further rulemaking - could potentially allow for a wide range of fossil fuels to be used as ‘CORSIA eligible fuels’. Although rules for the lifecycle emissions of fuels could lead to a reduction of the carbon intensity of a share of the fuel used, they alone are unlikely to steer the sector towards the use of zero carbon synthetic fuels which need to be scaled up in order to reach the Paris Agreement goals.