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02 / TECHNICAL BRIEF

CORSIA / MARKET INTELLIGENCE

How CORSIA creates demand for eligible carbon credits.

CARBON2GREEN / HSP

CORSIA requires airlines to address a defined share of international aviation emissions. Airlines therefore need credits that meet the programme's rules and can be cancelled by the applicable deadline.

HOW IT WORKS

Airlines measure emissions, calculate their obligation and cancel eligible units.

International flights cross jurisdictions, so ICAO established one common process: monitor eligible emissions, calculate each operator's obligation, acquire eligible emissions units and cancel them so they cannot be used again.

01FLYInternational operations
→
02REPORTFuel and CO₂ data
→
03CALCULATEOffsetting requirement
→
04CANCELEligible emissions units
SOURCE · ICAO CORSIA FAQ
JUNE 2026 MARKET SNAPSHOT

Current estimates show
a large supply shortfall.

IATA's June 2026 central scenario placed cumulative first-phase demand at 213 MtCO₂ against 38 MtCO₂ of available CORSIA eligible emissions units, leaving an indicated shortfall of 175 MtCO₂.

SOURCE · IATA SUSTAINABILITY & ECONOMICS · 16 JUNE 2026
AUTHORIZATION REQUIREMENTS

Not all potential credits
can be used for CORSIA.

Sylvera's Q2 2026 snapshot counted roughly 300 million credits potentially aligned with the first phase. Only 38 million had cleared both the host-country authorization requirement and the accounting or insurance requirement for use as eligible emissions units.

THEORETICAL PIPELINE640M

Sylvera's optimistic pool of credits that could be aligned by the January 2028 deadline.

LIKELY AUTHORIZABLE104M

Credits situated in countries assessed as likely to deliver LoAs and corresponding adjustments.

CURRENTLY CLEARED38M

Credits that had crossed both hurdles in the Q2 2026 snapshot.

DEMAND FORECASTS

Estimates vary, but all show a much larger market after 2027.

Forecasts differ because they make different assumptions about traffic growth, participation, sustainable aviation fuel uptake and enforcement. This comparison reconstructs Abatable's November 2025 review of Abatable, ICAO and IATA scenarios.

MODELFIRST PHASE · 2024–26SECOND PHASE · 2027–35
ABATABLE
200—220M
825—1,600M
ICAO
100—150M
880—1,350M
IATA
146—246M
1,082—1,768M

Horizontal positions are normalized within each phase. Compare ranges within a column—not apparent lengths across columns. Later IATA updates moved the central first-phase estimate above 200M.

SOURCE · ABATABLE COMPARISON · UPDATED NOVEMBER 2025
PRICE & AIRLINE EXPOSURE

A shortage of eligible units creates price and delivery risk.

There is no single “CORSIA price.” Auction outcomes, wholesale references and scenario models describe different instruments and dates. Credits that are ready, authorized and considered high quality may command a premium.

OBSERVED · LATE 2024$21.70/ EEU

Guyana JREDD+ auction price cited by BNEF and Sylvera.

SYLVERA MODEL · 2026$33MEDIAN TOWARD JAN 2028

Scenario range: $15–53; earlier supply-crunch cases exceeded $60.

BNEF BASE CASE · 2025$972027 PEAK

A modelled peak, followed by easing as supply expands—not a quoted market price.

MSCI 2024 PHASE-I RANGE$18—51

Projected CORSIA credit price per tCO₂e.

MODELED AIRLINE COST$1.9—7.0B

Total Phase-I cost across international airlines.

PASS-THROUGH SCENARIO<$2

Estimated average cost per ticket if passed through.

THE PHASES

More countries join the programme from 2027.

The pilot and first phases use voluntary State participation. The second phase introduces wider participation criteria and exemptions. Forecasts for cumulative second-phase demand range from hundreds of millions to well over one billion units.

2021—2023

Pilot phase

No offsetting requirement accrued because sector growth factors were zero.

2024—2026

First phase

Current compliance period. Eligible units must be cancelled by 31 January 2028.

2027—2035

Second phase

Participation expands under ICAO criteria, with defined exemptions.

SOURCE · ICAO PARTICIPATING STATES AND STATE PAIRS
THE BROADER ARTICLE 6 MARKET

Airlines will compete with other buyers for Article 6 credits.

Governments, regulated companies and voluntary buyers also seek correspondingly adjusted, high-integrity supply. MSCI's August 2026 analysis points to future EU demand of about 25 Mt/year for international credits from 2036, with draft CBAM provisions potentially bringing forward up to 70 Mt/year.

2035 CORSIA80—180Mt / YEAR
EU INTERNATIONAL CREDITS≈25Mt / YEAR FROM 2036
DRAFT CBAM UPSIDE≤70Mt / YEAR
SOURCE · MSCI · EU ETS REFORM · AUGUST 2026
AIRLINE-SIDE MRV

Before offsetting comes measurement.

Aircraft operators monitor fuel use through an approved Emissions Monitoring Plan, compile annual emissions, and have reports checked by an independent verification body before submission to the administering State.

MMonitor

Record fuel use or apply the ICAO estimation tool where permitted.

RReport

Aggregate eligible international-flight emissions in the required format.

VVerify

Independent verification checks the report before State submission.

WHAT MAKES A UNIT ELIGIBLE

A credit must meet CORSIA rules before an airline can use it.

A unit may represent one tonne of CO₂ reduced, avoided or removed. For CORSIA use, it must also come from an ICAO-approved programme and meet the applicable scope, vintage, activity, host-country authorization and double-claiming requirements.

01

Approved programme

ICAO's Council determines the programmes and unit types eligible for each compliance period.

02

Applicable scope

The activity, methodology, unit vintage and crediting period must fall within scope.

03

Host authorization

The host country authorizes use and addresses double claiming through Article 6 accounting.

04

Registry cancellation

The airline cancels eligible units and reports the cancellation for compliance.

SOURCE · ICAO ELIGIBLE EMISSIONS UNITS
WHAT THE PROJECT MUST COMPLETE

Several steps separate a peatland project from a CORSIA-eligible unit.

RIGHTSBASELINEMETHODOLOGYVALIDATIONMONITORINGVERIFICATIONISSUANCEAUTHORIZATION

A problem at any stage can change how many units are produced, when they are available, whether they are eligible—or whether they can be issued at all.