(photo: ICAO)

Mon 16 Mar 2020 – ICAO’s governing Council has approved the first programmes that will provide eligible emissions units requirements in the 2021-2023 pilot phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The Council has adopted in full the recommendations of its Technical Advisory Body (TAB) that was established to assess applications from emissions unit programmes against agreed CORSIA criteria (EUC). Of the 14 applications received, six programmes have been assessed as having met the scheme’s EUC, including the UN’s CDM, with two programmes conditionally approved subject to meeting certain conditions. Two more have been invited to reapply with four others rejected either because their programmes were in the early stage of development or were not considered programmes. To reinforce CORSIA’s environmental integrity, a vintage restriction has been placed on eligible units.

“The decision is the result of a robust assessment of emissions unit programmes against a set of criteria agreed by ICAO Member States,” commented Salvatore Sciacchitano, President of the ICAO Council, which adopted the TAB’s recommendations during its current 219th Session. “It will ensure that CORSIA is both practical and robust, and represents an important environmental milestone.”

ICAO’s Deputy Director of Environment, Jane Hupe, said the Council’s approval meant the UN agency now had all the pieces in place to implement CORSIA.

“We have come a long way in a short amount of time and continue to encourage greater commitment from our from our Member States towards climate action,” she said. Cote d’Ivoire has just become the 82nd country to voluntarily join from the start of CORSIA’s pilot phase next year.

Following the TAB’s report to the Council, the six programmes approved are:

• American Carbon Registry
• China GHG Voluntary Emission Reduction Program
• Clean Development Mechanism
• Climate Action Reserve
• The Gold Standard
• Verified Carbon Standard (Verra)

The Forest Carbon Partnership Facility and Global Carbon Council will become eligible once the TAB has confirmed to the ICAO Council that updates to their respective programmes meet specific conditions. The British Columbia Offset Program and the Thailand Voluntary Emission Reduction Program have been invited to re-apply in the next round of applications, which was due to get underway this month although this has yet to be confirmed. Applications from REDD.Plus, myclimate and The State Forests of the Republic of Poland were not assessed as they did not meet EUC key elements of a programme at the time of the TAB’s assessment, while Seattle-based Nori was considered to be still at an early stage of development.

Emissions units, or carbon credits, eligible for use by airlines in CORSIA’s 2021-2023 pilot phase will be restricted to those issued from projects whose first crediting period started on 1st January 2016 and which represent emission reductions achieved on or before 31st December 2020. The adopted restrictions will be reviewed before the start of the first phase in 2024.

ICAO said it will publish a list of eligible units on its CORSIA website in due course. The TAB recommends this takes place once applicants have been notified, including any recommendations it makes related to eligibility scope, parameters and any conditions and exclusions.

“We welcome the ICAO Council decision, which allows airlines to start financing climate action projects through six high-quality programmes when offsetting requirements come into effect at the end of this year,” said Michael Gill, Executive Director of the cross-industry Air Transport Action Group.

“Importantly, the Council has reached its decision on the basis of recommendations from government experts to ensure CORSIA utilises credits that bring about sustainable, additional and verifiable emissions reductions. Assessment criteria were developed by governments, environmental groups and aviation industry partners. This important Council decision will prompt eligible programmes to start generating new projects, multiplying climate action around the world.

“CORSIA is, of course, not the only solution to aviation’s climate change challenge, but it is an important mid-term step whilst we increase efforts towards long-term solutions such as sustainable aviation fuels and radical advances in technology to start reducing overall industry emissions.”

Brussels-based NGO Carbon Market Watch (CMW) has given the ICAO decision only a lukewarm welcome, describing the vintage restriction as “better than nothing” and said it fails to exclude the possibility of “junk” credits being used by airlines.

Without the adopted restriction, several billion UN Clean Development Mechanism (CDM) credits could have been eligible, it said. With the restriction, the potential supply could be reduced to between 180-570 million credits, but still several times larger than anticipated demand over CORSIA’s pilot phase, it forecasts. Depending on the scenario used and the impact of the coronavirus outbreak on aviation emissions in 2020, CMW estimates a demand for between 44-158 million credits.

The NGO supported a vintage in which only projects that started in 2020 or later should be eligible under CORSIA.

“We have not modelled the exact volume of supply with this vintage but given the deadline for airlines to surrender units for the pilot phase is not until 2025, there is still ample time for new projects to develop,” said Gilles Dufrasne, Policy Officer at Carbon Market Watch.

“We are also convinced the CDM should not be eligible as it does not meet several of the CORSIA quality criteria. For example, it does not fully meet the additionality criteria, nor the sustainable development criteria, and it does not have adequate safeguards in place, as stated in the TAB report itself.”

He added that certain restrictions that had been imposed on voluntary programmes did not appear to have been placed on the CDM. He noted several programmes had not met the ‘additionality’ criteria and risks related to non-permanence of emissions reductions but it had been decided to recognise them anyway and give them time to “familiarise themselves” with the criteria.

“The aviation market will provide the UN’s offsetting scheme life support for another few years, but it is clear the CDM has lost all credibility and anyone who cares about supporting high-quality climate projects should steer away from it,” said Dufrasne. He believes the decision by ICAO to adopt the report will set an important precedent to inform the difficult parallel Article 6 negotiations of the Paris Agreement.

More positively, Annie Petsonk, International Counsel at the Environmental Defense Fund, said: “We applaud the ICAO Council for listening to its experts and focusing on science in its decision to adopt environmental provisions in its market-based system to reduce climate pollution from airlines. At a time of extreme stress for the industry, aviation has stood by its commitment to grapple with the climate crisis even as it deals with the immediate tragedy of Covid-19. That is a demonstration of real leadership.

“The Council’s decision sends a signal that when we get to the other side of the gut-punch that Covid-19 is delivering to families, communities and the whole travel sector, nations will move forward to meet the climate challenge. Much more work remains to be done but the decision provides one hopeful step in the right direction – and shows a path forward for the global climate talks too.”

The decision was also welcomed by the trade body representing the carbon market sector. “We’re delighted ICAO has now created the clarity airlines need in order to source emission reduction units for compliance,” said Dirk Forrister, CEO of the International Emissions Trading Association (IETA). “Investors can ramp up to begin supplying these reductions to the new market mechanism. ICAO’s focus on high quality carbon reductions will act as a strong incentive to operators of other such programmes to set the bar high when it comes to compliance instruments.”

Added IETA’s Director for Aviation, Eva Weightman: “The Council’s adherence to robust emissions unit criteria combined with the imposed restriction on historical emissions reductions brings the high environmental integrity we have been calling for.”

Maria Kolos of carbon market analysts Refinitiv said: “The ICAO Council managed to meet the deadline of approving eligibility rules for CORSIA, so ensuring clarity for the operators who will start CORSIA from the pilot phase in 2021-2023. We expect that reducing uncertainty will send a signal to airlines, which may encourage pre-compliance purchases, and as such provide additional demand for carbon credits.”

During its current session, the ICAO Council also adopted a new environmental standard aimed at reducing civil aviation impacts on local air quality and human health. Applicable to engine designs of rated thrust greater than 26.7 kN, the new non-volatile Particulate Matter (nvPM) mass and number engine transmission standard will govern both new and in-production engines from 2023 onwards.

Commenting on the adoption, Council President Sciacchitano said: “It demonstrates important sectoral leadership with the completion of the full suite of environmental technology standards for subsonic aircraft engines, and it will also ensure that only the latest and most effective nvPM reduction technologies are employed in post-2023 aircraft engine designs.”

Editor’s note: This article was updated March 17 with a response from the aviation industry to the Council decision on eligible offset programmes.

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