Together with carbon capture technologies, offsets will contribute up to 19% of the emissions reductions needed in 2050. In fact, it is estimated that 3–5 billion offsets will be required up to 2050.
But offsets have come under scrutiny in recent months with some observers considering them a license to pollute. Their argument is that if airlines have enough money to spend on offsets, they will continue with carbon emitting procedures and technologies.
“But this perception is wrong,” says Michael Schneider, IATA’s Assistant Director, Aviation Environment. “For a start, aviation is the only industry to come up with a target and plan to get to net zero by 2050. Carbon offsets are a gap filler and just one part of the plan. Most of the CO2 reduction will result from the industry’s huge investment in new technologies, especially sustainable aviation fuels (SAF).
“Moreover, the right offsets are not about compensation for emissions but about contributing to emission reduction with many of the offset projects offering socio-economic co-benefits for local communities,” he adds. “The industry wouldn’t be involved in offsets that aren’t effective.”
A project promoting cooking stoves in Ghana highlights the point. Not only do these efficient cooking stoves reduce carbon emissions but also they significantly reduce toxic fumes within homes. Moreover, because the stoves are produced locally, they are stimulating the local economy and creating jobs.
Indeed, the Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) is known for having some of the toughest eligibility criteria in the sector. That is the result of years of hard work by expert groups and with participation of environmental NGOs at the ICAO level, essentially making aviation offset projects state approved. Carbon offset standards and programs are independently reviewed by the Technical Advisory Body (TAB) to ensure that projects are meeting the stringent environmental integrity criteria under CORSIA.
The flip side to the strength of aviation offset projects is that other industries are drawn to this stamp of approval. As the corporate world increasingly looks to offsets, for example, CORSIA-sanctioned offset projects are considered desirable for their robustness.
Though this has led to some projects being “sold out” and others being snapped up by speculators, thereby forcing significant price rises in the short term, Schneider is confident that demand and supply will balance out.
“Where there is demand, there will also be supply,” he says. “It’s simple market forces. It’s also a good opportunity for project developers. It should lead to innovative and charismatic offset projects in the near future.”
The carbon market, which will have a strong influence on pricing, is also evolving quickly. Market intelligence is still sparse, however, and this makes it difficult for airlines to budget as it’s almost impossible to ascertain the price of an offset at any given future time.
IATA’s Aviation Carbon Exchange is helping. ACE is a centralized marketplace for CORSIA-eligible offsets where airlines and other aviation stakeholders can trade CO2 emission reductions for compliance or voluntary offsetting purposes. Even so, time and experience will prove the biggest boon.
Associated with carbon-reducing offset projects are carbon capture technologies. Essentially, both are concerned with carbon dioxide removal (CDR). Net zero means every gram of carbon must be removed from the atmosphere. That means taking aviation’s emissions, capturing them, and storing them such that they can’t escape back into the atmosphere.
This nascent technology has limited capacity currently but the potential for CDR is enormous.
“The technology is maturing rapidly, and it could be a significant contributor to the 2050 net zero goal,” says Schneider. “At the moment it is expensive but that will change.”
Direct air capture and carbon storage would also play an important role in other aspects of the 2050 roadmap. Power-to-Liquid SAF uses captured CO2 to generate drop-in liquid hydrocarbon fuel. And whereas established SAF pathways represent up to 80% CO2 reduction over their lifetime, PtL SAF gets close to 100%.
“There are going to be some interesting developments in CDR,” says Schneider. “The cost is about $600-$900 per ton of CO2, which is obviously far more expensive than an offset. We are probably about a decade out before the technology scales up sufficiently for price parity.”
SAF aside, most other technologies that will assist aviation’s 2050 net zero ambition will only become widely available from 2035 onwards. Hybrid-electric engines are beginning to be tested but their certification and use on commercial flights will take time. Hydrogen propulsion, another major hope, is progressing quickly but has a number of challenges to overcome, including its requirement for infrastructure changes. SAF, too, must still undergo improvements, most especially a massive ramp up in production.
“The point is that carbon offsets are not aviation’s only tool to achieve net zero in 2050,” concludes Schneider. “They can have an immediate impact, however, and though their importance will diminish as other technologies come online, every offset will be robustly assessed to ensure it makes a positive contribution to emissions reduction.”