The scheme demands offsetting of sectoral growth above the baseline, set at 85% of emissions generated from international aviation in 2019. This was surpassed for the first time in 2024 as international aviation activity returned to pre-pandemic capacity.

Aviation Operators are now required to purchase CORSIA Eligible Emissions Units to offset a portion of their verified emissions for qualifying flights, access here.

Who does it apply to?

2024: CORSIA compliance is mandatory for all aeroplane operators for flights carried out between the 126 signatory states.

2027: CORSIA will shift from voluntary to mandatory participation for all 193 UN countries, meaning operators flying between any of these member states, will have to act on CORSIA regulations.

Exceptions may apply for routes to and from least developed countries or if an operators’ annual emissions do not surpass 10,000 t/CO2.

However, monitoring, reporting and verification of emissions (MRV) will apply for all international flights.

Offsetting obligations

The offsetting obligation for each operator will be determined on the basis of both individual and sectoral emissions. In October each year, the annual sectoral growth factor (SGF) for the previous year will be published, determining emissions above the 2019 baseline.

The operators offsetting obligation, after deductions for CORSIA eligible SAF, will be determined as follows:

Penalties: Sanctions for non-compliance will apply on country level. Contact our team to find out more.

Convergences with Emissions Trading Schemes (ETS)

In order to avoid double-exposure to carbon pricing where national ETSs already cover emissions from international aviation, some adjustments are necessary. In Europe, this currently affects Switzerland and the United Kingdom.

CORSIA Eligible Emissions Units (EEUs)

CEEUs have to reflect a set of conditions for CORSIA Phase 1 eligibility, including:

• Credits must have vintages between 2021 and 2026, and be generated from projects that started their first crediting period from 1 Jan 2016.
• Credits must have received a Letter of Authorisation (LoA) and be correspondingly adjusted.

Registries and regulatory issues during Phase 1

The ICAO Technical Advisory Body (TAB) is continuously reviewing programme applications for CORSIA
Phase 1 eligibility:

Currently approved: American Carbon Registry (ACR) and the Achitecture for REDD+ Transactions (ART)

Conditionally approved (November 2024): Verra, Climate Action Reserve (CAR) and Gold Standard

Under Article 6 of the Paris Agreement, carbon credits used for international compliance must be adjusted in the project host country’s inventory, requiring a LoA.

Disagreements over these adjustments are delaying credit supply and program approval. Currently, only 7 million EEUs from Guyana are available, with a predicted shortfall of 7 to 14 times the demand by 2032, adding bullish pressure on prices.

Chart: Forecast of annual demand for EEUs in a low and high emissions scenario. 7.14 million EEUs were brought to market by the government of Guyana earlier this year. While further supplies are anticipated, these are contingent on member state cooperation under Article 6, and demand is still forecast to peak in 2025, leading to a net shortfall by 2029.
Source: IATA Sustainability and Economics/CFP Energy

The CORSIA Market

Given the already high demand for EEUs and limited supply, operators should hedge for compliance early in Phase 1 to mitigate the risks associated with market volatility. CFP Energy provides clients with immediate access to Phase 1 eligible EEUs and keeps your airline informed about critical developments on both national and international level.

Our team of experts is here to guide you through these complexities, whether you’re looking to purchase as a one-time transaction or secure your compliance with futures contracts ahead of new supply. Together, we tailor a customised plan that meets your needs.