Avoiding Pitfalls in CORSIA Carbon Offset Procurement: A Guide for Businesses and Airlines

Avoiding Pitfalls in CORSIA Carbon Offset Procurement: A Guide for Businesses and Airlines

Flying stands out as one of the most carbon-intensive activities, despite being regularly undertaken by less than 10% of the global population, contributing merely 2.5% to the world’s carbon emissions. However, with rising incomes, this scenario is poised to change, leading to an increase in aviation emissions even more. We do not need to include various data points and recent incidents for you to know the severity of the accelerated climate change problem caused by intense emissions.

This shift in aviation emissions is attributed to a combination of heightened demand for air travel and advancements in technology over the past fifty years. Total CO2 emissions in aviation are often assessed through the “Kaya identity,” which factors in population size, income levels, energy efficiency of economies, and the carbon intensity of energy sources. The surge in air travel is evidenced by passengers covering over 8 trillion kilometers in 2019 alone, equivalent to the distance of a light year.

This is why CORSIA, or the Carbon Offsetting and Reduction Scheme for International Aviation, was introduced to address the environmental impact of greenhouse gas emissions from international aviation. It was developed as part of the International Civil Aviation Organization’s (ICAO) efforts to mitigate aviation’s contribution to climate change. CORSIA aims to achieve carbon-neutral growth in international aviation from 2020 onwards by ensuring that airlines offset their emissions through carbon offsetting projects. The scheme was introduced to promote sustainability and reduce the aviation industry’s carbon footprint in alignment with global climate goals.

Importance of Sustainability Reporting

The global sustainability agenda, epitomized by the United Nations Sustainability Development Goals (UN SDGs), calls for concerted efforts to eradicate poverty, safeguard the environment, and ensure universal prosperity. Aviation, as a pivotal global transport sector, plays a crucial role in advancing these objectives by rearing connectivity, trade, tourism, and disaster relief. However, aviation faces sustainability challenges, including its inherent environmental impact and the management of noise and waste.

To address these challenges, airlines have to embrace sustainability reporting to demonstrate their commitment to environmental, social, and economic responsibility. Sustainability reporting enables airlines to monitor progress, mitigate risks, build trust with stakeholders, and drive concrete actions towards sustainability goals. Moreover, it enhances corporate reputation, attracts talent, and aligns with consumer preferences for environmentally responsible businesses. Despite the benefits, sustainability reporting entails challenges such as the fragmentation of reporting frameworks and the need for clear guidance on metrics selection.

Airlines face challenges in sustainability reporting due to global operations. Complexity arises from various reporting obligations and resource-intensive compliance with multiple standards, especially for smaller carriers. Inconsistencies in reported data result from differing frameworks. Efforts like the ISSB aim to establish global standards, aligning with existing frameworks like TCFD. However, industry-specific guidance is crucial for the aviation sector to address challenges effectively. Despite positive developments, greater cooperation and alignment efforts are needed to ensure consistent and industry-specific sustainability reporting guidelines.

Common Roadmap to Airline Sustainability

Phase 1: Reduce & Optimize

Enhance operational efficiency with fuel-saving strategies, modernize fleet with eco-friendly aircraft, gradually adopt Sustainable Aviation Fuel, offer carbon offset programs for passengers, and implement waste reduction initiatives both in airports and on flights.

Phase 2: Collaborate & Innovate

Collaborate with service providers like EKI, fuel producers, research institutions, etc to advance clean energy solutions and offsetting. Advocate for sustainable aviation infrastructure investments and support policy initiatives incentivizing eco-friendly practices. Educate passengers on flight emissions and the airline’s sustainability endeavors to foster environmental consciousness.

Phase 3: Transformation & Disruption

Embrace innovative technologies such as electric and hydrogen-powered aircraft to reduce reliance on fossil fuels. Aim for carbon-neutral operations through sustainable aviation fuel, carbon capture, and offsetting residual emissions. Partner with travel firms to promote eco-tourism and responsible travel. Implement circular economy principles by upcycling and reusing materials in aircraft maintenance and operations for a more sustainable aviation industry.

Continuous Monitoring and Reporting

Robust monitoring and transparent reporting are crucial. Airlines should actively track their environmental performance metrics and communicate progress regularly to stakeholders (passengers, investors, regulators), either themselves or through hired expert services.

CORSIA Readiness, Decarbonisation and Scope 3 Solutions

Airlines face a reporting gap and CORSIA compliance challenge due to limited technical expertise and standardized frameworks. Investing in internal capacity for transparency is vital, tracking carbon emissions, waste generation, and fuel efficiency. Embracing global reporting standards like GRI and understanding CORSIA regulations enhances stakeholder trust and ensures compliance with international standards.

Airlines can surpass CORSIA targets by setting ambitious decarbonization goals. Investing in innovative technologies like carbon capture and new biofuels aligns with CORSIA and accelerates decarbonization. Collaboration with research institutions and clean energy startups ensures solutions meet CORSIA eligibility criteria for carbon offsets in the Indian context.

To address Scope 3 emissions, airlines are offering zero-carbon ticketing options, allowing passengers to offset flight emissions with CORSIA-compliant SAF purchases. Revenue from these programs can surpass CORSIA targets, advancing decarbonization efforts. It’s crucial to ensure these offsets meet CORSIA’s sustainability criteria for eligible fuels.

Sustainability initiatives that go beyond CORSIA compliance can significantly enhance brand image and reputation, making airlines a preferred choice for eco-conscious travelers and businesses. Millennials and Gen Z travelers increasingly prioritize sustainability. Demonstrating leadership in both exceeding CORSIA requirements and broader decarbonization will attract this growing market segment.

By proactively exceeding targets and demonstrating the viability of sustainable practices, airlines can influence policy changes that further support decarbonization efforts beyond  CORSIA.

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