International aviation fuel company Air bp has announced the first sale of International Sustainability and Carbon Certification (ISCC) EU sustainable aviation fuel from bp’s Castellon refinery in Spain. LATAM Cargo Chile used the fuel on a flight from Zaragoza to North America and partners in the initiative included Spanish airport operator Aena and fuel logistics company Exolum. ISCC EU is recognised by the European Commission to demonstrate compliance with legal requirements of the EU’s Renewable Energy Directive (RED II). ISCC has two other certification systems relevant to the supply of SAF – ISCC PLUS and ISCC CORSIA – and in 2021, NetJets Europe became the first customer to purchase Air bp’s ISCC PLUS certified SAF from the Castellon refinery. The ISCC EU SAF was made from waste-based sustainable feedstock and co-processed together with fossil fuel. Co-processing has a blending limit of up to 5% within the jet fuel specification and bp has launched an industry taskforce looking to increase this to 30%.

Despite the low blend limit, co-processing can be used to produce SAF in existing refineries with relatively minor technical modifications and does not require the high financial investment and length of time to build a new standalone production facility.

“This latest announcement marks another important milestone for Air bp as we work towards making SAF more available. As a key step in replacing fossil fuel with renewable feedstock within existing refineries, co-processing has an integral role to play in scaling up SAF production in the most economical and efficient way,” said Andreea Moyes, Air bp’s Global Sustainability Director. “We believe that all technologies and pathways, and both standalone and co-processing, are needed to help the industry decarbonise and reach its goal of net zero by 2050. The supply of ISCC EU SAF from Castellon will open new opportunities throughout the country and beyond.”

In March 2022, the bp refinery in Lingen became the first industrial production facility in Germany to use co-processing to produce SAF from used cooking oil.

The oil giant said it aims to increase SAF production further in future and has just announced that as part of the Hydrogen Cluster of the Valencia Region (HyVal), its production of biofuels, including SAF, is expected to increase three-fold, to 650,000 tonnes a year by 2030 in Castellon. Green hydrogen will be used as a feedstock for the production of SAF in an independent unit, added bp.

Commenting on the flight from Spain to North America, Andrés Bianchi, CEO of LATAM Cargo said: “It represents one of most concrete steps in our SAF fuel agenda. As a group, LATAM is committed to contributing to the protection and care of the environment, so this first fuelling reflects the importance of the collaboration of all players in the logistics chain, including Aena and Exolum.”

In June 2022, Madrid-based Exolum obtained ISCC PLUS and ISCC CORSIA certifications that guarantee compliance with high sustainability standards in biomass production, traceability of its origin and the potential saving of greenhouse gases. ISCC CORSIA certification ensures SAF complies with the sustainability criteria established by ICAO for fuels eligible under its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). ISCC PLUS is a voluntary certification system for all markets and sectors not regulated by CORSIA and RED II.

The recognition of ISCC EU by the European Commission demonstrates that consignments of biofuel, bioliquid or biomass fuel, recycled carbon fuel and renewable liquid and gaseous transport fuel of non-biological origin comply with the respective legal requirements specified in RED II.

Exolum’s ISCC SAF certifications underpin its Avikor platform that enables airline passengers, whether corporate or individuals, to contribute to the reduction of CO2 on their flights from either Madrid Barajas or Barcelona El Prat airports through the purchase of SAF. Airline partner  Vueling has committed to matching the contributions of its customers using the scheme. Spanish instant mobile payment service Bizum, which has over 21 million users, partnered with Avikor last September to decarbonise its business trips.

Top photo (bp Plc): The bp Castellon refinery

Bottom photo: Air bp, bp and LATAM Cargo representatives mark sale of ISCC EU SAF

Christopher Surgenor

Editor

• Linkedin

The EU’s ‘Fit for 55’ legislative package of proposals unveiled by European Commission President Ursula von der Leyen is likely to have long-term consequences for the aviation sector. Parts of the package have already been widely flagged, such as the introduction of an incremental blending mandate for sustainable aviation fuels and tightening of EU Emissions Trading System (EU ETS) provisions for intra-European flights. However, a proposal to remove the tax exemption on aviation fuel could have a major impact on the sector. The Commission is proposing a kerosene tax based on energy content be introduced linearly over a transitional period of 10 years from 2023, corresponding to minimum tax rates applicable to road transport fuels. Because of existing agreements with countries like the United States, the tax would not be applied to cargo-only intra-EU flights and a zero rate would be applied to aviation advanced biofuels and e-fuels for a limited period to allow production scale up. Airline industry body IATA said a reliance on taxation to cut Europe’s aviation emissions would be counter-productive to the goal of sustainable aviation.

The ‘Fit for 55’ package is a response to the increased level of ambition, enshrined in a new EU climate law, that sees the previous target of reducing CO2 emissions by 40% by 2030 compared to 1990 levels being raised to 55%.

Unveiling what she described as a roadmap of legislative tools to achieving the new target and becoming the first climate-neutral continent in the world, von der Leyen said the current fossil fuel economy had reached its limits and needed to be replaced with a new model powered by clean energy. Carbon pricing would be the guiding and market-based instrument “with a social compensation,” she told a media briefing. “Emissions of CO2 must have a price that incentivises consumers, producers and innovators to choose clean technologies,” she said. “And we know that carbon pricing works. Our existing ETS has already helped significantly to reduce emissions in industry and in power generation.”

Under new proposals, the EU ETS will be extended to include shipping emissions for the first time and a separate new ETS set up for road transport and buildings. The Commission is also proposing to phase out free emission allowances for aviation and amend the EU ETS to align with the global ICAO CORSIA offsetting scheme.

In 2018, EU CO2 emissions from aviation made up 3.7% of the economy-wide total or 15.7% of CO2 transport emissions. The EU was responsible that year for 15% of global aviation emissions – with intra-EEA aviation representing 7.5% and departing flights to third countries another 7.5%. The Commission points out that departing flights are covered in the EU’s NDC under the Paris Agreement. Despite the fall in traffic caused by Covid-19, under the baseline scenario CO2 emissions from aviation are still forecast to increase by 24% by 2030 and by a further 27% by 2050 compared to 2005 levels.

EU ETS and CORSIA

In its proposed revision to the Aviation EU ETS directive, the Commission says in order to reach the increased climate target, “all sectors, including aviation, must adequately contribute to the required domestic emission reduction efforts.” Beyond the 2030 target, it quotes a previous communication that states: “In accordance with its international commitment to economy-wide action under the Paris Agreement, the EU should continue to regulate at least intra-EU aviation emissions in the EU ETS.”

Between 2013 and 2020, the Commission estimates net savings of 193.4 Mt CO2 were achieved by aviation through the EU ETS, although aviation CO2 emissions under the EU ETS decreased in 2020 by 64% compared to 2019, due to the pandemic. However, it says, the enhanced 2030 climate ambition requires the contribution from sector to be “significantly strengthened” and revisions to the EU ETS rules must be addressed.

The main legal amendments to the directive proposed are to:

• Consolidate the total quantity of aviation allowances at current levels and apply the linear reduction factor in accordance with Article 9 of the directive;
• Increase auctioning of aviation allowances;
• Continue intra-European application of the EU ETS while applying CORSIA as appropriate to extra-European flights; and
• Ensure that airlines are treated equally on the same routes with regard to their obligations with economic impacts.

In parallel to these amendments, and as a result of aviation emissions likely to not exceed their collective 2019 levels (the baseline year for CORSIA) in 2021 (the first year of CORSIA) due to the pandemic, a separate proposal is being made to implement Member States’ notification to EU-based airlines of zero CORSIA offsetting for the year 2021 “in a manner that minimises the administrative burden of national authorities and airline operators, and provides legal certainty as regards CORSIA offsetting by airlines based in Member States.”

Aviation fuel tax

However, says the Commission in its proposed revisions to the Energy Taxation Directive (ETD), the existing market-based instruments for aviation –the EU ETS and CORSIA – only partially internalise climate externalities. For intra-EEA flights, the climate change impacts are currently not fully internalised through the EU ETS as a significant proportion (44% in 2019) of total verified emissions are allocated for free to aircraft operators, although this is being reassessed in the proposed EU ETS directive revisions.

“As for extra-EEA flights, the price signal provided by CORSIA clearly falls below the EU ETS carbon price and would only marginally reflect the climate external costs generated by extra-EEA flights,” says the Commission.

It is therefore proposing that the current mandatory EU-wide fuel tax exemption accorded to aviation (and shipping) be removed. Although Member States may currently limit the scope of the exemptions by taxing these sectors domestically or after having entered into a bilateral agreement with another Member State to waive the exemption, “the reality is that exemptions remain,” says the Commission.

“The exemption offers these sectors a favourable tax treatment in the transport sector as road transport is not exempted and the exemption of rail transport is optional,” it says. “Moreover, the present situation substantially weakens the incentives for investing in more energy-efficient and less polluting crafts. The lack of proper differentiation between the different fuels in these sectors covered by the mandatory tax exemptions also does not facilitate reducing the significant price difference between fossil fuels and sustainable fuels. Properly designed taxation measures could support the uptake of sustainable fuels and at the same time their production could result in lower prices for these fuels.”

Removing the mandatory exemption would allow Member States to unilaterally tax the two sectors if they so wish but without obliging them to do so. However, with regard to aviation, international flights to third countries outside the EU would be excluded from the scope of the revised tax since, says the Commission, legal air services agreements with some third countries do not allow the taxation of fuel uplifted by the carriers of these third countries at EU airports.

Similarly, intra-EU cargo-only flights would also be excluded from the scope due to the special privileges granted to some third countries, for example the United States through the US-EU Open Skies agreement. Under Open Skies, US carriers have significant market share of the intra-EU cargo market and have current exemption from the taxation of aviation fuel uplifted in the EU.

The Commission says a possibility would be for Member States to tax fuel on domestic flights or through bilateral or multilateral agreements between them. Another possibility could in principle be to apply a fuel tax to international flights to those third countries that do not have air services agreements with the EU or are not prohibited by air services agreements. In any case, it adds, a passenger ticket tax may be an appropriate alternative to a fuel tax on international flights that would be outside the scope.

The proposal offers a number of options that could be applied to an aviation fuel tax, which include a transitional period of 10 years (2023-2033), increased in a linear way to the corresponding minimum tax rates applicable to motor fuels used in road transport. A zero rate would be applied for a limited period to advanced biofuels and e-fuels for aviation to help the uptake of these fuels until their production has been scaled up. This transition would also provide stakeholders with a clear price signal trend in order to adapt investments and technologies.

The Commission acknowledges a potential problem of an EU aviation fuel tax is carbon leakage due to tankering, whereby fuel is uplifted outside EU jurisdiction and used on subsequent intra-EU operations. However, it believes that due to the limited size of the fuel tanks on aircraft, the opportunities for tankering are limited. The collection of an aviation fuel tax is not expected to be a problem from an administrative perspective as they would be collected as in other transport modes by the fuel supplier and the funds transferred to the relevant tax authority.

An independent study carried out for the Commission and quoted in the ETD proposal, modelled a number of tax rates applied to aviation fuel, ranging from €0.17 to €0.50 per litre and a central option of €0.33/litre, with the airline expected to pass the cost on to passengers by raising ticket prices, leading to a reduction in passenger demand and hence fuel consumption. Only to a limited extent does it expect the airline be incentivised to choose more efficient aircraft for their operations to reduce the fuel consumed. The modelling showed implementing a tax on fuel loaded for intra-EEA flights had noticeable impacts on CO2 emissions in the long term, with reductions of between 6% and 15% relative to a 2016 baseline.

In terms of tax revenue, the study showed that under the €0.33/litre option, the tax would contribute around €6.7 billion ($7.9bn) per year in 2050. The wider impacts on the economy from the reduction in aviation demand would then reduce the rise in total tax revenue over the baseline to €5.4 billion per year.

By 2025, the introduction of a €0.33/litre fuel tax, with no transition period, could lead to a reduction of 10% in the number of flights when compared to the baseline but the overall flight frequency on most routes would still be higher than it was in 2016, although some variations are expected and specific regions could see their connectivity reduced. EEA carriers could also suffer negative competitiveness impacts in relation to third country carriers which may be subject to a more lenient tax regime in their home countries. The implementation of a fuel tax on intra-EEA flights could also give rise to concerns over ‘hub switching’ as carriers change the connection, or hub, airport from an EEA airport to a non-EEA airport. This is more likely to impact traditional network carriers than low-cost carriers with their mainly direct flights.

Reaction

Reacting to the fuel tax proposal, the International Air Transport Association (IATA) said a reliance on taxation as a solution to cutting aviation emissions was counter-productive.

“Aviation is committed to decarbonisation as a global industry,” said IATA Director General Willie Walsh. “We don’t need persuading, or punitive measures like taxes, to motivate change. In fact, taxes siphon money from the industry that could support emissions reducing investments in fleet renewal and clean technologies. To reduce emissions, we need governments to implement a constructive policy framework that, most immediately, focuses on production incentives for sustainable aviation fuels and delivering the Single European Sky.”

IATA acknowledged that market-based measures to manage emissions were required until technology solutions had been fully developed and said it supported the CORSIA scheme as a way to avoid a patchwork of uncoordinated national or regional measures such as the EU ETS. However, said the trade body: “We are extremely concerned by the Commission’s proposal that European States would no longer implement CORSIA on all international flights.”

Added Walsh: “Aviation’s near-term vision is to provide sustainable, affordable air transport for all European citizens with SAF-powered fleets, operating with efficient air traffic management. We should all be worried that the EU’s big idea to decarbonise aviation is making jet fuel more expensive through tax. That will not get us to where we need to be. Taxation will destroy jobs.”

Trade body Airlines for Europe (A4E) said the ‘Fit for 55’ package included proposals that would significantly impact European airlines in the years to come and have a transformative impact on the sector. However, commented A4E Managing Director Thomas Reynaert, climate policy regulation could also be ecologically and economically counterproductive. “Badly designed European taxes will not reduce emissions,” he said. “By making flying more expensive, it may shift demand globally and reduce traffic locally but it will not tackle the source of the emissions. We need to invest in solutions that offer real reductions in CO2 emissions per aircraft. Increasing costs reduces our capacity to make these investments whilst CO2 emissions are potentially shifted to other regions.”

A4E said unilateral and double pricing of CO2 under several market-based measures would be economically counterproductive and if airlines paid for their CO2 under the EU ETS, for instance, they should not have to pay for it again.

“Inefficient policies leading to a disproportionate cost burden hamper aviation’s decarbonisation plans. As one of the sectors hardest hit by the pandemic and with an essential role in kick-starting societal and economic recovery, future EU policies must guarantee and support the sector’s competitiveness,” said A4E. “The ‘Fit for 55’ policies risk affecting this competitiveness and that of the entire aviation ecosystem, Europe’s tourism industry and the wider EU economy. Carbon leakage will need to be mitigated through appropriate measures, such as uniform regulations, carbon border adjustment or designated finance mechanisms preserving competition neutrality.”

A4E is one of the five European aviation industry associations that contributed to the Destination 2050 roadmap initiative launched earlier this year aimed at achieving net zero CO2 emissions from aviation by 2050. The five associations – including ACI Europe, European Regions Airline Association, Civil Air Navigation Services Organisation and Aerospace and Defence Manufacturers Association, as well as A4E – took the release of the ‘Fit for 55’ package to repeat their support for the Commission’s climate ambitions.

“Destination 2050 is our sector’s contribution to the implementation of those ambitions, but our roadmap shows we cannot do this alone. Achieving a net zero European aviation requires fully-aligned and enabling policy, regulatory and financial frameworks – both at EU and national level. For this reason, we call on the European Commission to support and take the lead in the development of an EU Pact for Sustainable Aviation to drive these proposals forward. We stand ready to engage with the European Commission to define such a Pact and hold regular exchanges to ensure its implementation,” they said in a statement.

European NGO Transport & Environment, which has long campaigned for an end to aviation’s fuel tax exemption, said the Commission’s plans would drive airlines to use cleaner, low-carbon fuels. However, it said, the tax reform would only apply to fuel used on private and commercial flights within Europe and exempt 60% of all fuel sales.

“Axing jet fuel’s tax exemption in Europe is a vital step towards ending decades of subsidised pollution, which even included fuel for private jets,” said Andrew Murphy, Aviation Director at T&E. “But by not removing the tax exemption for flights outside of the EU, it still lets the majority off the hook.”

The revisions to the EU ETS should drive up the price of credits and bring forward the date by when emissions from the aviation sector must reach zero, said T&E. “However, flights departing Europe – responsible for over 60% of emissions – will remain exempt,” it pointed out. “Instead, the European Commission proposes that these flights be covered by an industry-crafted offsetting scheme [CORSIA], despite the Commission’s own research finding that it is ineffective.”

Campaign group Stay Grounded, which represents 170 member organisations, also welcomed the plan to end the tax fuel exemption. However, said spokesperson Magdalena Heuwieser: “This package will not make Europe’s aviation sector fit for 55% emissions reduction by 2030. It’s important to finally get rid of the kerosene tax exemption but the plan is not strong enough and the rollout over 10 years is way too short. We have to fully tax aviation immediately.”

She expressed disappointment that flights to non-EU destinations and intra-EU cargo flights were not included in the kerosene tax proposal and called for an immediate end to free allowances to airlines under the EU ETS.

Editor’s note: The important RefuelEU Aviation proposal contained in the ‘Fit for 55’ package is covered in an article here

Top photo: The European Commission’s Berlaymont building lit in green to mark the European Green Deal (© EU 2021)

ICAO’s governing Council has adopted decisions on eligible carbon emissions units and sustainability certification schemes for eligible fuels that the UN agency says are the final building blocks for the CORSIA carbon offsetting mechanism for international aviation, which formally starts next month. At its 221st session, the Council accepted recommendations from its Technical Advisory Body (TAB) on a second set of eligible emissions units (EEUs) for use with offsetting requirements in the initial 2021-2023 pilot phase of CORSIA. This includes the approval of the Architecture for REDD+ Transactions (ART) to supply airlines with national and subnational (jurisdictional) forestry protection carbon credits. ART was the only new second-round applicant to be recommended for immediate eligibility to supply CORSIA EEUs. RSB and ISCC have been approved as sustainability certification schemes for CORSIA eligible fuels.

Commenting on the outcome of the session, Council President Salvatore Sciacchitano said: “ICAO set out a vision for carbon-neutral growth in international aviation and we have now seen that vision bear fruit. The Council’s decisions on eligible emissions units and sustainability certification schemes are the final steps necessary for CORSIA’s timely implementation.”

The approval of EEUs applies for use with offsetting requirements in the pilot phase and are subject to their respective scope of eligibility and eligibility dates. Issued units must be in respect of activities that started their first crediting period from 1 January 2016 and in respect of emissions reductions through 31 December 2020. It requires TAB recommendation and Council approval for an extension to the eligibility timeframes beyond the pilot phase.

TAB has now recommended and the Council approved seven emissions units programmes for eligibility across the two assessment cycles: American Carbon Registry (ACR), Architecture for REDD+ Transactions (ART), China GHG Voluntary Emission Reduction Program, the UN’s Clean Development Mechanism (CDM), Climate Action Reserve (CAR), Gold Standard and Verified Carbon Standard (Verra).

The approval by ICAO of Winrock’s ART and Verra’s Jurisdictional Nested REDD+ (JNR) represents the first acceptance of REDD+ (Reducing Emissions from Deforestation and forest Degradation) standards in a compliance market and is an important moment in the development of REDD+, said the International Emissions Trading Association (IETA).

A paper published by IETA calls for increased investment to prevent deforestation and for carbon markets to channel finance to all pathways that protect, restore and enhance the ecosystems that draw down and store carbon from the atmosphere.

“We need to scale up finance to avoid deforestation – especially tropical deforestation – in a way that contributes to sustainable development goals in forested regions,” said IETA CEO Dirk Forrister.

The paper points out that many countries have included REDD+ activities as part of their Nationally Determined Contributions (NDCs) to the Paris Agreement and that scenario modelling indicates dramatic reductions in deforestation are necessary to help achieve the Paris Agreement’s 1.5C temperature goal.

“Reducing deforestation and the conversion of natural habitats must be prioritised and recognised for its significant climate change mitigation potential in the short-to-medium term,” said Ellen Lourie, Senior Policy Associate at IETA. “If forests are allowed to be destroyed, it won’t be possible to recapture and store the lost carbon in new forests quickly enough to meet the Paris goals.”

Natural Climate Solutions (NCS) is becoming an increasingly large component of the voluntary market, says IETA, and in 2019 forestry and land use represented over 50% of the market by value. The private sector-led Taskforce on Scaling Voluntary Carbon Markets is looking to increase the voluntary market by at least 15-fold by 2030, which, says IETA, represents an opportunity to direct significant new finance into forest protection.

Commenting on the ICAO outcome, Frances Seymour, Chair of the ART board, said: “We applaud the ICAO Council’s decision to approve jurisdictional REDD+ credits from ART. Protecting and restoring tropical forests can contribute up to one-third of the climate results the world needs over the next two decades, representing a massive mitigation opportunity that needs access to private sector capital at scale. ART was designed as a Paris Agreement-aligned, fit-for-purpose crediting programme that provides the assurance of integrity and safeguards that markets need.”

ART, which uses The REDD+ Environmental Excellency Standard (TREES), said its crediting ensures that jurisdictions meet standard market requirements for robust accounting, independent third-party verification and issuance of serialised units on a transparent registry. Despite the impact of the Covid pandemic and the subsequent adjustment to the CORSIA baseline that would delay the need for the airline industry to purchase offsets for compliance with the scheme, the ICAO approval had been interpreted as a ‘seal of quality’ by market participants, said ART. It stated that since the first crediting programmes were approved in March 2020, interest in purchasing CORSIA-eligible credits was increasing from outside the airline industry as a way to ensure they were investing in credible emission reductions.

“ART was established in anticipation of catalytic private sector interest in REDD+, especially in industries with hard-to-abate emissions,” said Mary Grady, Director of the ART Secretariat. “We hope ICAO’s approval provides the needed quality imprimatur for voluntary investments in REDD+ that extends beyond the global aviation sector.”

Mario Boccucci, Head of the UN-REDD Programme Secretariat, commended ICAO’s approval of jurisdictional and national REDD+ crediting programmes, adding: “The UN-REDD Programme is ready to continue to support REDD countries ensure high-quality and environmental integrity, and provide technical assistance to meet NDCs and raise ambition.”

NGO Environmental Defense Fund (EDF) has helped to establish the Emergent Forest Finance Accelerator, a non-profit finance intermediary supported by the Rockefeller Foundation and the Norwegian government’s International Climate and Forest Initiative, to facilitate large-scale REDD+ transactions using the ART framework. It is collaborating with ART, Emergent, the UN REDD Programme and Forest Trends on the ‘Green Gigaton Challenge: Bringing REDD+ to Scale’ that seeks to set a demand signal that can scale up to at least a billion tons per year in emissions reductions transacted from high-integrity jurisdictional REDD+ by 2025.

“ICAO’s decision connects limits on aviation carbon pollution with investments in tropical forest protection and restoration, and is a win for nature, countries, companies and communities,” said Ruben Lubowski, Associate VP for Climate and Forests and Chief Natural Resource Economist at EDF. “After more than a decade of work on REDD+ frameworks under the UNFCCC and other fora, this marks the first time that REDD+ credits have been approved for use within a global compliance carbon market system.

“ICAO’s decision to include large, jurisdictional-scale REDD+ programmes in CORSIA sends a critical signal to companies and policymakers about the value of tropical forest protection to meet climate goals. It shows forest countries that there is a tangible demand for emissions reductions of the highest environmental and social integrity. Approval of these programmes will drive progress in reducing emissions at the scale needed to achieve the climate goals set by the aviation industry and in the Paris Agreement.”

The focus of the TAB and ICAO Council on ensuring programmes obtain from host countries written attestations that they will properly account for the transferred reductions should add to the efforts of Parties in ongoing climate talks to finalise clear guidance to ensure environmental integrity and prevent double-counting of emission reductions, said EDF. The NGO has produced analysis to show global climate cooperation through carbon markets can enable double the emissions reductions under current Paris pledges for the same cost as countries acting alone.

At its November meeting, the ICAO Council also approved two Sustainability Certification Schemes, the Roundtable on Sustainable Biomaterials (RSB) and the International Sustainability and Carbon Certification (ISCC), as eligible to certify CORSIA Eligible Fuels, based on recommendations by ICAO’s Committee on Aviation Environmental Protection (CAEP). The use of such fuels enables aeroplane operators to reduce their CORSIA offsetting requirements from the use of low-carbon and sustainable aviation fuels (SAF) that must be certified by one of the two organisations, although there is a degree of mutual recognition between them. Such fuels must meet the CORSIA Sustainability Criteria, including to achieve net GHG emission reductions of at least 10% compared to the baseline lifecycle emission values for conventional aviation fuel and not be made from biomass obtained from land with high carbon stock.

RSB has developed its own CORSIA Standard which it said goes above and beyond the ICAO scheme’s requirements to ensure that SAF achieves at least 50% GHG reductions on its core lifecycle analysis and a minimum 10% when including CORSIA’s Induced Land Use Change values (ILUC). In addition, it adds, RSB-certified SAF enables further claims around zero deforestation, environmental protection, food security and human rights, as specified in the RSB Principles and Criteria.

RSB is supported and endorsed by many in the aviation industry and also by environmental NGO coalition group ICSA. Airline members of the Sustainable Aviation Fuel Users Group (SAFUG), representing around a third of global commercial aviation fuel consumption, have committed to developing and using fuels consistent with RSB’s sustainability requirements. A third of RSB’s members are from the aviation sector. RSB certificate holders include Gevo, Nuseed, SkyNRG and World Energy, with further commitments to RSB certification from Velocys, LanzaTech and LanzaJet. KLM has committed to sourcing RSB-certified SAF.

Renewable jet producer Neste is also supporting RSB certification standards. “We cordially congratulate RSB for receiving ICAO recognition for its standard and we look forward to continuing the close collaboration,” said the Finnish company’s VP Business Development, Renewable Aviation, Sami Jauhiainen.

“A clear pathway is now available for industry leaders to demonstrate their commitment to sustainability goes above and beyond the legal requirements of CORSIA to also include a full range of social and environmental impacts as well,” commented Rolf Hogan, RSB’s Executive Director, on the ICAO approval. “We look forward to working with these pioneers to implement this new RSB CORSIA Standard to help transform the industry, and the world.”

Added Pedro Piris-Cabezas, Director of Sustainable International Transport and Lead Senior Economist at EDF: “ICAO Council’s approval of RSB is both an outstanding achievement for RSB and a major milestone for CORSIA, which completes CORSIA’s SAF framework. RSB’s CORSIA standard also represents a paradigm shift, moving from RSB’s original focus on sustainable biofuel volumes to a new focus on emissions reductions from the use of SAF for carbon markets.”

ISCC has also expanded the sustainability requirements for CORSIA eligible fuels with additional criteria that aims to protect water, soil, air, biodiversity and workers’ and land rights. “ISCC covers the complete set of CORSIA requirements, allowing economic operators at every point in a fuel’s supply chain to show their compliance with the CORSIA scheme by becoming ISCC CORSIA certified,” said the Germany-based certification body.

Commenting on the Council outcome on eligible units and sustainability certification schemes, ICAO Secretary General Dr Fang Liu said: “The steps that ICAO has taken to address climate change go hand-in-hand with our efforts to promote the sustainable growth and long-term prosperity of international aviation. CORSIA’s implementation elements are ready, and States and airlines are ready to make us of them.”

ICAO has launched a series of videos on ‘Navigating CORSIA’, which are guides to the scheme’s design and implementation.

IATA has formally launched the Aviation Carbon Exchange (ACE), a platform for airlines and other aviation stakeholders to offset their carbon footprint by purchasing credits in certified projects. Carbon reduction programmes on ACE include forestry projects, clean wind energy operations, protection of eco-systems and remote community-based projects to cut emissions. The platform has been under development since the beginning of the year and is aimed at providing a tool for airlines in fulfilling their offsetting obligations starting in 2021 under the ICAO CORSIA scheme. The impact of Covid-19 on the airline industry and a change to the CORSIA baseline means offsetting under the scheme is now unlikely to be required for at least several years but ACE will still be open to airlines wanting to invest in voluntary offsets. ACE was developed in conjunction with commodities trader Xpansiv CBL Holding Group and US carrier JetBlue has completed the first trade.

The Aviation Carbon Exchange becomes the first centralised, real-time marketplace to be integrated with the IATA Clearing House (ICH) for the settlement of funds on trades in carbon offsets. With an annual turnover of around $56 billion, IATA says the ICH provides a fast and secure billing and settlement services for the air transport industry and will ensure that ACE can guarantee payment and delivery of carbon credits.

Although ACE was conceived as a CORSIA tool, IATA still foresees a demand from airlines that have set net-zero emissions targets and those wishing to offset domestic operations, which are outside the scope of CORSIA.

“Airlines are serious in their commitment to reduce emissions. And they need a reliable tool to access quality carbon credits in real time,” said Director General Alexandre de Juniac at the IATA Annual General Meeting held virtually this week. “ACE will be a key tool helping airlines efficiently manage these important transactions.”

Added Sebastian Mikosz, IATA’s SVP for Member and External Relations: “ACE gives airlines access to top quality carbon offsetting schemes in real-time with full transparency. CORSIA is a key enabler of our long-term strategy to reduce emissions to half of 2005 levels by 2050, and this new platform will be of enormous benefit to our members and other industry stakeholders.”

In the first trade on the exchange, JetBlue purchased an undisclosed number of credits in the first phase of the Larimar wind farm project in the Dominican Republic, which began development in 2015 and when completed is expected to reduce average emissions by more than 200,000 tonnes of CO2 per year.

“Our planet is physically changing, as are the expectations of our customers, crew members and investors,” said Robin Hayes, CEO of JetBlue. “While our industry’s short-term priorities are focused on Covid-19 recovery, now is the time to rebuild operations in more sustainable ways such as adopting sustainable aviation fuels and setting clear strategies to reduce net aviation CO2 emissions. The Aviation Carbon Exchange will help us continue to meet our climate commitments by providing simplified and transparent access to legitimate, third-party certified carbon offsets.”

During the AGM, Hayes was appointed Chair of the IATA Board of Governors and his airline will host next year’s AGM in Boston. Also announced was the stepping down of Alexandre de Juniac as Director General and he will be replaced in April 2021 by the former CEO of International Airlines Group, Willie Walsh.

In a revised outlook for airline industry performance in 2020 and 2021, IATA expects the sector to experience a net loss of $118.5 billion in 2020, deeper than forecast in June, to be followed by a net loss of $38.7 billion next year. Passenger numbers are expected to plummet to 1.8 billion, 60.5% down on the 4.5 billion passengers in 2019. This, it says, is about the same number as carried in 2003. International markets have been hit disproportionately harder than domestic markets, which have been propelled by a recovery in Russia and China.

IATA’s Director of Environment, Michael Gill, told this week’s ICAO Green Recovery virtual seminar that the sector’s global CO2 emissions in 2020 would be around 330 million tonnes, a level last seen in 1977.

Meanwhile, Aviation Carbon Exchange’s partner CBL announced record volumes this week, having traded 25.2 million voluntary carbon offsets in the year-to-date, an increase of 235% over the same period in 2019.

Photo: First offset trade on ACE – the Larimar Wind Farm project in the Dominican Republic