Qatar Airways and the International Air Transport Association (IATA) has announced that Qatar Airways has become the first carrier to make a transaction on the IATA Aviation Carbon Exchange using IATA’s Clearing House (ICH).
The IATA Aviation Carbon Exchange (ACE) is a centralised marketplace where airlines and other aviation stakeholders can trade CO2 emission reduction units so they can comply with future emission targets or for voluntary offsetting purposes.
An airline wishing to buy carbon offsets can now do so through the carbon exchange, and the system allows for transparency in terms of price and the availability of emission reduction units. It also simplifies the process for air carriers to access carbon markets.
Michael Schneider, Assistant Director Aviation Environment, at IATA explained the new process as follows:
“Let’s say airline X makes a US$30m trade for offsets. In absence of the ACE/ICH setup, it usually requires the involvement of numerous people to complete a trade, from procurement to treasury to finance, resulting in a lengthy process that can take weeks. By then the carbon price will no longer be guaranteed and they face issues each time they trade, because the price cannot be locked-in. Using the ICH, on the other hand, will reduce the time to two days, offering a secure and safe mechanism to the airline. Furthermore, on the seller side the ICH guarantees payment, again with a speedy two-day process, so its excellent news for all participants.”
Schneider said that “Several airlines have already used the ACE. JetBlue was the first to make a trade when it went online last year. But the first airline to make an ACE trade using the new integration with the ICH is Qatar Airways.”
Qatar Airways Group Chief Executive, His Excellency Mr. Akbar Al Baker, said: “The State of Qatar is one of the States that voluntarily participates in the pilot phase of ICAO CORSIA. As a leader in aviation, Qatar Airways is driven by an ambitious environmental sustainability vision and we are determined to support Qatar in this pursuit by remaining compliant with the global scheme. We welcome the use of the IATA Aviation Carbon Exchange (ACE), as it enables airlines to invest in CORSIA eligible emission reduction units, further supporting Qatar Airways’ commitment to invest in a low-carbon future, while reducing our financial risk.”
Willie Walsh, IATA’s Director General, said, “The Carbon Offsetting and Reduction Scheme for International Aviation – CORSIA – is a key tool for helping the industry achieve carbon-neutral growth as part of our long-term target to reach net-zero carbon emissions by 2050. The Aviation Carbon Exchange enables airlines to purchase their offsetting credits with maximum transparency and minimum bureaucracy. By performing the first-ever trade on the ACE using the IATA Clearing House, Qatar Airways has demonstrated its support for the ICH as a means of pioneering efficiency in transactions that will make the purchase of quality carbon offsets easier for all airlines.”
The Aviation Carbon Exchange (ACE), is a platform for trading carbon credits, powered by CBL Markets, an Xpansiv CBL Holding Group (XCHG).
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