As COP29 unfolds in Baku, Azerbaijan, discussions around carbon credits are in the spotlight, with new standards under Article 6 of the Paris Agreement seeking to enhance transparency in carbon markets.
Carbon credits, which allow organisations to offset emissions by investing in projects that capture or reduce pollution, are commonly used during the early development phases of technologies that may not yet achieve net-zero emissions. However, in the case of Advanced Air Mobility (AAM) companies, using carbon credits to offset emissions is a complex challenge.
Unique regulatory challenges for AAM companies
Alessandro Vitelli, an expert at the International Emissions Trading Association (IETA) who has covered carbon trading for twenty years, highlighted the regulatory and methodological barriers AAM companies face in generating carbon credits.
“Most current regulations for compliance address scope 1 and sometimes scope 2 emissions. For AAM, though, lifetime emissions are more about scope 3, specifically those generated in manufacturing raw materials,” Vitelli explained.
A further complication arises from jurisdictional and operational differences between traditional aviation and AAM. Traditional airlines are governed by the International Civil Aviation Organization (ICAO) under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which mandates purchasing credits for emissions above a 2019 baseline. However, AAM operates on a smaller scale, with passenger capacities and operational profiles that are not well-suited to ICAO’s framework. “In the realm of carbon crediting, AAM doesn’t come up, and it never comes up at any COP,” Vitelli noted.
Even if AAM companies can show they reduce emissions by replacing conventional aircraft, the process to earn carbon credits is challenging. Generating carbon credits for electric aircraft, Vitelli explained, would require a multi-step process that begins with a feasibility study to assess potential emission reductions. Following this, an AAM company would need a carbon credit developer to design a methodology for calculating these savings. This methodology would then need to be approved by a global standards body, potentially even the UN.
“If AAM companies can produce a baseline for total emissions from journeys by car, train, or other modes, and then demonstrate emissions savings with eVTOL, there’s potential to generate carbon credits,” Vitelli said. “But they need to go through regulatory and scientific hoops.” With carbon credits valued at about $20 per ton, this could mean limited returns for AAM companies, making the effort worthwhile only if the technology scales up significantly.
Criticism of the carbon credit market
However, some environmental advocates question whether carbon credits should even play a role in AAM or aviation more broadly.
Erika Lennon, Senior Attorney at the Centre for International Environmental Law (CIEL) argued that carbon credits are “merely a licence to enable polluting countries and companies to continue business as usual,” calling for “real, effective, human rights-centred climate action.” Recupero’s critique reflects a broader concern that carbon credits may encourage industries to avoid direct emissions reductions.
Khaled Diab from Carbon Market Watch echoed this sentiment, cautioning against using offsets to substitute for tangible emissions cuts. “The major challenge relating to carbon credits for the aviation sector is to avoid engaging in greenwashing and to undertake real climate action by slashing their actual emissions,” he said, emphasising that offsets should only be seen as supplementary contributions to climate goals.
For AAM, the road to generating carbon credits is uncertain and complex. While achieving measurable emissions savings and securing regulatory approval could open up a potential pathway, questions remain about the viability, transparency, and ethical considerations of the carbon credit model.
