Updates on CORSIA and the 2023 revised EU Emissions Trading System (ETS) for aviation

Videoconference, 24 January 2024 — The Directive (EU) 2023/958, dated 10 May 2023, amending the EU Emissions Trading System (ETS) for aviation, published in the Official Journal of the EU on 16 May 2023, entered into force on 5 June 2023.  The 22nd edition of ECAC’s environmental familiarisation webinars was dedicated to understanding the main changes and implications of the changes arising from this revision and its interaction with the ICAO CORSIA scheme.

Blandine Ferrier from the ICAO EUR/NAT Regional Office and Laukia Joonas from EASA provided an update on the current process and efforts towards the ICAO CORSIA standard periodic review. They emphasised the importance of gaining insights from the implementation of the review to improve the standard and ensure its effective implementation.

Laura Lonza from the European Commission (DG CLIMA) outlined the key regulatory modifications in the implementation of the European ETS for aviation, which have been applicable since the revised directive entered into force last year. She underlined the progressive reduction of free allowances to the airlines by 25% in 2024 and 50% in 2025, ultimately eliminating them entirely after 2026. She clarified that for the time being, the EU ETS applies CORSIA in the EU, and that the next revision in 2026 may reconsider the scope of application after assessing both the EU ETS and CORSIA implementation. Ms Lonza noted in particular that both EU and non-EU operators were subject to EU ETS for routes within its scope. In discussion, the meeting looked at whether, unless legislative adjustments were made, duplicative market-based measures (CORSIA and EU ETS) could be applicable to non-EU registered operators in contradiction to ICAO Resolution A41-21.

María de la Rica, representing the carbon trader company Vertis Environmental Finance, offered an overview of the main implications of the 2023 revised EU ETS Directive. She shed light on how different types of aircraft operators would be impacted, showcasing the evolution of carbon markets in recent years and estimating emissions from operators that will need to be covered under the scheme. Ms de la Rica also provided insight on areas of uncertainty and major concern among operators, such as the interaction between EU ETS and CORSIA, economic impacts of both schemes, and challenges related to sustainable aviation fuel (SAF) use and reporting.

The webinar, attended by 93 participants, fostered fruitful exchanges of questions and comments between the audience and the speakers, contributing to a deeper understanding of the complex landscape of aviation emissions regulations.