Vietnam's entry into global aviation carbon scheme may strain airlines financially. (Photo: Wikipedia Commons)
The Vietnamese government has committed to join the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a global climate initiative aimed at reducing carbon emissions from international flights.
By regulating emissions and using carbon credits, it is expected to attract at least USD 5.6 million in annual investment into its carbon market. However, the move may also impose significant financial burdens on the country’s aviation sector.
Aligning with global standards may raise costs for airlines
Launched by the International Civil Aviation Organization (ICAO) in 2016, CORSIA uses market-based measures to help the global aviation industry meet its climate goals. Vietnam plans to join in 2026, final voluntary phase of the scheme, and gradually reduce its aviation emissions. The goal is to cap emissions at 85% of 2019 levels during 2024–2035 and to reach net zero by 2035.
According to the Civil Aviation Authority of Vietnam, the government has already taken essential steps to join CORSIA, including issuing regulations on aviation fuel usage and emission tracking, implementing monitoring, reporting, and verification (MRV) for international flights, and submitting historical emission data (2019–2024) to ICAO.
ICAO praised Vietnam’s participation, noting that it demonstrates higher-than-expected readiness among developing countries. Initial estimates suggest Vietnamese airlines may spend an additional USD 5.6 million to USD 37.5 million annually on carbon credits.
Vietnamese authorities have also raised concerns that domestic airlines could face steep costs. During the voluntary phase, the total carbon offset expense is projected at USD 13 million to USD 92 million, depending on the carbon credit market price—which currently ranges between USD 6 and USD 40 per metric ton of CO₂-equivalent.
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Vietnam plans to join in 2026, the final voluntary phase of the scheme, and gradually reduce its aviation emissions. (Photo: unsplash)
Vietnam Airlines expands SAF use; Vietjet invests in low-carbon fleet
Thanks to the rebound in international air travel and a successful debt restructuring, Vietnam Airlines posted a record net profit of VND 7.95 trillion (approx. USD 304 million) in 2024. At its shareholder meeting, the airline’s executives reaffirmed plans to modernize the fleet to improve fuel efficiency and reduce emissions. The company is also actively exploring greater use of Sustainable Aviation Fuel (SAF).
Vietnam Airlines conducted its first SAF-blended flight in 2024 on a route from Singapore to Hanoi. Later that year, it operated six domestic flights with SAF to mark World Environment Day.
Meanwhile, budget carrier Vietjet Air is preparing to participate in CORSIA and is investing heavily in fuel-efficient aircraft. In late June, the airline placed an order with Airbus for 100 A321neo narrow-body jets, which offer at least a 20% improvement in fuel efficiency. These aircraft can operate with up to 50% SAF content.
Source: S&P Global, Carbon Herald, VIR(1), (2), Airbus
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