The EU's and ICAO's diverging ambitions to reduce aviation's climate impacts

The report finds a substantial divergence in ambition between the EU ETS and CORSIA. While the EU ETS is moving toward 100% auctioning of allowances by 2026 and high carbon prices, CORSIA relies on offsetting emissions above a baseline, resulting in significantly lower emissions coverage and a much weaker price signal. The EU may expand the EU ETS to extra-EEA flights by 2027 if CORSIA is deemed insufficient to meet climate goals.

• The EU ETS and CORSIA differ fundamentally in mechanism: the EU ETS is a 'Cap and trade' system that sets a total emissions limit, while CORSIA is an 'Offsetting' scheme where operators invest in external projects to balance emissions.
• The EU ETS is phasing out free allowances for aviation operators, with a 25% reduction in 2024 and 50% in 2025, leading to the 'ultimate elimination of free allowances after 2026'.
• CORSIA's offsetting requirements are based on emissions exceeding a baseline, which was reduced to '85% of the 2019 CO2 emissions' from 2024. By 2030, emissions to be offset are estimated to represent only 15% of total reported MRV emissions.
• There is a vast disparity in carbon pricing: EU ETS allowances were around 80 EUR/tCO2 in 2023 and may reach 150 EUR/tCO2 by 2030, whereas ICAO estimates for CORSIA offsets were around 3 EUR/tCO2 in 2022, with projections to 7 EUR/tCO2 by 2030.
• The EU is introducing monitoring for non-CO2 aviation effects (such as NOx, soot, and contrails) starting in 2025, with a potential legislative proposal to expand the EU ETS scope to these effects before 2028. CORSIA currently does not monitor or account for non-CO2 emissions.
• CORSIA's effectiveness depends on state participation; while 126 states volunteered for the first phase, major non-participating states include China, the Russian Federation, India, Brazil, and Vietnam.
• The EU Commission will assess CORSIA's environmental integrity by July 1, 2026. If found insufficient, the EU may apply the EU ETS to emissions from departing flights from 2027 to avoid gaps in climate ambition.

APA

Pons, A., Horton, G., & Ong, H. (2024). The EU's and ICAO's diverging ambitions to reduce aviation's climate impacts. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2024/11/The-EUs-and-ICAOs-diverging-ambitions-to-reduce-aviations-climate-impacts.pdf

Chicago

Pons, Aleix, Gareth Horton, and Hugo Ong. The EU's and ICAO's diverging ambitions to reduce aviation's climate impacts. Carbon Market Watch, 2024. https://carbonmarketwatch.org/wp-content/uploads/2024/11/The-EUs-and-ICAOs-diverging-ambitions-to-reduce-aviations-climate-impacts.pdf.

Wikipedia

{{cite report |last1=Pons |first1=Aleix |last2=Horton |first2=Gareth |last3=Ong |first3=Hugo |title=The EU's and ICAO's diverging ambitions to reduce aviation's climate impacts |publisher=Carbon Market Watch |date=November 2024 |url=https://carbonmarketwatch.org/wp-content/uploads/2024/11/The-EUs-and-ICAOs-diverging-ambitions-to-reduce-aviations-climate-impacts.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{pons2024eus, author = {Pons, Aleix and Horton, Gareth and Ong, Hugo}, title = {{The EU's and ICAO's diverging ambitions to reduce aviation's climate impacts}}, institution = {Carbon Market Watch}, year = {2024}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2024/11/The-EUs-and-ICAOs-diverging-ambitions-to-reduce-aviations-climate-impacts.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }