As the aviation industry faces increasing pressure to reduce its carbon footprint, sustainable aviation fuel (SAF) remains an expensive and scarce option for widespread adoption. However, carbon offsets are emerging as an important interim solution to help airlines meet emissions reduction targets under global initiatives like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Experts from EcoSecurities and the International Air Transport Association (IATA) discuss how carbon offsets can help the industry bridge the gap while SAF and other technologies develop.
At VURDHAAN, we work with aviation companies to create effective carbon offset strategies that comply with international standards, such as CORSIA, while guiding them toward long-term sustainability goals.
The Urgency of Decarbonizing Aviation
Aviation remains one of the most challenging sectors to decarbonize, contributing around 2% of global carbon emissions. With growing demand for air travel, both passenger and freight, emissions are expected to rise, adding urgency to the industry’s decarbonization efforts. SAF offers significant potential for reducing emissions, but its high cost and limited supply—representing only 0.2% of global jet fuel consumption—means it cannot yet meet the industry’s needs.
Given this situation, carbon offsets provide an interim solution, allowing airlines to balance their emissions by investing in projects that reduce or remove carbon elsewhere. These offsets can help airlines meet regulatory requirements under CORSIA, which mandates that airlines offset emissions exceeding 85% of their 2019 levels for international flights.
At VURDHAAN, we help airlines develop comprehensive decarbonization strategies that include carbon offsets, ensuring they align with CORSIA’s requirements while preparing for the future adoption of SAF and other green technologies.
The Importance of Carbon Offsets Under CORSIA
CORSIA, initiated by the International Civil Aviation Organization (ICAO), is the first global scheme targeting international aviation emissions. Its phased implementation is already underway, with the first phase running from 2023 to 2026. During this time, airlines must offset emissions that exceed 2019 levels, making carbon credits an essential tool for compliance.
Pablo Fernandez, CEO of EcoSecurities, highlights that demand for CORSIA-eligible credits is projected to reach up to 160 million tonnes between 2024 and 2027, while the current supply is much lower, creating a potential supply-demand gap. To avoid rising prices, airlines are encouraged to adopt hedging strategies, such as securing early agreements for carbon credits.
At VURDHAAN, we assist airlines in managing these risks by helping them source high-quality carbon credits and structure long-term offset agreements. Our expertise in navigating global carbon markets ensures that our clients can meet their CORSIA obligations efficiently.
Overcoming Challenges in the Carbon Market
While carbon offsets offer a valuable solution, challenges remain in ensuring the integrity of the credits used. CORSIA requires that carbon credits are certified to prevent double counting and ensure accurate reporting. However, only a few programmes, such as the American Carbon Registry and REDD+ transactions, currently meet these standards, contributing to the limited supply of eligible credits.
The introduction of Article 6 under the Paris Agreement could provide a framework for countries to cooperate on carbon markets, potentially expanding the supply of credits. This development would allow airlines to tap into a broader range of verified credits, ensuring compliance while supporting global emissions reductions.
At VURDHAAN, we are closely monitoring these regulatory changes and assisting airlines in aligning with both CORSIA and emerging frameworks like Article 6. Our goal is to help airlines navigate the complexities of carbon markets while securing sustainable, high-quality credits.
Preparing for the Future: Beyond Offsets
While carbon offsets offer a temporary solution, the long-term decarbonization of aviation will require more sustainable technologies, such as SAF and green hydrogen. SAF, in particular, is seen as a critical component of the aviation sector’s transition to net-zero emissions by 2050. However, current SAF production remains costly and limited, and scaling up will take time.
In the meantime, carbon offsets will continue to play a vital role in bridging the gap, but airlines must also invest in new technologies to reduce their reliance on offsets over time. At VURDHAAN, we support our clients in balancing short-term compliance with long-term innovation, guiding them through the complexities of SAF adoption, fleet upgrades, and infrastructure improvements.
Conclusion: Carbon Offsets as Part of a Holistic Decarbonization Strategy
As the aviation industry works toward its 2050 net-zero goals, carbon offsets will remain an essential tool in the near term. However, to truly decarbonize, the industry must continue investing in SAF, green hydrogen, and other technologies that offer long-term solutions to reducing emissions. By strategically using carbon offsets while supporting the development of sustainable fuel alternatives, airlines can make steady progress toward their sustainability targets.
At VURDHAAN, we are committed to helping the aviation industry navigate this complex journey. From carbon offset strategies to SAF adoption, we provide the expertise and guidance needed to achieve meaningful emissions reductions while preparing for a more sustainable future.