{"id":5787,"date":"2024-07-04T14:29:26","date_gmt":"2024-07-04T13:29:26","guid":{"rendered":"https:\/\/www.greenairnews.com\/?p=5787"},"modified":"2024-12-05T19:34:24","modified_gmt":"2024-12-05T19:34:24","slug":"commentary-airline-industry-faces-carbon-credit-shortage-in-net-zero-push","status":"publish","type":"post","link":"https:\/\/www.greenairnews.com\/?p=5787","title":{"rendered":"COMMENTARY: Airline industry faces carbon credit shortage in net-zero push"},"content":{"rendered":"\n

A lack of direction from governments worldwide, specifically in relation to the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA<\/a>), has left potential buyers in the Voluntary Carbon Market (VCM) in the dark, with many choosing instead the route of doing nothing \u2013 avoiding any potential complications or mis-purchases. However, the good news for buyers looking to invest in the VCM is that both the communication and regulatory landscape around carbon markets are improving, writes Tatiana Feuerhahn<\/em>. We are seeing market proponents pushing for greater guidance in the VCM regarding what constitutes a \u201chigh quality\u201d carbon credit, with the recent development by the Integrity Council for the Voluntary Carbon Market (ICVCM) of the Core Carbon Principles<\/a> (CCPs) being a perfect example. We have also officially entered Phase I of CORSIA in 2024, with the aviation industry expecting greater guidance from the International Civil Aviation Organization (ICAO) in the latter half of the year regarding eligible emissions units (EEUs). <\/strong><\/p>\n\n\n\n

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As a result, there is growing confidence among buyers. This increased clarity should boost demand and, as the price of carbon rises, make more projects financially viable. These initiatives coupled with the recent announcement<\/a> by The White House, which has set out plans to develop robust standards for buyers and sellers of carbon credits in the VCM to help tackle ‘greenwashing’ and unlock green investment, will all help boost market sentiment and ensure that carbon markets can effectively support ambitious and credible climate action.<\/p>\n\n\n\n

Aviation stands as a unique leader, being the only industry among the hard-to-abate sectors \u2013 such as steel, chemicals and cement, where it\u2019s more difficult to lower greenhouse gas emissions \u2013 committed to achieving net-zero carbon emissions by 2050. This ambitious goal is accompanied by significant compliance obligations. ICAO requires airlines to mitigate most of the growth in their emissions beyond a 2019 baseline with eligible carbon credits. This requirement, a key facet of CORSIA, will become mandatory for all international operators, with a few exemptions<\/a>, from 2027, following the current voluntary adoption phase.<\/p>\n\n\n\n

Despite the sector’s strides towards reducing emissions through sustainable aviation fuel (SAF) and operational efficiencies, the current availability of SAF falls dramatically short of what is needed to power global commercial airlines, even for a single day. For instance, the recent deal by Emirates delivering 300,000 gallons of blended SAF from Shell Aviation to Dubai marks progress, but the lack of scaled availability is evident for today\u2019s emissions. Moreover, the current regulations cap the maximum blend of SAF with conventional jet fuel at 50%, and most airlines use far lower proportions due to cost and supply constraints.<\/p>\n\n\n\n

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Carbon credit challenges<\/strong><\/p>\n\n\n\n

In order for the airline industry to meet its net-zero aspirations and current capabilities it must explore comprehensive strategies, including carbon offsetting, to bridge the gap. Currently, the demand for CORSIA-eligible products is expected to significantly outstrip supply by the end of the decade. Analysis by Abatable<\/a> forecasts that demand could be between seven and fourteen times greater than supply, depending on the actions airlines take to cut emissions, as well as the development of eligible carbon registries and projects. This anticipated shortage underscores the urgency for airlines to improve their operational efficiencies and invest in new technologies. Yet, with major advancements like large-scale hydrogen storage and electric passenger planes still years away from being commercially viable, carbon credits remain a critical tool in the journey to net zero.<\/p>\n\n\n\n

They provide a viable interim solution while technological advancements and increased SAF production capacities are developed. But navigating the environmental commodities market can be complex and challenging, particularly with the intricacies of CORSIA eligibility and the broader carbon market.<\/p>\n\n\n\n

By working with a carbon market trading and advisory desk that is dedicated to assisting the aviation industry in its transition to a sustainable future, the industry can overcome the hurdles of decarbonisation and achieve its net-zero emissions goals. It can access expert advice on how to approach and manage emissions reduction efforts effectively, facilitate the acquisition and management of carbon credits, renewable energy certificates (RECs) and SAF credits, ensuring compliance and progress toward sustainability goals.<\/p>\n\n\n\n

If the aviation industry leverages the existing expertise in carbon markets and sustainability, they can streamline emissions reduction efforts and meet the ambitious net-zero goals, contributing to a more sustainable future.<\/p>\n\n\n\n

The aviation industry\u2019s commitment to net-zero emissions by 2050 is a bold and necessary step towards combating climate change. However, the journey is fraught with challenges, particularly in the realm of carbon credits and sustainable fuel supply. The VCM will be instrumental in transitioning the aviation sector towards environmental sustainability.<\/p>\n\n\n\n

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