Indian airlines fear CORSIA's financial impact may clip their wings

Kapil Kaul, chief executive officer and director of aviation consultancy firm CAPA India, said that none of the Indian carriers are ready to meet the targets set under CORSIA

Indian airlines on Wednesday voiced concerns over the new global emission standards CORSIA, set to take effect in 2027, calling the targets "unrealistic" and warning that the norms could impose a "significant" financial burden on them.

 

CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is a global initiative of the United Nations-run International Civil Aviation Organization (ICAO) to limit carbon emissions from international aviation.

 

From 2027, it enters a mandatory phase for most major aviation countries, requiring airlines to offset emissions that exceed 2020 levels by purchasing eligible carbon credits. 

 

"CORSIA has set impossible targets. It tries to limit countries to the emission levels of the number of aircraft that they had in 2020. That has to be opposed," SpiceJet CMD Ajay Singh said during a panel discussion at Makemytrip Foundation's India Travel and Tourism Sustainability Conclave 2025.

 

"The 2027 CORSIA targets are unrealistic and unfair for countries like India. We will continue to work with ICAO and see that these norms are not unfair to developing countries and not biased towards developed countries," he said.

 

Kapil Kaul, chief executive officer and director of aviation consultancy firm CAPA India, said none of the Indian carriers are ready to meet the targets set under CORSIA. 

 

"Given these circumstances, the target could be deferred," Kaul said.

 

Air India Express Managing Director Aloke Singh said: "CORSIA will pose a significant burden on airlines. If the SAF production gets further delayed, the burdens of carbon offset -- due to CORSIA -- will rise further." 

 

Under CORSIA, airlines must also monitor and report their carbon dioxide emissions annually, and reduce their offsetting burden by using sustainable aviation fuel that meet ICAO standards.

 

Air India Express MD, though, believed that there was a silver lining in CORSIA implementation. "We as an industry are well organised. We have global frameworks. India is a member of ICAO. IATA represents airlines. There is a road map. It might look impossible, it might seem difficult, but there is a road map," he explained.

 

"There are positives. We, as stakeholders, have to use our collective might to get the SAF production up and get a better buy-in. Once the production is up, the costs will go down," Aloke Singh noted.

 

SpiceJet CMD stated the issue of boosting SAF production boils down to political will in the country because the money needed is small for oil companies but huge for airlines.

 

"The money required to jointly establish a SAF refinery in Panipat was ₹150 crore. The IOC chairman had said he was not getting any return for this money so why should I invest ₹150 crore. So it is all about political will. These are not large sums of money," Ajay Singh explained.

 

"The day the government decides that it has to be done, it will be done. However, it is not feasible today to ask consumers and airlines to pay significantly larger sums of money to do this. To ensure lower emissions, airlines can get new engines and they can electrify their ground equipment. You cannot expect airlines to bear the additional 15 to 20 per cent cost to make SAF production feasible. For petroleum companies, the sums involved are marginal and if there is a political will, it can be done," he added.

 

He mentioned that the SAF refineries should be closer to the airports. "We had this discussion with the Prime Minister's Office as well. You can allot spaces that are close to the airport so that the transport cost comes down," Singh added.

 

Meanwhile, on Wednesday, the Indian Sugar and Bio-energy Manufacturers Association (ISMA) held a high-level roundtable focused on harnessing the potential of SAF from sugar biorefineries. India’s sugar industry has the potential to produce some of the world’s lowest-carbon-intensity SAF using alcohol-to-jet technology. It has the potential to produce 19–24 million tonnes of SAF annually, far surpassing domestic demand, ISMA said.