Could the Clock Restart? Aviation’s Carbon Dilemma Between CORSIA and the EU ETS
Global Pressure on Aviation’s Carbon Commitments
International aviation has become one of the most scrutinized sectors in the climate debate. The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), established by the International Civil Aviation Organization (ICAO), is intended to stabilize carbon emissions from international flights at 2019 levels. Airlines must purchase eligible emissions units (EEUs) to offset any growth beyond this baseline, creating a significant demand for verifiable, high-quality offsets. With the first mandatory compliance phase underway and deadlines set for early 2028, the aviation sector is under pressure to build robust monitoring, reporting, and offsetting systems in record time.
Risk of an EU ETS Comeback
The European Union has made it clear that its patience is not unlimited. Back in 2012, the EU suspended the application of its Emissions Trading Scheme (ETS) to long-haul flights after global pushback, most notably from China and the United States. This “stop the clock” decision was made to allow space for a global mechanism—CORSIA—to take root. But if CORSIA is viewed as inadequate or poorly enforced, the EU could decide to reapply the ETS to all flights to and from the European Economic Area (EEA). Such a move would have profound consequences, as ETS compliance costs are currently around €72 per tonne of CO₂e, compared with US$16–18 per tonne for CORSIA-compliant offsets. In practical terms, this could mean carbon costs up to four times higher for airlines operating in Europe.
How CORSIA Works
CORSIA requires participating airlines to purchase offsets that meet ICAO’s strict sustainability and additionality standards. These units are designed to represent real, verifiable carbon reductions in sectors such as reforestation, renewable energy, or community-based projects in developing countries. The system is not only about cost containment but also about channeling funding toward climate-positive activities in the global south that might otherwise lack investment. Yet challenges remain: the supply of “low-hanging fruit” such as cook stove replacements or mangrove restoration is finite, and as these cheaper projects reach their limits, EEU prices are expected to climb.
A Growing Compliance Burden
Unlike voluntary carbon schemes, CORSIA is a mandatory requirement, and the clock is ticking. Airlines now face a steep learning curve as they build compliance teams, negotiate long-term offset agreements, and integrate carbon markets into their financial planning. Many operators have traditionally focused on reducing fuel burn through efficiency gains, but the new reality demands deeper engagement with carbon accounting, offset sourcing, and regulatory compliance. The complexity of ICAO’s Standards and Recommended Practices (SARPs) means carriers cannot afford to delay their preparations.
The European Calculation
European regulators will review CORSIA’s progress in 2026, and the decision could redefine the landscape of aviation carbon regulation. The ETS has already proven its effectiveness by cutting industrial emissions in Europe by nearly half compared to 2005 levels. This success story strengthens the EU’s argument that strict carbon pricing works and undermines any tolerance for what it perceives as a watered-down global scheme. The big question is whether the EU would apply the ETS to the entirety of long-haul flights or only to the portion of the journey within EEA airspace. Either way, the financial risk to airlines is substantial.
Managing Carbon Costs Strategically
To prepare for potential volatility, airlines are increasingly considering early action strategies. These include securing long-term agreements with trusted EEU providers, investing in nature-based solutions, or even exploring carbon removal technologies. Locking in offsets at today’s lower prices may shield operators from future cost spikes. More importantly, such strategies help airlines demonstrate climate responsibility to regulators, investors, and the flying public. With consumer trust at stake, proactive action can become a competitive advantage in an industry facing growing climate scrutiny.
Beyond Compliance: A License to Grow
The stakes for aviation extend beyond regulatory fines or offset costs. Failure to implement CORSIA effectively could trigger a patchwork of overlapping carbon regimes, creating unequal competition between regions and undermining the sector’s ability to grow sustainably. Airlines that fail to adapt risk not only higher operating costs but also reputational damage and loss of market access. By contrast, operators that act decisively—embracing robust compliance systems and credible offset strategies—can protect their license to operate, stabilize costs, and contribute to meaningful climate progress.
Conclusion: No Time to Waste
The aviation sector stands at a crossroads. CORSIA offers a chance for a unified, global approach to carbon regulation, but its credibility depends on strict enforcement and genuine emissions reductions. If the scheme falters, the EU ETS looms as a costlier and more fragmented alternative. For airlines, the message is clear: act now, prepare for compliance, and invest early in sustainable offset strategies. The clock may have been stopped once before, but this time, it is unlikely to be reset.
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