ICAO Expands Carbon Standards for CORSIA

Key Changes in CORSIA-Eligible Emissions Units

The International Civil Aviation Organization (ICAO) has made a landmark decision, approving four new carbon standards for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This expansion significantly increases the supply of eligible emissions units, potentially stabilizing credit prices and encouraging earlier compliance among airlines.

The newly approved standards include:

1. Gold Standard
2. Verra
3. Climate Action Reserve
4. Global Carbon Council

These additions join the existing CORSIA-eligible programs, broadening the pool of available carbon credits. Importantly, eligible units must originate from activities starting from 2016and cover emissions reductions from 2021 to2026.

Impact on the Aviation Industry

This decision by ICAO is set to have far-reaching effects on the aviation sector's sustainability efforts:

1. Increased Compliance Options: Airlines now have a wider array of choices for meeting their CORSIA obligations, potentially leading to more cost-effective solutions.
2. Market Stabilization: The expanded supply of eligible units may help stabilize credit prices, even as demand grows with the implementation of CORSIA.
3. Enhanced Market Liquidity: A larger pool of eligible credits is likely to improve liquidity in the carbon market, benefiting both buyers and sellers.
4. Earlier Adoption: The increased availability and potential price stability may encourage airlines to begin compliance efforts sooner rather than later.

Key Takeaways

1. The aviation industry now has more options for offsetting emissions under CORSIA, potentially reducing compliance costs.
2. The expanded standards may lead to increased investment in high-quality carbon reduction projects globally.
3. Airlines should reassess their procurement and investment strategies in light of these changes to optimize their CORSIA compliance approach.
4. The decision underscores the growing importance of carbon markets in achieving global climate goals, particularly in hard-to-abate sectors like aviation.

As the aviation sector continues to face pressure to reduce its environmental impact, understanding and leveraging these new standards will be crucial for airlines aiming to navigate the complex landscape of sustainable aviation.

Contact Asuene Inc. today to learn more about how we can support your journey toward a sustainable and profitable future.

Article by Euisung Lee, Asuene Global Business team. Asuene Global Business team, the global sustainability intelligence team at Asuene, acts as the guidepost through the evolving landscape of corporate sustainability. The Asuene Global Business team identifies emerging trends and regulations in decarbonization, climate policy, and broader ESG matters. This knowledge is translated into actionable insights through white papers, articles, webinars, and regular updates on our website and social media.