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🇰🇷 South Korea /Environment & Climate

Korean Airlines Face $250 Million Carbon Cost as Credit Shortfall Looms

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Korean airlines face a potential cost of 335.5 billion won ($250 million) by 2028 due to international carbon emission regulations.
  • They have only secured 3.6% of the required carbon credits for the first year of compliance, leaving a significant gap.
  • The industry is exploring sustainable aviation fuel (SAF) but faces challenges with raw material sourcing and scaling up production.

Korean airlines are bracing for a substantial financial burden as they prepare to comply with international carbon emission regulations, with an estimated cost of 335.5 billion won ($250 million) by 2028. The 'Carbon Offsetting and Reduction Scheme for International Aviation' (CORSIA), implemented by the International Civil Aviation Organization (ICAO), requires airlines to offset emissions exceeding a 2019 baseline.

Korean airlines have secured only a fraction of the necessary carbon credits to meet international regulations, leaving them facing substantial costs and potential compliance issues.

— Park Ji-hyeA member of the National Assembly's Environment and Labor Committee highlighting the critical gap in carbon credit procurement.

However, a significant shortfall exists in securing the necessary carbon credits. For the initial compliance period of 2024-2028, airlines' total offsetting obligation amounts to 2.75 million tons. Yet, as of July, they have only secured 100,000 tons, a mere 3.6% of the requirement. Korean Air faces the largest projected burden, estimated at 226 billion won, followed by Asiana Airlines at 32.6 billion won.

The situation is exacerbated by the limited availability of CORSIA-approved carbon credits, which must be sourced from internationally recognized emission reduction projects. With the compliance deadline approaching, the price of these credits is expected to rise. Airlines are also looking towards sustainable aviation fuel (SAF) as a potential solution to reduce their carbon footprint, as SAF can cut emissions by up to 80% compared to conventional jet fuel.

Purchasing carbon credits from abroad alone cannot be a fundamental solution.

— Park Ji-hyeEmphasizing the need for domestic solutions and policy support for SAF.

Despite government plans to mandate SAF blending starting next year, increasing to 3-5% by 2030 and 7-10% by 2035, significant hurdles remain. The primary challenge lies in securing sufficient raw materials, such as used cooking oil. Current domestic production of used cooking oil is far below the amount needed to meet even a fraction of the SAF demand, raising concerns about the feasibility of scaling up SAF usage to meet regulatory requirements.

The government must review the expansion of SAF blending mandates and urgently develop a plan for securing raw materials.

— Park Ji-hyeCalling for government action to address the SAF supply chain challenges.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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