According to Assembly Resolution A38-18, paragraph 19 c), the Assembly requested that ICAO develops a global MBM scheme, as part of a basket of measures, to achieve the global aspirational goals (of carbon-neutral growth from 2020 onwards).
In the current proposal as per the draft Assembly Resolution text, the level of CO2 emissions from international aviation covered by the scheme in 2020 represents the basis for carbon neutral growth from 2020, against which emissions in future years are compared. In any year after 2020 when international aviation CO2 emissions covered by the scheme exceed this baseline, this difference represents the sector’s offsetting requirements for that year.
In the draft Assembly Resolution text, the global MBM scheme is implemented in two phases, with increasing participation of States based on two criteria: their level of activity in international aviation, expressed in Revenue Tonnes Kilometers (RTKs); and their level of wealth expressed in gross national income (GNI) per capita, both of them calculated based on year 2018 data. The draft Assembly Resolution text determines participation the global MBM scheme as follows:
First phase (from 2021) would apply to States that meet at least one of the following criteria:
- They are classified as high income States in terms of GNI per capita in year 2018; or
- Their individual RTKs in year 2018 are above 1.0 per cent of total RTKs, or their cumulative share in the list of States from the highest to the lowest amount of RTKs reaches 80 per cent of total RTKs.
Second phase (from 2026) would apply to additional States that meet at least one of the following criteria:
- They are classified as upper middle income States in terms of GNI per capita in year 2018; or
- Their individual RTKs in year 2018 are above 0.5 per cent of total RTKs, or their cumulative share in the list of States from the highest to the lowest amount of RTKs reaches 95 per cent of total RTKs.
The global MBM scheme also provides exemptions of those States classified as the Least Developed Countries (LDCs), Small Island Developing States (SIDS) and Landlocked Developing Countries (LLDCs), unless these States met both the GNI per capita and the RTKs criteria for inclusion in either first or second phase above.
In addition to the provisions on inclusion of States in the global MBM scheme, the draft Assembly Resolution text also defines coverage of the scheme at route level: a route will be covered by the scheme in a given phase if both States related to the route are participating in the scheme in that phase; similarly, a route will not be included in the scheme in a given phase if one or both of States related to the routes are not participating in the scheme in that phase.
Once participation in the global MBM scheme is defined for each phase and offsetting requirements are set for a given year, these requirements are distributed among aircraft operators participating in the scheme, and each operator will be responsible for addressing its determined share of offsetting requirements.
It is important to note that regardless of the coverage of the global MBM scheme, all States with aircraft operators undertaking international flights are requested to compile and transmit aggregated emissions information of their operators to ICAO, as part of the activities included in the States’ implementation of a monitoring, reporting and verification (MRV) system.
The global MBM scheme calls for international aviation to address and offset its emissions through the reduction of emissions elsewhere (outside of the international aviation sector), involving the concept of “emissions units”. One emissions unit thereby represents one tonne of CO2. Two main types of emissions units exist: “Offset credits” from crediting mechanisms and “Allowances” from emissions trading schemes.
Aircraft operators compensate their international aviation emissions through the acquisition and redemption of emissions units, arising from different sources of emissions reductions achieved through mechanisms (e.g. UNFCCC’s Clean Development Mechanism), programmes (e.g. REDD+) or projects (e.g. substituting coal-fired stoves with solar cookers). The buying and selling of eligible emissions units happens through a carbon market. The carbon market is a commodity market with the underlying commodity being emissions units. Like any commodity market, it is driven by the law of supply (eligible emissions units offered from different sources) and demand (eligible emissions units purchased by aircraft operators to offset their international aviation emissions under the ICAO global MBM scheme).
Emissions units are purchased directly between buyers and sellers, with brokers facilitating operations when needed.
