CARBON OFFSETTING AND REMOVAL IN ACTION

Will it really work?

While the Net Zero Resolution is laudable, it will be challenging to achieve and has
attracted criticism from various quarters. Here are some of the key challenges and
criticisms:
1. Dependence on offsetting: The IATA's plan heavily relies on carbon offsetting - that
is, investing in projects that remove or reduce CO2 elsewhere to compensate for the
emissions produced by flights. Critics argue that offsetting is not a long-term solution
and does not encourage enough reduction in emissions at the source. Some also
question the effectiveness and accountability of offset projects.
2. Scope of emissions: While the IATA's net-zero target includes CO2 emissions from
flights, it does not cover non-CO2 emissions, such as those from contrails and nitrogen
oxides. Furthermore, it does not cover emissions from the production of aviation fuels
or the manufacturing and disposal of aircraft.
3. Over-reliance on future technologies: Next-generation aircraft are not yet mature
or economically viable at the necessary scale. There's a risk that the industry won't be
able to scale up these technologies as fast as needed to meet the net-zero target.
4. High hosts: Transitioning to SAF and new technologies will be expensive. This is a
significant challenge in an industry with historically thin profit margins and one that
has been hit hard by the COVID-19 pandemic. There's also the question of who will
pay for these changes - airlines, passengers, governments, or some combination of the
three.
5. Regulatory and policy challenges: Coordinating the required changes and getting
buy-in from all stakeholders can be a complex and time-consuming process.
6. Equity concerns: Some critics argue that the IATA's plan does not adequately
address equity concerns. For example, carbon offsetting projects often take place
in developing countries, which can lead to issues around land use and the rights
of local communities. Similarly, if the costs of the transition to net zero are passed
onto passengers in the form of higher ticket prices, this could make air travel less
accessible for some people.

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35 MUST-KNOW TERMS IN SUSTAINABLE AVIATION

CORSIA
The Carbon Offsetting and Reduction
Scheme for International Aviation
(CORSIA) is a programme designed to
help the aviation industry reduce its
carbon emissions. It's been set up by the
International Civil Aviation Organization
(ICAO), a group that oversees international
air travel.
In simple terms, CORSIA works like this:
imagine you're an airline, and your planes
give off a certain amount of CO2 when
they fly. Under CORSIA, if your flights give
off more CO2 than a set limit, you need to
make up for it. You do this by investing in
projects that reduce CO2 elsewhere, like
planting trees or creating renewable energy Source: ICAO
(i.e., carbon offsetting).
Criticisms of CORSIA
CORSIA aims to ensure that any growth in
international flights after 2020 doesn't lead 1. Dependence on offsetting: Critics
to a rise in total CO2 emissions from the argue that CORSIA relies too much
industry. The idea is to encourage airlines on offsetting rather than on actual
to cut their emissions where they can and reductions in emissions. Offsetting
offset the rest. projects can be complex and expensive.
With offsets under CORSIA costing,
about as low as €2.40 per passenger,
Benefits of CORSIA for a long haul flight, their effectiveness
1. Global impact: It is the first global is often questionable.
scheme aimed at reducing CO2 2. Voluntary participation: CORSIA's first
emissions from a single industry. This few years are voluntary, and not all
is a big deal, given how much carbon countries are participating. This means a
dioxide is given off by planes. significant amount of aviation emissions
2. Encourages cleaner technologies: may not be covered by the scheme
By setting a limit on CO2 emissions, 3. Limited scope: CORSIA only applies to
CORSIA encourages airlines to use international flights and not to domestic
cleaner technologies and fuels. ones. As such, a large proportion of
3. Flexible compliance: Airlines have global aviation emissions are not
flexibility in how they meet their covered.
offsetting requirements. They can 4. No non-CO2 emissions: CORSIA does
reduce their own emissions, buy carbon not cover non-CO2 emissions, like those
credits from other airlines, or invest in from contrails and nitrogen oxides,
offset projects. which also contribute to global warming.

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 CARBON OFFSETTING AND REMOVAL IN ACTION

SBTi
Founded in 2015, The Science Based Targets initiative (SBTi) is a global body that aims
to help companies and financial institutions set greenhouse gas emissions reduction
targets in line with the goals of the Paris Agreement.
In essence, the SBTi shows organisations how much and how quickly they need to reduce
their greenhouse gas emissions to prevent the worst effects of climate change. SBTi
defines targets as ‘science-based’ if they provide a clearly-defined pathway, in accordance
with the latest scientific findings.
The SBTi, however, has been criticised for not being transparent about its methods. Once
a target has been validated by the SBTi, there is no obligation for companies to follow
through on the goals. While companies are required to explain their cause, failure to
achieve a target does not amount to any penalty. The SBTi is currently working towards
revising its framework to overcome its shortcomings.

Source: SBTi

The SBTi stamp of approval is quite popular amongst airlines, with airlines like Air
New Zealand, American Airlines, easyJet, Air France - KLM, and several others already
committed to the cause.
In our ‘Flying to Net Zero’ report, we interviewed easyJet’s Sustainability Director, Jane
Ashton, who explained the airline’s net zero strategy via the SBTi.
• Read our report.

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35 MUST-KNOW TERMS IN SUSTAINABLE AVIATION

THE EU EMISSIONS TRADING SYSTEMS (ETS)

Set up in 2005, the EU ETS (European Union Emissions Trading System) is the world’s
first international emissions trading system. It is a type of carbon market, often referred
to as a "cap-and-trade" system, which aims to reduce greenhouse gas emissions through
market mechanisms.
Key elements of a cap-and-trade system:
• Cap: The "cap" in cap-and-trade refers to the total limit on greenhouse gases that can
be emitted by all participating entities. In the case of the EU ETS, this includes around
11,000 heavy-energy-using installations in power generation, industry sectors and
airlines operating between these countries. Each year, the EU lowers the cap slightly,
meaning the total emissions from these sectors must reduce accordingly.
• Trade: Each participant (say, a power plant or airline) is allocated a certain number of
carbon credits, where each credit represents the right to emit one tonne of CO2 (or
the equivalent amount of different greenhouse gas). These allowances can be traded,
meaning a company that reduces its emissions and doesn't need all its allowances can
sell them to a company that is unable to reduce its emissions as quickly.
• Carbon price: The trading of allowances creates a carbon price, which is the cost
per tonne of CO2 emitted. This price is a signal of the value of reducing emissions -
the higher the price, the greater the economic incentive for companies to cut their
emissions.

The EU ETS is the largest carbon market in the world, but it's not the only one. There
are several others, including the California Cap-and-Trade Program, the Regional
Greenhouse Gas Initiative (RGGI) in the northeastern United States, and the Chinese
national carbon market. Each of these operates similarly to the EU ETS, but with
different caps, participants, and regulations.

Source: Maersk

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 CARBON OFFSETTING AND REMOVAL IN ACTION

Relevance to Aviation
Trading CO2 emissions from aviation is available in the EU ETS since 2012. Under the
EU ETS, all airlines operating in Europe are required to monitor, report and verify their
emissions, and to surrender allowances against those emissions.
The benefits of including aviation in the EU ETS:
• Encourages emission reduction: It incentivizes airlines to reduce their greenhouse
gas emissions, as they can profit from selling unused credits.
• Global impact: As many airlines operate internationally, this means that the benefits
of emission reductions can have a global impact, not just within the EU.
• Market-based solution: The system harnesses market mechanisms to drive
environmental improvements, which can often be more efficient than command-and-
control regulation.

Source: The Times

Ryanair has been actively participating in the EU Emission Trading System (ETS) since
2012 as required by law. Initially, like many other airlines, Ryanair voiced concern over
the EU ETS, primarily over fears of increased operational costs which would translate to
higher airfares. The company expressed that the implementation of the system would give
non-European airlines a competitive advantage.
To meet the EU ETS requirements, Ryanair has invested in newer, more fuel-efficient
aircraft and has pursued a high-seat-density model, which spreads the emissions from
each flight over a larger number of passengers. They have also invested in digital tools
and carbon offsetting projects.
However, some environmental groups have criticised these efforts as inadequate,
arguing that the only effective way to reduce emissions from aviation is to reduce the
number of flights. In 2019, Ryanair, the Irish low-cost airline, became the first non-coal
company to join the top ten list of EU's biggest carbon dioxide emitters, highlighting the
significant emissions that can come from aviation.

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