Cleared for compliance: Key environmental regulations for airlines

In our first article, we explored the evolving landscape of environmental policies and the growing emphasis on sustainability in aviation. Now, in this second article of our two-part series, we will delve deeper into the specific environmental regulations shaping the airline industry.

From emissions trading systems to sustainable fuel mandates, join us as we break down this key rules and their implications for airlines striving to meet climate goals while maintaining operational efficiency.

European environmental regulations for airlines 

Lately, the main purpose of the European Union is to put the transport environmental trajectory of the EU’s climate action plan for 2030 and 2050 through the latest “Fit for 55” legislation package.

This new law aims to provide legal certainty to aircraft operators and fuel suppliers in Europe. It kick-starts the large-scale production of sustainable aviation fuels, making the EU’s aviation industry more sustainable. This is a key step in a broader effort to reach the climate targets of net zero in 2050 at a European level.

The Re.Fuel.EU regulation promotes an obligation for aircraft operators in the EU to use a minimum percentage of SAF, starting with 2% in 2025 and achieving 70% in 2050. Additionally, this law aims to avoid tankering practices that could cause additional emissions for carrying extra weight.

Related content >>> Learn how to do your airline's ReFuel EU report in this dedicated article. 

This regulation's global aim is to establish market transparency and promote environmental aircraft performance in the European Union.

MRV on CO2 emissions:

All aviation operators must draft an emissions report each year, accredited by a third-party verifier (by 31st March of the following year). This report must then be submitted to the EU. Once validated, operators must surrender the equivalent number of allowances corresponding to their emissions of the preceding year by 30 September of that year.

If an operator has not been granted an allowance big enough to cover their reported CO2 emissions, they will incur a penalty of EUR 100 per extra tonne of emissions. Additionally, the names of penalized operators will be made public in such cases.

While the impact of CO2 emissions is widely recognized, European Union institutions have been at the forefront of considering the extension of MRV requirements to include non-CO2* effects. The goal here is to draw an obligation of MRV of this kind of emissions on top of C02 emissions.

*Non-CO2 emissions are to be understood as the following: soot, nitrogen oxides, and water vapor.

Related content >>> Everything you need to know about contrails

Despite the report's significant impact on the non-CO2 effect in the aviation sector, because of lobbying, the draft proposal debated within the EU institutions excludes international flights from the scope. As of now, the European Commission is still working on delivering results and drafting a legislative proposal to address aviation’s non-CO2 effects, with the aim of finalizing it by the end of 2027.

Source: Non-CO2 Kick-Off Consultation meeting by EU

The regulation stipulates that starting in 2025, the MRV of the non-CO2 emission must be applied to all aviation activities within the European Economic Area listed in the Directive.

This report will be “on trial” in 2025 and 2026, limited to flights between two airports within the EEA. During this period, it will be voluntary for all other flights.

CSRD the general impact of the Green Deal on EU companies & airlines

On another note, the European Union is acting in accordance with the Green Deal on a more global vision through the Corporate Sustainability Reporting Directive (CSRD). This regulation came into effect in 2023 and will apply to the largest category of companies starting in January 2025, covering reports for the 2024 financial year.

This regulation aims to support the sustainable development of European companies by imposing an obligation to report on it. This extra financial reporting will help institutions evaluate companies' environmental impact.

Even though the CSRD is a European Regulation, each European member country has some authority on its national application. Therefore, some companies’ criteria might be adapted to each country in accordance with the scope of the CSRD. The following table applies to French companies.

🚨 As a consequence, European airlines could enter into the scope of the CSRD obligation to report.

International environmental regulations for airlines 

Why are environmental policies and regulations important for airlines? 

1. Legal compliance

If we step back from the European Union's scope to the international point of view, we can focus on the CORSIA program, also known as the Carbon Offsetting and Reduction Scheme for International Aviation.

CORSIA is the first international measure for the worldwide aviation industry. The aim was to harmonize the international market and support a collective approach regarding the ICAO member states.

The implementation of the CORSIA program responded to 3 phases: the pilot phase (2021-2023), the first phase (2024-2026), and the second phase (2027-2035). Today we are still in the first phase of the program implementation. CORSIA aims to offer a way to complement other measures (technical and operational) in place to reduce CO2 emissions.

Participation in this ICAO program depends on the state in which the airline operates; while some states participate on a voluntary basis, airlines within those states are obligated to comply with the program's requirements. In 2024, 126 states participated in the CORSIA program. The updated list of the participating states can be consulted here.

All the templates to report compliance with the CORSIA recommendation are available online, ICAO has published standards in all six ICAO official languages: https://www.icao.int/environmental-protection/CORSIA/Pages/Templates.aspx

American environmental regulations for airlines 

The United States Environmental Protection Agency (EPA) has taken action to address greenhouse gas (GHG) emissions from aviation, aligning domestic regulations with international standards. The idea chosen by the United States Environmental Protection Agency (EPA) was the following one:

In 2016, the EPA voted to adopt a rule that would become part of the Clean Air Act, focusing on the six GHGS: carbon, dioxide, methane…

Behind this rule, the purpose of the EPA was to encourage aviation actors to implement the CORSIA standards published by ICAO. As a consequence, the EPA launched an Advance Notice of Proposed Rulemaking providing information on the CORSIA program.

In both these regulations, the aircraft targeted are the ones used for international commercial aviation and large business jets. The purpose was to keep domestic flights outside the scope of this regulation in accordance with the regional competition in the market. 

During 2021, being challenged on the effectiveness of these regulations, the EPA stated the following : "The U.S. will press for ambitious new international CO2 standards at the upcoming round of ICAO negotiations, why in September the Biden Administration announced a series of actions aimed at boosting the development of sustainable aviation fuel, and why earlier this month the Biden Administration released the U.S. Aviation Climate Action Plan at COP26.”

After COVID-19, the APAC region reported a significant growth in air traffic especially regarding Cargo-ton kilometers: "The commercial aircraft services market in APAC region will more than double in value to 129 USD (123 billion Euros) from 52 billion USD (49 billion €) today, by 2043 (..) driven by a demand for some 19.500 new aircraft for the region supported by a compound annual growth rate of 4.81% in passenger air traffic in the region" Source: Airbus. 

Therefore, airlines such as Singapore Airlines, Cathay Pacific, and even Air New Zealand have been committing to the international objectives and standards supported by CORSIA.

ICAO is also a major supporter of the development of airline regulation in the region through the Conferences of Directors General of Civil Aviation in the Asia and Pacific Region. This is an example of their involvement in the Chinese environmental protection action plan.

Environmental regulations for airlines in the Middle East region

Very similar to the APAC region, ICAO plays an important part in the Middle East region. They have organized many seminars and workshops in the region and have invited aviation stakeholders to stand for a net zero carbon footprint in 2050.

For example, in 2024, ICAO organized a workshop with CORSIA to provide a “foundation for establishing a monitoring, reporting and verification (MRV) system, key component of CORSIA implementation, as per the provisions in Annex 16 Volume IV and to support States with the development/Update of their State Action Plans, and to provide insight on how State Action Plans relate to ICAO’s other ongoing Environmental activities.”

To sum up 

Environmental regulations are rapidly reshaping the global aviation industry, encouraging airlines to adopt more sustainable practices while navigating complex compliance requirements. From European Union directives to international programs like CORSIA, these regulations represent both challenges and opportunities for the industry to align with climate goals. By understanding and implementing these measures, airlines can play a pivotal role in reducing their environmental impact, fostering innovation, and securing their long-term viability in an increasingly eco-conscious market.

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