The objective of the ETS is to drive down greenhouse gas emissions. It is a cap and trade system that gives airlines (and also companies from the energy sector or heavy industry) a financial incentive to reduce their emissions and to trade allowances thus saved. While ETS is limited to flights within EU countries, Iceland, Liechtenstein, and Norway, CORSIA is a global CO2 offsetting scheme aiming to achieve carbon neutral growth from 2021 onwards on a global scale. Aircraft operators will offset any growth in CO2 emissions above 2019 levels from flights between participating states by purchasing carbon credits from designated projects through emissions reduction projects. Up to now, 88 states representing 77% of international aviation activity have volunteered to take part in CORSIA.
In 2019, CORSIA - covered 301 m tonnes of CO2 emissions and the EU’s Emissions Trading System (ETS) 69m tonnes. More than 67m of allowances for CO2 emissions were verified under the EU ETS, of which 32m correspond to free allowances for the airlines and 35m to allowances airlines had to acquire. The total cost of the CO2 acquired allowances incurred by airlines was estimated at €881m which represents 9% of the cost of the corresponding fuel –one of the major cost factors for airlines.