U.S. airlines are required to spend tens of millions of dollars in dubious carbon offsets each year under the Carbon Offsetting and Reduction Scheme for International Aviation. What happens if the Trump administration stops enforcing this requirement?
That’s what Flexport CEO Ryan Petersen expects:
I expect the US to leave the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) soon, saving US airlines tens of millions annually.
— Ryan Petersen (@typesfast) February 3, 2025
What Is CORSIA?
CORSIA isn’t a treaty, and not something to ‘pull out of’. It’s an ICAO program, and member states choose to participate. The U.S. government could decide not to implement or enforce CORSIA for flights involving U.S. carriers.
Currently, airlines monitor and report their annual international CO2 emissions, and if they exceed the average of 2019 and 2020 levels, they have to purchase carbon offsets to counter the excess. This doesn’t apply to domestic flights.
In addition to the cost of the offsets, airlines incur expenses for emissions tracking, reporting, and verification systems. And this is meant to be expensive, because it encourages investment that reduces emissions to reduce this program’s cost (e.g. fuel-efficient aircraft, alternative fuels, operational changes that reduce emissions).
Why Are The Carbon Offsets Questionable
In 2020, Delta – which flies older, less-fuel efficient planes and owns an oil refinery – claimed to be carbon neutral.
Carbon offsets not only often do not offset carbon, but can increase emissions. For instance, a non-profit may already own forest land. Its mission may be to preserve the forest, so almost by definition it won’t chop down those trees. So it sells credit for saving that forest. And a company claims to have ‘offset’ their emissions by saving these trees that were never going to be cut down to begin with. It’s like permission to pollute.
Delta used to brag about its involvement with the Kariba project in Zimbabwe. Bloomberg‘s Matt Levine calls the folks involved “ESG Consultant[s] But Evil.”
As Levine explained, “(1) the money kind of disappeared and (2) a lot of the carbon credits turned out to be fake.” The New Yorker‘s Heidi Blake has the owner of the forest generating the credits on the record, “I don’t know what you’re going to report on this, and I hope to God it’s not all of it, because I probably will go to jail.”
It turns out that they sort of made up numbers as a benchmark for how much deforestation would have happened without a forest’s preservation. There was a reference forest nearby and it basically showed not so much deforestation was happening without the preservations. So the credits weren’t really protecting forests. And they oversold the credits. Matt Levine:
The problem with this anti-deforestation project was that there was too little deforestation. That seems good? For the climate? But bad for the people hawking carbon credits. The idealistic Muench pointed out the problem, and the now-jaded Heuberger was like “meh still fine”:
Greenwashing in the extreme, but that was always the point. And virtue signaling over the environment shouldn’t take precedence over doing things that actually address environmental problems.
What Happens If The U.S. Stops Requiring These Offsets?
The first order effect is that airlines could stop buying carbon credits to offset international flights (and doing all the bureaucratic tracking needed for their reporting). That could save a given airline tens of millions of dollars each year, though there’s no consensus figure and airlines don’t separately report out these numbers.
It’s also worth noting that if the Trump administration were to simply allow for non-compliance (suspend enforcement), airlines might worry about future costs if the regulatory environment shifts – the next Democratic administration might punish the non-compliance that had been sanctioned by the Trump administration? So it’s worth considering that airlines might still maintain their record-keeping and carbon credit purchasing. That also lets them keep greenwashing, which has narrative value even if seemingly less in the current context.
The second order effect of non-compliance with CORSIA, though, is that foreign governments might impose market access limitations on airlines from countries that don’t comply. They could make compliance a requirement for flying into their country.
Could they do that under Open Skies treaties with the U.S.? Maybe. U.S. carriers could argue that applying environmental conditions they aren’t subject to at home is discriminatory, but these treaties don’t generally prohibit a country from imposing its own environmental standards on incoming traffic (provided there’s no preferential treatment for airlines in their home market). Market access restrictions as a penalty for non-compliance wouldn’t automatically constitute a violation unless the conditions clearly breach agreed non-discrimination rules.
So What Happens Next?
My hunch is that airlines aren’t clamoring for the Trump administration to suspend enforcement of CORSIA. It leads to too much uncertainty. They might even still comply in the absence of enforcement, but that could subject them to criticism from the Administration and also shareholder lawsuits they’d have to defend against.
C’mon, eh? My carbon taxes are the answer! Pay them, or else we will hit you with a Tim Hortons and maple syrup embargo!
All virtue signaling should be eliminated. It is the essence of the agenda of certainly the D and R parties. D’s love to waste cash; R’s love to get in peoples business. All sad, all the way around.
CORSIA is a ridiculous program to begin with because of the way it treats legacy emissions as a baseline and penalises new entrants significantly to the benefit of incumbents. I have written extensively about it, going so far as to call it an attempted genocide of Africans by forcing them onto unsafe roads by adding taxes on safer air travel.
I respect Gary’s nuanced take here–aviation is one of the most challenging industries to decarbonize.
To those still denying it, climate change and global warming are indeed real, not a ‘Chinese hoax,’ and we should all care about this since we all live ‘here.’ Please don’t bring a snow-ball into the Senate again–that was just silly.
To those who accept that it’s real, but think we can’t do anything about it–Stop the doomerism. It’s still worth fighting for healthy air, water, and food, animal welfare, and for future generations to live a good life.
To those that only care about self-interest, see the Wall Street Journal’s article today on ‘Climate Change to Wipe Away $1.5 Trillion in U.S. Home Values.’ Your property is at risk. We’re going to need to innovate–and there’s money to be made along the way. Time to get to work!
Most have never heard of CORSIA–but, we have heard of the Paris Climate agreement (remember, ‘Pittsburg, not Paris’), so that’s probably why He ‘dealt’ with that first. His team will get to CORSIA soon enough, especially now that Gary at VFTW talked it up, for sure.
Recall that He literally requested $1 billion in contributions from oil and gas as a ‘quid pro quo’ so they can do ‘whatever they want’ to ‘drill, baby, drill’ on our public lands. Goodbye parks and reefs.
Ironically, He did receive a $5 million donation from Timothy Dunn, the Texas oilman, but I doubt that’s the same @Tim Dunn that comments on here regularly–if it is, well then, sir.
Some of you ‘may be on our way out’ soon and think this isn’t your ‘problem’–But it’s already happening. We should have done so much more so much sooner for posterity alone.
‘Because their oceans rose and their rivers ran dry.’
@Joseph It’s definitely not a ‘both sides’ issue–sure, one side isn’t doing enough, but the other is actively harming the situation. I can agree with no more ‘greenwashing,’ please.
@Sean M. Maybe don’t call it a genocide–you cheapen that very serious word. I’ve traveled extensively throughout Africa, and there are fine roads there, too. Of course, greater foreign aid and substantial investment in modern infrastructure is sorely needed. Specifically, in Rwanda, which had an actual horrific genocide 30 years ago, the roads today are excellent. Not exaggerating. You should visit Kigali and see the gorillas at Volcanoes National Park. Ideally, if we ‘do something’ about climate change, these wonderful things should still be around. Safe travels.
Man-made climate change, like all other government scams, is nothing more than a power grab. Historical records demonstrate that we have little effect on the climate, if any.
Green theater.
@Mike P
So, is that outright denial, or you simply don’t think it’s our fault? Either way, you seem to think you’re immune to the disruption. No fire, flood, hurricane, extreme heat, or mass migration affecting you, sir. He’s the only one.
We have enough of home insurance increases due to the floods and fires from climate change.
The solution is to fix carbon credits so there’s no doubts, not to allow airlines to make our insurance go up, a form of subsidy.
Damages must be paid busy those who do them!!
@jns
I agree that ‘greenwashing’ is a farce–especially, by the airlines–but if you are suggesting that climate change is not real, then, unfortunately, this ‘show’ will go on, whether we ‘believe’ in it or not.
@Mary
I feel for you–personally, I divested from Florida for that reason–had enough of property insurance premiums doubling each year, if the companies didn’t pull out of the area/state altogether. So glad to have escaped before the next major hurricane. Whether we like it or not, it’s going to affect us all. We’d better prepare for it.
1990
I am neither an oilman or a Texan
@Tim Dunn
Noted. Thank you.
I couldn’t care less about carbon offsets or the environment. Won’t impact humanity meaningfully for thousands of years (keep in mind the earth has been here for hundreds of millions of years). Anything to reduce costs NOW for consumers I am in favor of. Mortgage the earth.
@1990. Of course we should not do carbon offsets if they’re bogus — and there is plenty of evidence that they often (if not very often) are. Anyone who is seriously concerned about global warning *should* agree. It’s simple. Money spent on “going green” that actually doesn’t help reduce climate change is money NOT spent for on climate change — and the actual money spent on effective measures is reduce accordingly (i.e., people won’t just pay more so that they can provide graft for bogus solutions AND then pay more for things that may actually help). If you or the airlines want to fight climate change, then do something that will actually help to fight climate change. At this point, carbon offsets are not the answer — they are too tainted as being fake.
Indulgences to forgive their “sin” against the religion of climate change.
@1990 – I don’t throw the term around lightly, but I stand by my words (read my full article on the issue rather than just the summary snippet here – I have provided a lot of reasoning behind it).
As for Rwanda, unfortunately I am not welcome there. It seems their President took a bit of offense to my criticism of state subsidies for Rwandair in a BBC interview I did a few years ago. 🙂
@Sean M.
Thank you and with respect. I am intrigued and will seek out your article. Your use of that word certainly got my attention–and maybe that was the intent. Fortunately, Gary and many of us here respect ‘free speech,’ so please do say whatever you like here. We also care deeply about aviation and travel industries.
On Rwanda, I am saddened to hear that ‘His Excellency’ did not take your feedback well. With RwandAir, I am surprised that it has been nearly 5 years since Qatar announced its intention to purchase 49% stack in the airline. Likewise, Qatar apparently is investing 60% stake towards the new Bugesera airport (south of Kigali), which is supposed to be their new Central African hub, but the latest I read is that this not expected to be completed until 2032. I guess they are playing the long-game. Time will tell.
@1990 – it was more about the platform (BBC News) and the words I used (“ego driven vanity project with a basket case for a business case”) than just the feedback. 🙂
@Thing 1
We’re on the same page about ‘greenwashing’–it is silly and unhelpful because it makes it seem like we (as companies or as a society) are doing something meaningful when we really are not.
We all know that commercial aviation relies on jet fuel–I’ve said before that this industry will be one of the most challenging to decarbonize, if ever. A lot of smart folks are working on this, because you better believe airlines would love to not have to buy jet fuel anymore. But if it is ultimately not feasible for aviation, we can still make a lot of progress on electricity generation and other transportation, which are the primary sources of emissions today.
However, carbon offsets and credits as a commodity for global efforts to decarbonize is not silly. It is a carrot and stick approach. For the carrot, we all want a healthy environment–if you disagree, then you aren’t serious–and yes, the funds raised are supposed to help those that need it to build better infrastructure. For the stick, polluters are be penalized, financially, for their direct and indirect harm to the environment (to all of us). Otherwise, we giving away a public good (clean air, water, food, etc.) so these (mostly private) companies can profit.
It is a nuanced issue–as Gary has pointed out, when there is ‘regulatory capture,’ even good rules can be weaponized to inhibit competition, which harms us as consumers and new business alike. That is why I have expressed appreciation for Gary and Sean M’s articles.
This is a major issue for our times. If you are only self-interested, there is a lot of money to be made along the way in renewables. Alas, I fear this issue has become another victim in the ‘culture war,’ only to be demagogued, when instead it should be an asset for all of us. We, in the US, should not abdicate this responsibility and opportunity to our competitors and adversaries.
@Sean M.
I was being polite–‘feedback’ is a euphemism. Allow me to offer another: I, too, wish that ‘benevolent’ (leaders) would ‘not shoot the messenger,’ even when they disagree with the substance or method of delivery. Then again, so long as it is only metaphorical, please, by all means, fire away.
Like most “Climate” programs, it’s all empty virtue signaling that rewards politically powerful people at the expense of everybody else.
Good, bad or indifferent. why didn’t Trump object or delay compliance during his first term?
@Mak
No, that’s overly broad–practically denialism–most programs are not empty, and we should hold those politically powerful people accountable to do more for us, and quickly. We’re all going to pay the price, either way. If you think you’re immune, it’s just a matter of time. Be safe out there.
“Denialism” is a propaganda term meant to shift the burden of proof from people asserting the truth of the propositions that man-made climate change is real and that the billions of dollars of tradeoffs are material and beneficial to humanity,” and place the burden of proof upon those who doubt it – but one can only deny what has actually been proven.
@Mak
Actually, the definition of ‘denialism’ is “a person’s choice to deny reality as a way to avoid believing in a psychologically uncomfortable truth.”
I read what you said–you claim that climate change has not been ‘proven’. False.
There’s overwhelming evidence, sir. You can choose to ‘deny’ it because you ‘doubt’ it, or whatever reason you want. Maybe you think it won’t affect you, personally–but it’s only a matter of time.
Usually folks that downplay these concerns do so to protect their personal interests–maybe you work for or own shares in a fossil fuel company–if so, I can understand your special interests.
Many of the programs, such as carbon taxes, seek to ensure that those who do have such special interests still ‘pay your fair share.’ I know, how dare they.