Explainer: How the aviation industry's carbon offsetting scheme will work

MONTREAL (Reuters) - International airlines are counting on a global carbon offsetting plan to cap CO2 emissions from air travel at 2020 levels, mitigating the environmental impact of flying even as passenger traffic is forecast to grow.

The plan, known as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), is the first of its kind for a single industry in response to climate change.

Aviation leaders will discuss the program at the International Civil Aviation Organization (ICAO)’s triennial assembly which starts on Tuesday in Montreal amid rising pressure from climate activists led by Swedish teenager Greta Thunberg.


CORSIA was established by ICAO, the U.N. body that sets standards for international air travel, in 2016 and is due to start in 2021.

To achieve carbon-neutral growth after 2020, despite rising traffic, participating commercial airlines aim to use more fuel-efficient aircraft, find more direct flight paths by improved air traffic control and substitute conventional fuel with more sustainable biofuels.

But since biofuels are costly compared with jet kerosene and in limited supply, airlines are expected to largely offset their rising emissions by purchasing carbon credits from designated environmental projects around the world.

The medium-term deal is expected to provide more than $40 billion in funding for climate projects, and offset 2.6 billion tonnes of C02 emissions between 2021 and 2035.

Airlines from 80 countries representing 77% of international air traffic have joined the deal’s voluntary first phase between 2021 and 2026. It becomes mandatory from 2027 for states with large aviation industries.

The United States has voluntarily joined CORSIA, despite withdrawing from the 2015 Paris Agreement on climate change.

In 2018, China was no longer listed as a participant in the first phase, raising concern that the world’s fastest-growing aviation country isn’t part of the deal.


According to ICAO data, the deal is expected to cost airlines between $5.3 billion and $23.9 billion, depending on the future price of units in the carbon market.

Airlines largely support CORSIA to avoid countries creating their own regional schemes. But some European countries, where there is a growing backlash against air travel spurred by a Swedish-born boycott called “flight shame”, are already considering a separate aviation carbon tax.

Some environmentalists say they would support CORSIA as long as it includes safeguards to ensure, for example, that airlines can only buy emission credits from credible projects. But most are calling for ICAO to set separate long-term targets for reducing emissions, which are not specified in CORSIA.


Commercial flying currently accounts for about 2% of global carbon emissions and about 12% of transport emissions, according to data cited by the Air Transport Action Group (ATAG).

By 2020, emissions from global international aviation are projected to be about 70% higher than in 2005 due to rising travel demand. Passenger numbers are forecast to double to 8.2 billion between 2017 and 2037, according to IATA.

Studies, including reports by the International Council of Clean Transportation (ICCT), have shown planes are less energy efficient on short trips than buses or trains.

According to the European Commission, a return flight between London and New York generates roughly the same level of emissions as heating a European home for a whole year.

Reporting By Allison Lampert in Montreal; additional reporting by Tracy Rucinski in Chicago; editing by Darren Schuettler