AEF argues that UK ETS revenues should not be used to compensate airlines

20th March, 2025

The Department for Transport recently asked for views about implementing ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in the UK. The consultation sought views on draft secondary legislation that covers offsetting requirements, following the implementation of CORSIA’s monitoring, reporting and verification rules in UK law.

The consultation also sought views on how to address the interaction between CORSIA and the UK Emissions Trading Scheme (ETS), as flights that depart the UK to the EEA and Switzerland are currently in scope of both schemes. Without further policy action, CO2 emissions above the CORSIA baseline on flights in scope of both schemes would be accounted for under both CORSIA and the UK ETS, resulting in aeroplane operators being charged twice for the same emissions (double-charging).

AEF has a preference for the DfT’s UK ETS- only option, as it would be simpler to administer, and avoids the need consider financial compensation to airlines. However, if the hybrid approach is taken forward, AEF is clear that ETS revenues must not be used to compensate airlines.

AEF’s full response can be found here.