New cost pressures
Under the International Civil Aviation Organization (ICAO)'s CORSIA program, airlines from participating countries are obligated to offset carbon emissions exceeding the baseline (in 2019) through the purchase of carbon credits and the implementation of emission reduction measures. According to Mr. Dinh Van Tuan, Deputy General Director of Vietnam Airlines Corporation, the application of CORSIA has an impact on the cost of purchasing carbon credits. In the first year of compliance, the airline anticipates offsetting between 312,000 and over 420,000 eligible emission units, with this amount expected to increase in subsequent years.
The question is how carbon costs will be handled in practice. If businesses absorb all the costs themselves, profits will shrink, but if they pass some of the costs on to ticket prices, passengers will be directly affected, given that travel demand remains sensitive to price fluctuations.
This pressure arises as airlines are simultaneously facing significant impacts from international fuel prices. Furthermore, the biggest risk in implementing CORSIA currently lies in the pricing and supply of carbon credits. The market for eligible CORSIA credits is still in its formative stages, with limited supply, while the legal frameworks in many countries involved are not yet fully developed, and the certification and trading of credits are not yet fully synchronized and clear.
Globally , many countries and projects have implemented carbon credit mechanisms, but the number of credits eligible for the CORSIA program is very limited. Currently, only six types of credits are recognized by ICAO, and in reality, only three projects fully meet the requirements for trading within the CORSIA framework. Furthermore, risks related to exchange rate fluctuations and the ability to forecast costs also affect airlines in their medium- and long-term financial planning.
Furthermore, the emission offsetting obligation goes beyond simply purchasing carbon credits; it also requires businesses to invest in emission inventory, measurement, and reporting systems. These are items that were previously not fully accounted for in aviation operations. Moreover, CORSIA has not achieved uniform participation globally. The disparity in participation levels between countries could raise concerns about fairness in international competition, as airlines that proactively comply with environmental commitments bear additional costs, while others in the same market do not.
According to Mr. Do Hong Cam, Deputy Director of the Vietnam Civil Aviation Authority, in the period 2026-2030, the implementation of CORSIA will generate additional compliance costs for airlines, including the cost of purchasing eligible emission units for carbon offsetting, verification and management costs, emission data reporting costs, and the cost of purchasing sustainable aviation fuel (SAF).
Currently, Vietnam Airlines is researching and preparing for the use of SAF (Sustainable Fuel Oil), as this solution can reduce CO2 emissions by up to 80% over the entire fuel lifecycle. However, its use will significantly impact costs. With a 2% blending rate, SAF costs will account for up to 7% of Vietnam Airlines' fuel price structure, as the current price of SAF is approximately four times higher than traditional aviation fuel Jet A1.
Furthermore, the supply of SAF on the international market is scarce and unevenly distributed, with some airports in Europe lacking the capacity to refuel with SAF. In Asia, Vietnam Airlines has used SAF on the route from Bali to Vietnam, but the rate is still very low, around 0.26%. Domestically, SAF production only began in 2025, so it is currently only being tested on short flights with a 5% blending rate.
A comprehensive set of solutions is needed.
It is clear that the trend of incorporating carbon as an operating cost in the aviation industry is inevitable. For Vietnamese aviation, the challenge lies not only in paying the additional cost, but also in managing that cost effectively and in the long term. This requires improving the emission management capacity of businesses and building appropriate support mechanisms to ensure environmental goals are met.
According to Mr. Dinh Van Tuan, Deputy General Director of Vietnam Airlines Corporation, to ensure carbon credits, the airline will prioritize utilizing available credits on the market and participating in appropriate international transaction channels and agreements to promptly meet its CORSIA compliance obligations. In addition, it will research forms of advance purchase agreements, price and volume fixing mechanisms in the medium and long term to minimize risks from market fluctuations. In the long term, when the legal framework is perfected and the economic and technical efficiency is clarified, the airline will research participating in or investing in suitable carbon credit generating projects.
Furthermore, to enable businesses to proactively comply with CORSIA and reduce long-term risks, Mr. Tuan stated that it is necessary to quickly finalize the legal framework and carbon credit market mechanism, specifically regulating credit standards, recognition mechanisms, trading, and usage in accordance with CORSIA requirements, while ensuring interoperability with international markets. Along with this, it is necessary to research and issue appropriate support mechanisms, especially policies on taxes, fees, and incentives for infrastructure investment for airlines during the transition to sustainable fuels, aiming for the long-term development of a green and sustainable aviation industry and participation in domestic emission reduction projects.
From a state management perspective, the need to improve policies also requires inter-sectoral coordination. According to Mr. Do Hong Cam, Deputy Director of the Civil Aviation Authority of Vietnam, it is necessary to promptly issue a Circular to replace Circular No. 22/2020/TT-BGTVT dated September 28, 2020, of the Ministry of Transport (formerly) regulating fuel consumption and CO2 emissions from aircraft in civil aviation operations. This is to fully update the new ICAO requirements on monitoring, reporting, verification, and carbon offsetting obligations to ensure consistency with relevant laws on environment, energy, and the domestic carbon market. Implementing CORSIA is not solely the responsibility of the aviation industry, but involves many sectors; therefore, close coordination among ministries and agencies is essential. At the same time, closely monitor new policies from ICAO, the EU, and major partners to avoid overlaps domestically and minimize the risk of technical barriers arising for Vietnamese aviation.
Source: https://nhandan.vn/hang-khong-viet-nam-truc-ap-luc-chi-phi-cac-bon-post962717.html
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