Aviation and Carbon Markets: Charting the Path Forward

As air travel continues to grow, the aviation industry faces the challenge of reducing its carbon footprint. A Statista report reveals that global flights emitted 70.6 million metric tons of CO2 in June 2024, emphasizing the urgent need for sustainable practices in aviation.

The report tracks global aviation CO2 emissions from January 2019 to June 2024, showing fluctuations in emissions as air traffic levels have changed over time.

This article explores the strategies airlines are using to address this challenge, including carbon offset programs and innovative technologies, as well as global frameworks like CORSIA driving the industry towards a more sustainable future. Understanding both the scope of the issue and the efforts in progress is essential for building a greener aviation sector.

How Airlines Are Offsetting Carbon Emissions: Insights Backed by Data

The aviation industry is responsible for around 2-3% of global CO2 emissions annually (IEA 2024). To address this environmental impact, airlines are increasingly investing in carbon offset programs. Based on data from Verra, this article explores how airlines are offsetting their emissions and the regulations driving these efforts.

Why Airlines Are Offsetting Their Carbon Emissions

Airlines offset their emissions for several key reasons. One of the primary drivers is regulatory compliance. Programs like the EU Emissions Trading System (EU ETS) and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) require airlines to offset emissions that exceed certain limits. These regulations compel airlines to participate in global carbon offset programs to meet mandatory environmental targets.

In addition, corporate responsibility and market expectations play a significant role. With increasing consumer demand for sustainable practices and growing pressure from investors, airlines are choosing to offset their emissions to meet sustainability goals and remain competitive in the market.

Regional Insights on Airline Carbon Offsetting

In Europe, airlines meet national regulations such as Article 147 of France’s Climate and Resilience Law. In 2023, European airlines retired 270,107 carbon credits to offset emissions for the calendar year, ensuring compliance with local environmental regulations. This proactive approach demonstrates how airlines are addressing their carbon footprint as part of their broader sustainability commitments.

In the United States, airlines offset 38,784 carbon credits, aligning with CORSIA requirements and reinforcing their commitment to sustainability.

In Turkey, airlines offset 8,089 carbon credits tied to major industry events, such as the IATA Annual General Meeting & World Air Transport Summit 2023, reducing the environmental impact of such gatherings.

In Asia, airlines have supported renewable energy projects and other initiatives to meet CORSIA and EU ETS requirements. Asian airlines have offset a total of 5,332 carbon credits. Projects like the FSW AMMS GHG Mitigation Project in China and the KOYULHISAR Hydroelectric Power Plant in Turkey are key examples, helping airlines reduce reliance on fossil fuels and contribute to clean energy development.

According to the Verra report, a total of 322,312 carbon credits were offset across these regions during 2023-24, showcasing airlines' commitment to reducing their carbon footprint.

In India, BRSR reports revealed the efforts of two leading airlines. The passenger airline offset 8,414,458.31 metric tons under Scope 1 and 12,427.97 metric tons under Scope 2, totaling 8,426,886.28 metric tons. The cargo airline offset 147,284 metric tons under Scope 1, 15,639 metric tons under Scope 2, and 284,238 metric tons under Scope 3, amounting to a total of 447,161 metric tons. Both airlines have fully offset their emissions, setting a strong example in the aviation industry for sustainability.

Latest Updates from CORSIA:

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), spearheaded by the International Civil Aviation Organization (ICAO), has taken a transformative leap with the release of updated eligibility criteria for carbon registries. This pivotal move clarifies the landscape for market participants, enhancing the credibility and transparency of carbon offsets used by the aviation industry to meet decarbonization targets and setting the stage for significant demand for carbon offsets.

What’s new? 

In addition to the already approved American Carbon Registry (ACR) and Architecture for REDD+ Transactions (ART), ICAO’s Technical Advisory Body (TAB) has added 4 new standards: 

• Verra's VCS 

• Gold Standard (GS) 

• Climate Action Reserve (CAR) 

• Global Carbon Council (GCC)

However, the new criteria also introduce challenges, such as excluding two-thirds of existing projects with Letters of Approval (LoAs), particularly those involving cookstoves under VCS, thereby limiting offset options for airlines. By focusing on high-integrity methodologies like soil carbon and improved forest management, CORSIA aligns with global carbon neutrality goals but raises critical questions about scalability and the capacity of eligible projects to meet burgeoning demand in the aviation sector.

The aviation industry plays a major role in global carbon emissions, with emissions falling under three categori

• Scope 1: Direct emissions from owned or controlled sources.

• Scope 2: Indirect emissions from purchased electricity.

• Scope 3: Emissions from the supply chain and product use.

For airlines, Scope 1 emissions from fuel use are significant, but Scope 3 emissions, such as those from fuel production and business travel, also contribute greatly to their carbon footprint. Addressing both is crucial for achieving comprehensive sustainability.

Scope 3 emissions those indirect emissions from fuel production, supply chain activities, and business travel are some of the biggest challenges airlines face when reducing their carbon footprint. 

At BNZ Green we’re making it easier for airlines to take meaningful action.

Our marketplace BNZ X facilitates the purchase of Carbon credits. We provide access to a global inventory of carbon credits, aligned with CORSIA requirements, so airlines can offset their emissions while supporting impactful renewable energy and forestry projects worldwide.

Our customized Green API solutions are tailored to each airline’s needs, helping manage emissions across supply chains and logistics. Whether it’s partnering with suppliers or addressing emissions tied to operations, we create strategies that deliver real results.

With our partnership with EaseMyTrip, we’re taking things further, simplifying carbon offsetting in the travel and tourism sector. This collaboration strengthens the industry’s ability to take control of its emissions. Read more about this partnership here.

By investing in renewable energy and forest conservation, we’re not just offsetting emissions we’re also helping airlines contribute to a more sustainable future. At BNZ Green, we’re here to make the journey toward carbon neutrality smoother for everyone.

References:
https://www.statista.com/statistics/1500409/global-aviation-co2-emissions-by-month/#statisticContainer 
https://www.iea.org/energy-system/transport/aviation