In December 2024, the UK Department for Transport (DfT) published a consultation on the implementation of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) offsetting requirements in the UK. This consultation relates to the second part of CORSIA and follows the implementation of CORSIA's monitoring, reporting, and verification (MRV) requirements in 2021.
The consultation requests feedback on the proposed CORSIA offsetting provisions and the approaches proposed to the interaction between CORSIA and UK Emissions Trading Scheme (ETS) requirements. Responses to the consultation are requested by 24 February 2025, after which the DfT aims to publish responses and implement the relevant legislation as soon as parliamentary time allows.
What is CORSIA?
CORSIA is a global market-based initiative developed and regulated by the International Civil Aviation Organisation (ICAO) to address CO2 emissions from the international aviation sector by stabilising emissions growth at 85% of 2019 levels.
CORSIA's voluntary first phase is currently underway and will expire at the end of 2026, at which point the second phase will begin. The UK along with 128 other ICAO states (including all EU member states) has confirmed its participation in CORSIA's first phase. During the second phase (from 2027 to 2035), CORSIA will be mandatory for all 193 ICAO states, subject to certain exceptions. Currently a decision on whether CORSIA will extend into a third phase past 2035 has not been taken.
Aeroplane operators to which CORSIA applies must monitor, report and verify their emissions from international flights between participating states. Where monitoring shows emissions in excess of the baseline over a three-year measurement cycle, aeroplane operators must purchase eligible emissions units (EEUs) to offset the excess emissions.
The UK has already transposed the MRV requirements into national law through the Air Navigation (CORSIA) Order 2021. Now, the DfT is consulting on how best to implement the CORSIA offsetting obligations into national law, aiming to minimise the differences between UK legislation and the international standard.
Consultation on implementing CORSIA
The consultation is split into two distinct sections. The first part sets out the proposed CORSIA offsetting provisions (including applicability, calculation of offsetting requirements, cancellation of EEUs and enforcement). The second part addresses potential approaches to the interaction between CORSIA and UK ETS requirements.
Offsetting Provisions:
| Applicability: |
The UK's CORSIA legislation and the proposed offsetting requirements apply to aeroplane operators within the scope of, and attributed to the UK under, CORSIA. An aeroplane operator will be attributed to the UK for the purposes of CORSIA if it: (i) has an ICAO Designator identifying the UK as the Notifying State; (ii) has a valid Air Operator Certificate or equivalent; or (iii) has its registered office in the UK or, where the operator is a natural person, is resident in the UK. It is proposed that new entrant airlines will not be required to comply with the offsetting requirements for: (i) three years from the year when they first meet the MRV applicability requirements; or (ii) until their annual CO2 emissions exceed 0.1% of total CO2 emissions from international flights in 2019, whichever is earlier. |
| Calculation: |
The Regulator (the Environment Agency in England) is responsible for notifying aeroplane operators of their offsetting obligation for a scheme year and their total final offsetting obligation for each three-year compliance period. The proposed approach for calculating an aeroplane operator's offsetting obligation is based on comparing the global total of in-scope CO2 emissions in a year against 85% of the 2019 baseline level. Prior to 2033, an aeroplane operator's offsetting obligation will be calculated by reference to: (i) the change in the global total of in-scope aviation CO2 emissions (from 85% of the 2019 level); and (ii) the proportion of such emissions emitted by the relevant aeroplane operator. From 2033 onwards, the growth of the individual aeroplane operator's emissions as compared against 85% of its 2019 emissions will also be factored into the calculation. Whilst CORSIA does not prescribe the use of low carbon aviation fuels (including sustainable aviation fuel (SAF)) or set targets for its use, it is proposed that an aeroplane operator may reduce its offsetting obligation through the use of SAF and other lower-carbon aviation fuels (including those produced with carbon capture and sequestration). To qualify as CORSIA eligible SAF, the producer must be able to demonstrate (amongst other things) that the fuel will achieve net greenhouse gas emissions reductions of at least 10% compared to the baseline emissions values for aviation fuel on a life cycle basis. |
| Cancellation of EEUs: |
CORSIA EEUs are generated by programs that reduce emissions (including in other sectors), with one unit representing one tonne of CO2 equivalent emissions avoided or removed from the atmosphere. Those who wish to generate EEUs to be acquired and cancelled by aeroplane operators with offsetting obligations must meet the ICAO's Emissions Unit Eligibility Criteria and be approved by the ICAO. Aeroplane operators must acquire and cancel sufficient EEUs to meet their aggregate offsetting obligation for each three-year compliance period and submit an independently verified report to the Regulator for approval. |
| Penalties & Enforcement: |
The consultation proposes a suite of penalties which may be imposed by the Regulator, including:
The DfT is also seeking views on the introduction of a requirement for an aeroplane operator to make up the deficit where it fails to cancel sufficient EEUs. |
Interaction with UK ETS:
Currently, the UK ETS applies to flights operated between the UK and the EEA or Switzerland and requires aircraft operators to monitor, verify and report their CO2 and other greenhouse gas emissions and surrender sufficient allowances to cover those emissions.
If CORSIA is implemented in its entirety, CO2 emissions on flights from the UK to the EEA or Switzerland will fall within the scope of both CORSIA and the UK ETS, resulting in double charging for those emissions.
The two different approaches the DfT is considering to mitigate any double counting are:
| "UK ETS only": |
Only the UK ETS, and not CORSIA, would apply to UK to EEA or Switzerland flights. CORSIA would apply to all other international flights within the scope of CORSIA. This approach mirrors that adopted by the EU (ie, only EU ETS applies where CORSIA and EU ETS might otherwise apply). The consultation recognises that the UK ETS only proposal would not impact the UK ETS market and, therefore, would be relatively simple to administer and comply with. Additionally, it is expected that the price of EEUs will remain lower than the price of UK ETS Allowances for the duration of the second phase of CORSIA (up to 2035), so the UK ETS only option would maintain the higher abatement incentive of the UK ETS. |
| "Price-based hybrid": |
Both CORSIA and the UK ETS would apply to UK to EEA or Switzerland flights, with aeroplane operators compensated retrospectively for the costs of complying with the CORSIA offsetting obligations on those flights. The form of compensation within the UK could include adjusting operators' UK ETS obligations or financial compensation. The consultation acknowledges that a price-based hybrid scheme would also maintain the full abatement incentive of UK ETS and ensure that CORSIA is fully implemented on all in-scope flights. However, concerns are raised regarding potential impacts on the UK ETS cap, market, and allowance price. |
Next Steps
The consultation closes on 24 February 2025, and the responses received will inform a final decision on the UK's approach to implementing CORSIA and its interaction with the UK ETS.
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