Lessons learned from the first round of applications by carbon-offsetting programs for eligibility under CORSIA

In 2016, the International Civil Aviation Organization (ICAO) adopted the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). The scheme requires participating airline operators to purchase carbon offset credits to compensate for the increase in their carbon dioxide emissions from international flights above 2019/2020 levels. This paper synthesizes key lessons learned from an assessment of the first 14 applications of carbon-offsetting programs for eligibility under CORSIA, focussing on five out of eight eligibility criteria established by ICAO. The evaluation shows that the degree to which the applicants satisfy the ICAO requirements differs substantially. Some applicants hardly meet any of the requirements and may not even be considered carbon-offsetting programs. However, there are also notable differences in relation to specific criteria. With regard to ensuring additionality and establishing baselines, key shortcomings are that many programmes apply approaches that do not guarantee environmental integrity of the generated credits. Not all programs regularly reassess whether their approaches are still appropriate in the light of new circumstances, such as lower costs of renewable energy technologies, and programs may still need to update their approaches for assessing additionality and establishing baselines in the light of the new context of the Paris Agreement. Some programs also do not require an independent third-party assessment of baseline methodologies. Most programs do not yet have procedures in place or planned for avoiding double counting between CORSIA and nationally determined contributions (NDCs) under the Paris Agreement. However, a few programs are in the process of implementing detailed procedures, based on voluntary Guidelines developed by a multistakeholder group. To address non-permanence, most programs use "buffer" approaches. The duration for which non-permanence is ensured, the avoidance of moral hazard risks of intentional reversals, and the "capitalization" of buffers vary considerably among programs. The Clean Development Mechanism's provisions to address non-permanence were in principle robust but do no longer work, given that the Kyoto Protocol will not have a third commitment period. Lastly, only two programs have a process in place which requires the assessment of environmental and social risks, the adoption of safeguards, and the monitoring and reporting on risks. The paper also identifies several cross-cutting issues. First, we recommend that ICAO only approve programs as eligible for CORSIA once programs have amended their standards and procedures to fulfil all criteria. Second, the evaluation identified that ICAO still needs to clarify several matters that are not explicitly addressed in current criteria, such as what global warming potentials programs should use to convert non-CO2 emissions into CO2 equivalents; whether offset credits will be eligible if the host country does not participate in the Paris Agreement; with what type of international mitigation targets double counting must be avoided; and the treatment of emission reductions not covered by NDCs. Clear international rules on these matters would greatly facilitate the approval of programs and the implementation of CORSIA. Third, we recommend that ICAO adopts a transparent procedure for the initial approval, ongoing supervision, re-approval, suspension and termination of eligibility of programs. This procedure could also address the insufficient level of information in current applications, by requiring programs to provide more detailed information. Lastly, we recommend that the Parties to the Paris Agreement include specific provisions in the international rules on Article 6 for how countries should account for offset credits used under CORSIA