Aviation And Carbon Markets - A Vietnam Focus

Just as airlines began to recover from COVID-19, they were hit by a rapid spike in jet fuel prices. According to the International Air Transport Association (IATA), the average price of jet fuel rose from approximately US$1.50 per gallon in 2022 to over US$2.00 per gallon by mid-2023, a surge of over 30%.

Beyond economics, aircraft account for approximately 3% of global carbon emissions, and the industry is faced with another challenge: an enforced requirement to reduce pollution.

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) was initiated by the International Civil Aviation Organization (ICAO) in 2016. Under CORSIA, airlines with annual emissions of more than 10,000 tons of carbon equivalent (TCE)are expected to monitor and report their emissions on international flights. As from 2027, they will be required to purchase carbon credits from a regulated carbon market to offset their emissions. Many airlines are preparing for this