CORSIA and the EU’s Emissions Trading System: how EUROCONTROL supports European aviation to foster sustainability

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Wing of an airplane flying over clouds

Using its unique data and expertise EUROCONTROL supports the aviation sector to ensure reporting accuracy for the two instruments designed to contribute to addressing the climate impact of aviation: the EU’s Emissions Trading System (ETS) and ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation - short CORSIA. To date, 24 EEA States, Switzerland and the UK and more than 500 aircraft operators use the EUROCONTROL facilities.

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.

Emissions 2019 from ECAC states

Compared scope of EU ETS & CORSIA ECAC departures and arrivals

One year after the start of the COVID-19 pandemic, air traffic had so significantly decreased that CO2 emissions from flights declined by 57%.

How to ensure reporting accuracy, with minimum administrative burden?

Both the ETS and CORSIA rely on the declaration of CO2 emissions that aircraft operators report annually to their administering State, after verification by an external independent auditor. EUROCONTROL has been contracted by the European Commission and by European States to operate a central function to support them and aircraft operators in implementing the EU ETS and CORSIA. Through these report and support facilities, aircraft operators receive EUROCONTROL independent flight and emission data to support the verification of their own reports prior to submission to their administering state. The accuracy of EUROCONTROL estimates is such that under the ETS airlines with emissions below 3,000 tonnes of CO2 per annum are even allowed to submit this data without verification, hence saving time and money.

"Setting up an in-house system to report on ETS would have been practically impossible. The cooperative approach that was taken with the EUROCONTROL Support Facility allowed for a single system to be set up, based on the specifications agreed by all the users, with the cost being distributed between the participating entities. The resulting system provides very good value for money."

Saviour Vassallo Senior Environment Protection Officer, Malta Resources Authority

“Recognizing the EUROCONTROL Environment Team's capability to work with data (collection, control, survey, analysis), we expect to see them continuing to identify the needs of their clients but also the potential of the system so that it will remain a dynamic facility, for both ETS and CORSIA.”

Urs Ziegler Head Environmental Affairs at the Federal Office, Civil Aviation Switzerland

ETS and CORSIA: how do they tackle climate change from aviation?

In 2019, 77% of the €14bn in revenues raised from auctioning allowances were earmarked for reinvestment in specified climate and energy related purposes. States are obliged to use at least half of auction revenues to reduce greenhouse gas emissions and mitigate climate change. In 2019, 5.5 million aviation allowances were auctioned (i.e. 5.5 million tonnes CO2) compared with 3.4 million in the first six months of 2020. The cap of ETS decreases every year, ensuring that total emissions fall.

Yearly evolution of allowances covering ETS emissions

Source: EUROCONTROL (based on Public Registry data)

Until the Covid-19 pandemic hit aviation in 2020, ICAO foresaw that the CORSIA baseline for calculation should be the average of 2019 and 2020 emissions. However, with the significant drop in air traffic ICAO agreed to adjust the reference period using CO2 emissions from 2019 only for the period 2021 to 2023. As of 2021 airlines flying between participating states will thus offset any growth in CO2 emissions above 2019 levels by purchasing carbon credits from designated projects through emissions reduction projects.

ETS allowance cost

Based on yearly average price

Next steps

2021 will yet again be a decisive year in Europe for the EU Emissions Trading System (ETS) and ICAO’s CORSIA. Following Brexit, the UK has left the EU’s ETS and launched its own version. The European Commission is planning to come forward with a revision of the ETS directive by this summer to harmonise the ETS and CORSIA implementation mechanisms under the umbrella of the EU Green Deal, with the aim of achieving at least a 55% net reduction in greenhouse gas emissions by 2030.

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