KUALA LUMPUR, Sept 29 — The International Air Transport Association (IATA), together with carbon market stakeholders, is urging governments worldwide to address the extremely limited supply of carbon credits available to airlines.
These credits are essential for airlines to fulfil their obligations under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The signatories specifically urged governments to issue Letters of Authorisation (LOAs), which enable the release of CORSIA-eligible emissions units (EEUs) for purchase by airlines, according to a joint statement by IATA and the stakeholders released at the 42nd International Civil Aviation Organisation (ICAO) Assembly in Montreal, Canada, today.
According to the release, the timely issuance of LOAs is key to creating a robust and transparent market for CORSIA EEUs, facilitating the successful implementation of CORSIA as well as safeguarding the environmental integrity of international aviation’s climate commitments.
“IATA forecasts that airlines will require between 146 and 236 million EEUs during CORSIA’s first phase (2024 to 2026). However, the current supply of CORSIA-eligible units is limited to the 15.8 million credits made available by Guyana,” said the statement.
LOAs are official documents issued by host countries authorising the use of carbon credits (known as Internationally Transferred Mitigation Outcomes, or ITMOs) for CORSIA compliance, according to the provisions of Article 6 of the Paris Agreement.
The letters confirm the emissions reductions associated with a carbon credit will only be counted once, as part of CORSIA, by requiring the host country to apply a “corresponding adjustment” to its own Nationally Determined Contribution.
Without LOAs, airlines face a shortage of CORSIA-eligible units, placing CORSIA in jeopardy and depriving project developers of airline funds as a source of climate finance.
To assist states in issuing LOAs, IATA has published guidance documents and offers practical tools and workshops, the statement said.
CORSIA is a scheme to mitigate carbon dioxide emissions for the global aviation industry.
Malaysia has been participating voluntarily in CORSIA with 104 other countries since July 2022, while also being involved in efforts to include oil palm biomass as part of the CORSIA Eligible Fuel Criteria in 2021.
