The Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) is currently being rolled out by the UK Government. Soundings are being taken from the industry on how the UK emissions trading scheme “ETS” will work alongside other ETSs in different countries.

UK – CORSIA applies to:

• An aeroplane operator with annual emissions greater than 10,000 tonnes using aeroplanes, with a maximum certified take-off mass greater than 5,700 kg.

Who will be a UK aeroplane operator?

An aeroplane operator will be considered to be a UK operator under CORSIA if:

• (i) It has an ICAO Designator identifying the UK as the Notifying State
• (ii) has a valid Air Operator Certificate (or equivalent); or
• (iii) has its registered office in the UK, or where the operator is a “natural person” who is resident in the UK.

New start-up airlines will not be required to join the offsetting for the first three years.

Oversight of the scheme

The Regulator overseeing the emissions in the UK is the Environment Agency. This agency currently deals with pollution, waste control, water resources and flood risk management.

The UK regulations state that this Regulator is responsible for notifying operators of their offsetting obligations for the scheme and their final offsetting obligations for each three-year compliance period.

Calculation method

The proposed method of calculating the offsetting obligation is as follows:
Operators will need to purchase emission units “EEU” to offset excessive consumption.
An operator’s offset obligation will be based upon a comparison between the global total of in-scope CO2 emissions in one year against 85% of the 2019 baseline.
In the lead-up to 2033, an operators offset obligation will be calculated by reference to:

• (i) The change in the global total of in-scope aviation CO2 emissions (from 85% of the 2019 level).
• (ii) The proportion of such emissions emitted by the relevant aeroplane operator’s emissions, as compared to 85% of the 2019 emissions, are also to be factored into the equation.

Low Carbon Fuels

• (iii) CORSIA does not impose the use of low-carbon aviation fuels or set any targets for its use; it does suggest that operators may reduce the offsetting obligation through the use of Sustainable Aviation Fuel “SAF.”
• (iv) To qualify as a CORSIA-eligible SAF, the producer will most likely have to demonstrate that the fuel will achieve a net greenhouse gas emission of 10% compared to the baseline emissions values for aviation fuel on a life cycle basis.
• (v) Operators will need to acquire and then cancel sufficient EEUs to meet the aggregate offsetting obligation for each three-year compliance period. They will also need to submit an independently verified report to the Regulator.

Exposure for breaches

At the moment, the proposal is that there be a range of penalties which might be imposed by the Regulator.

The penalties are not yet fixed, but the proposal is that:

• There is a penalty of £100 for each CORSICA EEU that an operator fails to cancel on time.
• A penalty of up to GBP20,000 for failure to submit the required cancellation report on time.
• A daily penalty on top of that is also proposed of GBP500 – up to a maximum of GBP45,000.
  There are a range of other penalties still to be discussed.

The aviation industry can probably expect new companies to appear to support the EEU scheme.

Need Advice?

LA is one of the few law firms outside of London with an in depth understanding of aviation law, plus the expertise and experience to offer specialist advice.

For further enquiries, please get in touch with us at online.enquiries@LA-law.com or speak to our Aviation team directly.