According to the Intergovernmental Panel on Climate Change, aviation (domestic and international) accounts for approximately 2 per cent of global CO₂ emissions produced by human activity. In 2015, approximately 65 per cent of global aviation fuel consumption was from international aviation (see ICAO 2019 Environmental Report); applying this share to CO₂ emissions, international aviation is responsible for approximately 1.3 per cent of global CO₂ emissions.

The CORSIA has three phases: a pilot phase (2021 – 2023); a first phase (2024 – 2026); and a second phase (2027 – 2035). The difference between the phases is that the participation of States in the CORSIA offsetting in the pilot phase and in the first phase is voluntary, whereas the second phase applies to all ICAO Member States.

States that voluntarily decide to participate in CORSIA offsetting may join the scheme from the beginning of a given year, and should notify ICAO of their decision to join by June 30 of the preceding year. The figure below illustrates the different phases of CORSIA.

ICAO CORSIA Implementation Element is reflected in the ICAO document entitled "CORSIA States for Chapter 3 State Pairs" referenced in Annex 16, Volume IV.

The third edition of this ICAO document has been approved by the ICAO Council and contains the States that participate in CORSIA from 1 January 2023 and is available here:https://www.icao.int/environmental-protection/CORSIA/Pages/state-pairs.aspx

For a given year (starting in 2021), the States included in ICAO document entitled "CORSIA States for Chapter 3 State Pairs" define the State pairs subject to CO₂ offsetting requirements in CORSIA in that year.

Paragraph 10 of the Assembly Resolution A40-19 defines the coverage of the CORSIA offsetting on the basis of routes between States, with a view to minimizing market distortions between aeroplane operators on the same routes.

For this purpose, the approach is to provide equal treatment of all aeroplane operators on a given route. Specifically:

· A route is covered by the CORSIA offsetting if both States connecting the route participate in the scheme.

· A route is not covered by the CORSIA offsetting if one or both States connecting the route do not participate in the scheme.

It should be noted that the applicability of CORSIA offsetting requirements and the applicability of CORSIA monitoring, reporting and verification (MRV) requirements are not the same. Even if an international flight is not covered by the offsetting requirements, it is still covered by the MRV requirements. The figure below illustrates CORSIA’s route-based approach, and the applicability of MRV and offsetting requirements.

According to paragraph 10 of the Assembly Resolution A40-19, all international flights on the routes between States, both of which are not included in the CORSIA offsetting, are exempted from the offsetting requirements of the CORSIA, while retaining simplified reporting requirements.

The requirement to monitor, report and verify CO₂ emissions from international aviation is thus independent from the offsetting requirement.

The data reported by States will be used for the calculation of the CORSIA baseline, which is the average of 2019 and 2020 CO₂ emissions, as well as for the calculation of the aeroplane operators’ offsetting requirements, where applicable. This baseline will be revised after the decision of the 41^st ICAO Triennial Assembly.

In general, offsetting is done through the purchase and cancellation of emissions units, arising from different sources of emissions reductions achieved through mechanisms (e.g. UNFCCC’s Clean Development Mechanism), programmes (e.g. REDD+) or projects (e.g. substituting coal-fired stoves with solar cookers).

The buying and selling of eligible emissions units happens through carbon market. The price of the emissions units in the carbon market is influenced by the law of supply (availability of emissions units) and demand (level of offsetting requirements).

For CORSIA, an aeroplane operator is required to meet its offsetting requirements by cancelling CORSIA Eligible Emissions Units in a quantity equal to its total final offsetting requirements for a given compliance period. CORSIA Eligible Emissions Units are to be determined by the ICAO Council, and information on eligible units will be made available on the ICAO CORSIA website.

Paragraph 11 of the Assembly Resolution A40-19 addresses the distribution of the total amount of CO₂ emissions to be offset in a given year among individual aeroplane operators. Offsetting requirements will be calculated as follows:

a) From 2021 through 2029 a 100 per cent sectoral approach (and 0 per cent individual approach) will be applied. This applies to the pilot phase, the first phase, and the first compliance period of the second phase.

b) During the second compliance period of the second phase (2030 through 2032) at least 20 per cent of offsetting requirements would be calculated according to the “individual approach”. From 2033 to 2035, at least 70 per cent of offsetting requirements would be calculated according to the “individual approach”.

For each compliance period the State will sum up the offsetting requirements for each year within that compliance period, and the result will be the operator’s total offsetting requirement for that compliance period. The figure below describes the calculation of an aeroplane operator’s offsetting requirements.

Paragraph 15 of the Assembly Resolution A40-19 determines that CORSIA has three years compliance cycles, for which the operators need to reconcile their offsetting requirements.

The compliance periods are:

· Compliance period 1: years 2021 – 2023;

· Compliance period 2: years 2024 – 2026;

· Compliance period 3: years 2027 – 2029;

· Compliance period 4: years 2030 – 2032;

· Compliance period 5: years 2033 – 2035.

It should be noted that an operator will report its CO₂ emissions on an annual basis, corresponding to calendar years.

For the purposes of CORSIA, the sectoral baseline is defined as the average of total CO₂ emissions for the years 2019 and 2020 on the routes covered by CORSIA offsetting in a given year from 2021 onwards. This baseline will be revised after the decision of the 41^st ICAO Triennial Assembly.

From 2021 onwards, operators can reduce their CORSIA offsetting requirements by claiming emissions reductions from CORSIA Eligible Fuels.

In order to do this, the operator will:

· Use the amounts of CORSIA Eligible Fuels purchased, based on purchase records;

· Use the life-cycle emissions values to determine emissions reduction factors for each CORSIA Eligible Fuel;

· Obtain valid sustainability certification document; and

· Report and claim verified reductions of its emissions from the use of CORSIA Eligible Fuels to the State.

The State will calculate the operator’s total final offsetting requirements at the end of each compliance period by subtracting the emissions reductions from the use of CORSIA Eligible Fuels from the operator’s offsetting requirements during the compliance period.

The figure below provides an illustration of accounting the benefits from CORSIA Eligible Fuels.