CORSIA Offsetting Rules for Canadian Airlines

Summary#

The Regulations Amending the Canadian Aviation Regulations (Parts I and X — Offsetting of CO2 Emissions — CORSIA) put Canada’s part of the International Civil Aviation Organization’s carbon-offsetting scheme into domestic law. They take effect on January 1, 2021 and require certain Canadian international operators to monitor, report, and buy offsets (or use lower‑carbon aviation fuels) to cover growth in CO2 above 2020 levels.

What it does#

• Brings the ICAO scheme known as CORSIA into the Canadian Aviation Regulations so Canadian operators must follow the same offsetting rules as other participating countries.
• Requires affected operators to have an approved emissions monitoring plan, verify their annual emissions, and file verified emissions reports (reports are due by April 30 following the monitoring year).
• Sets out how Canada’s government (via Transport Canada) will calculate each operator’s offsetting obligation for three‑year compliance periods and when cancelled emissions units must be reported.
• Allows operators to reduce offset needs by claiming verified reductions from approved low‑carbon aviation fuels (so‑called CORSIA eligible fuels).
• Creates enforcement tools, including administrative monetary penalties of up to $5,000 for individuals and $25,000 for corporations, and a rule that an operator cannot operate certain international flights unless its previous compliance obligations are met.

Who's affected#

• Canadian private operators and air operators that produce more than 10,000 tonnes of CO2 from international flights in a calendar year using one or more large aeroplanes.
• The government’s analysis says about 16 Canadian operators are affected and they fly to roughly 65 partner countries.
• Some flights are excluded, for example humanitarian, medical evacuation, firefighting, and related positioning flights. New operators (new entrants) get temporary exemptions for a short period.

Why it matters#

• This implements an international rule designed to keep net CO2 from international aviation at 2020 levels. Canada’s rules make sure Canadian carriers participate in that global effort.
• For airlines it means extra costs and paperwork: the government estimates Canadian operators will need to acquire between 54.4 million and 71.9 million tonnes of offset units across 2021–2035, with estimated industry costs of $1.2 billion to $1.6 billion (present value) and an estimated net societal benefit from avoided climate damage of $1.6 billion to $2.1 billion (present value). The stated net present value benefit is between $362.9 million and $472.7 million over 2021–2035.
• The rules mean travellers might see air operators factor offset costs into ticket prices over time, and they tie Canada’s aviation rules to the international system so domestic rules match global practice.