As the aircraft taxied down the runway, Meera gripped the armrest, her heart hammering. Then, with a surge of power and a deafening roar, they were airborne. The plush airplane seat felt impossibly luxurious under her, as she saw the world shrinking into a miniature landscape of toy cars and blocky buildings through the airplane window. This was it. Her first flight. A ticket to a world beyond the dusty roads and familiar cornfields of her hometown. This story of Meera is the story of hundreds of thousands more belonging to the up-and-coming aspirational class across the world, who are going to take their first flights in coming years.
A shiny, fast, and classy mode of transportation that existed only in glossy magazines and flickering TV screens, beyond crowded trains and buses on potholes-ridden roads; it is their turn now. A chance to chase the dream their parents instilled in them and being pushed by the governments – to rise above their circumstances. This heartwarming story, however, brings with it another concerning reality.
As Meera flies for the first time with big dreams in her eyes, back home, her family farm’s crops might be destroyed in an extreme weather event caused by the adverse impact of climate change. One passenger on a Boeing 747 is responsible for equivalent of 90 kg of carbon dioxide emission per hour of flying. This means that if you are flying from Mumbai to New York, you alone would be responsible for more than two tonnes of CO2. All this is beyond the emissions from maintenance of the whole system (e.g., airports, vehicles, etc)
Flying is one of the most carbon-intensive activities, yet it accounts for only 2.5% of global carbon emissions, because almost 90% people in the world do not fly in a given year. However, as incomes surge, this is expected to change.
Between 1990 and 2019, passenger and freight demand quadrupled, with passengers traveling over 8 trillion kilometers in 2019. During this time, flying became more than twice as energy efficient, dropping from 2.9 megajoules per passenger-kilometer in 1990 to 1.3 MJ in 2019. This improvement is due to better design, technology, larger planes, and fewer empty seats. However, the carbon intensity of aviation fuel has remained unchanged, with standard jet fuel still being used, and biofuels and other alternatives comprising only a tiny fraction of global demand.
As air travel continues to grow, these emissions are projected to triple by 2050 if no action is taken. To combat this, the aviation sector has been exploring various strategies, including the use of aviation carbon credits.
A carbon credit is a tradable intangible instrument issued by a carbon-credit program, representing a greenhouse gas (GHG) emission reduction or removal equivalent to one metric ton of carbon dioxide. This is calculated by comparing emissions from a baseline scenario to a project scenario.
In the context of aviation, carbon credits offset the emissions produced by flights. Airlines purchase these credits to compensate for their CO2 emissions, supporting projects that reduce or remove equivalent amounts of greenhouse gases. This practice helps the aviation industry manage its carbon footprint and contributes to global climate goals.
CORSIA: Carbon Offsetting and Reduction Scheme for International Aviation
The International Civil Aviation Organization (ICAO) introduced CORSIA to stabilize CO2 emissions from international aviation at 2020 levels. Under CORSIA, airlines are required to offset any emissions growth above this baseline. To be CORSIA-approved, credits must meet certain high standards. They ensure the project are not taking emission reduction (avoidance or absorption) benefits of already existing systems and these projects generating credits for CORSIA, must be new at avoiding emissions (it is referred to as the principle of additionality). These criteria ensure that the emissions reductions are real, measurable, and verifiable, and that the projects generating the credits provide benefits beyond what would have occurred in the absence of the project.
Meanwhile, the emissions saved must be real, irreversible, and lasting (referred to as permanence), and the project overall benefits the environment (environmental integrity). Think planting new forests, capturing methane from landfills, or installing solar panels among the examples of such projects. Only that they have to go through more rigorous monitoring, reporting, and verification.
By buying these credits, airlines essentially invest in these projects, offsetting their CO2 emissions. This helps keep overall aviation emissions from skyrocketing beyond a set limit. It’s a way for the industry to take responsibility while cleaner technologies like electric planes are developed.
As the name states, think of this as a trial run. Participation by countries (states) was entirely voluntary here. Airlines operating in those participating countries could choose to offset their CO2 emissions exceeding a baseline level.
This phase continues the voluntary approach, but with an increased push for more countries to get involved. There might be incentives or diplomatic efforts to encourage broader participation. Airlines in participating countries still have the option to offset their emissions beyond the baseline.
Here’s where things get serious. Participation will become mandatory for all countries except for a few that meet specific exemption criteria (e.g., developing countries with very low aviation activity). This is the enforcement stage where CORSIA becomes a global program for offsetting emissions from international aviation. Airlines operating in these mandatory participation countries will be required to offset their CO2 emissions exceeding the baseline.
Apart from CORSIA, the EU ETS covers all flights within the European Economic Area (EEA). Airlines must monitor their emissions and surrender an equivalent number of allowances annually. This system encourages airlines to reduce emissions and invest in cleaner technologies.
Carbon trading involves buying and selling carbon credits in various markets, which can be either compliance-based, such as those under CORSIA and EU ETS, or voluntary, where companies seek to meet their own sustainability goals. There are primary and secondary markets for this, which evolve from developers to those looking to offset.
Key Carbon Exchanges for Aviation include the IATA Aviation Carbon Exchange (ACE) – A platform by the International Air Transport Association (IATA) for airlines to trade carbon credits, ensuring access to high-quality credits. Another is the European Energy Exchange (EEX) that facilitates the trading of EU Emission Allowances (EUAs), supporting the aviation sector within the EU ETS framework.
Carbon footprints are a concern for airlines and carbon credits offer a brilliant potential solution. Airlines can purchase credits from projects that reduce emissions elsewhere, like planting trees in the Amazon or building wind farms in India. These projects help offset the CO2 airlines produce, contributing to a more sustainable future for aviation.
For airlines, carbon credits offer a cost-effective way to manage their environmental impact. However, challenges remain. Carbon credit prices can fluctuate, and ensuring the projects they support deliver real emission reductions requires robust verification systems. Additionally, different regulations across regions can make the global carbon market complex.
Despite these challenges, the future of aviation carbon credits looks promising. Technological advancements like blockchain and big data hold the potential to improve transparency and verification of both emissions and offset projects. International cooperation on policy development will also be crucial for creating a unified and effective carbon market.
The aviation industry’s commitment to achieving net-zero emissions by 2050 will further drive the demand for carbon credits. Airlines will need to invest in cleaner technologies, sustainable aviation fuels, and robust offset projects to reach their ambitious goals.
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