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Industry group IATA launches Aviation Carbon Exchange

Highlights

Exchange integrated with IATA Clearing House

ACE aims to facilitate ease of transactions

First trade linked to Dominican wind farm

London — The International Air Transport Association has launched the Aviation Carbon Exchange -- the first centralized, real-time market for trading aviation carbon offsets, it said Nov. 25.

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ACE is integrated with the IATA Clearing House for the settlement of funds linked to carbon offset credits, allowing a seamless and secure settlement system which guarantees payment and delivery of the carbon credits, it said.

The move is likely to enable increased activity in the market for aviation carbon offsetting by making transactions more straightforward for airline operators.

"Airlines are serious in their commitment to reduce emissions. And they need a reliable tool to access quality carbon credits in real time," said Alexandre de Juniac, IATA's director general and CEO.

"ACE will be a key tool helping airlines efficiently manage these important transactions," he said in a statement.

The global aviation sector reiterated the industry's commitment to cut net greenhouse gas emissions to half of 2005 levels by 2050 in a resolution at the 76th IATA Annual General Meeting held Nov. 24.

A major part of that effort is the Carbon Offsetting and Reduction Scheme for International Aviation -- the world's first global sector-wide system to reduce emissions through a trading mechanism.

CORSIA aims to deliver carbon-neutral growth for global aviation emissions from 2021 by requiring airline operators to buy emissions credits to offset any growth above a 2019 baseline. Airlines are also buying carbon credits as part of individual corporate commitments or to offset domestic operations, IATA said.

First trade linked to wind farm project

The first trade on the ACE platform was completed by American low-cost airline JetBlue, which purchased credits from the Larimar wind farm project in the Dominican Republic.

The project, which began development in 2015, will reduce average CO2 emissions by more than 200,000 mt/year when fully completed, IATA said.

JetBlue said the expectations of its customers and employees are changing with regard to the sustainability of the aviation sector.

"While our industry's short-term priorities are focused on COVID-19 recovery, now is the time to rebuild our operations in more sustainable ways such as adopting Sustainable Aviation Fuels and setting clear strategies to reduce net aviation CO2 emissions," said JetBlue CEO Robin Hayes.

"The Aviation Carbon Exchange will help us continue to meet our climate commitments by providing simplified and transparent access to legitimate, third party certified carbon offsets," he said in the IATA statement.

ACE has been developed in conjunction with commodities trader Xpansiv CBL Holding and provides airlines and other aviation stakeholders the opportunity to offset their carbon footprint by buying credits in certified projects that reduce carbon emissions.

Carbon reduction programs on ACE include forestry projects, wind energy operations, protection of ecosystems and remote community-based projects to cut emissions.

ACE will also be open to airlines wanting to invest in voluntary carbon offsets outside CORSIA, for example those who have set net-zero emissions targets and those wishing to offset domestic operations.