The International Air Transport Association (IATA) has jointly announced it will be teaming up with Xpansiv CBL Holding Group (XCHG), a commodity exchange company, to provide a common marketplace called The Aviation Carbon Exchange, for eligible emission units.
While passenger growth is predicted to grow, airlines are aiming to cap CO2 emissions at 2020 levels through adopting a global carbon offsetting plan. The plan, known as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), is the first of its kind for a single industry in response to climate change. “We expect airlines from all over the world to participate,” XCHG President and Chief Operating Officer John Melby, who has worked with individual airlines and carbon markets for some time, told Reuters news agency.
Currently commercial aviation is responsible for 2% of carbon emissions across the world, but airlines are taking proactive measures to reduce their carbon footprint by exchanging conventional jet fuel for biofuels, though these are both costly and currently in short supply. Thus, airlines will be able to offset their carbon emissions by purchasing carbon credits from designated environmental projects around the world, which will be available through the exchange, which enters a pilot phase in the current quarter. It will be powered by XCHG’s CBL Markets with real-time data, and airlines will pay a fee for each transaction.
CORSIA is expected to provide more than US$40 billion in funding for climate projects and offset 2.6 billion tons of C02 emissions between 2021 and 2035.
