A proposal from ICAO

Environmental Economic measures

As part of the ongoing negotiations at ICAO, a draft proposal for a global offsetting scheme has been developed to help the discussions focus as the ICAO Assembly draws closer. This will be used to help shape the discussions and, whilst it is not the final agreement, it does provide some great momentum for the talks.

Countdown to the ICAO Assembly

As ATAG Executive Director Michael Gill says: “The draft proposal delivers much-needed impetus to the discussions. Although negotiations between governments will continue over the details of the agreement, this draft is a significant and welcome step. We urge governments to keep in mind the principles of simplicity, environmental integrity, cost-effectiveness and the need to avoid market distortion as they shape the agreement. Whilst we understand the political sensitivities of these talks, the industry would like to see an agreement with broad coverage of aviation emissions.”

So, what does the proposal do? It outlines the possible shape of the global market-based measure. It should be remembered that this is just a proposal and remains subject to government negotiation.

The key points of the proposal include (in very simple terms):

  • A global market-based measure will be developed in the shape of a global offsetting scheme for international flights. For a breakdown on how offsetting schemes work, see our handy infographic.
  • It will start from 2020 (the first year of obligations will be from 2021) and will offset emissions above 2020 levels.
  • In order to recognise the different situations and circumstances of States, the mechanism will be deployed in phases. In the first phase, which starts in 2021, only flights between countries that account for the largest share of aviation emissions and / or countries with a high average income will be included.
  • In the second phase, from 2026, additional routes will be added to cover about 95% of emissions.
  • Flights to and from the majority of Small Island Developing States, Least Developed Countries and Land-Locked Developing Countries as well as other States with low average income and marginal aviation activities will continue to be exempt.
  • To ensure that there is no competitive distortion, all airlines, no matter where they are based, will be exempt from routes to and from countries that are exempt: airlines will be treated the same on each route.
  • The scheme is based on a “100% sectoral” obligation. In other words, individual airlines will have to offset a proportion of the industry’s growth above 2020 levels. The share assigned to each airline will be proportional to its total CO2 emissions. This is a way to reflect past contributions to CO2 emissions and to prevent a negative impact on emerging and fast-growing aviation markets. However, it does mean that some slower-growing airlines must pay more.

Now, the proposal goes into a lot more detail and, as we have already mentioned before, this all remains subject to negotiations at ICAO. We’ll need to see how these talks progress in the next six months!