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CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is an ambitious market-based initiative spearheaded by the International Civil Aviation Organization (ICAO) to address the environmental impact of aviation.
CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is an ambitious market-based initiative spearheaded by the International Civil Aviation Organization (ICAO) to address the environmental impact of aviation.
Established in 2016, CORSIA aims for carbon-neutral growth in international aviation from 2020 onward by driving airlines emissions reduction through operational efficiencies and adoption sustainable aviation fuels (SAF). Carbon offsetting will play a crucial role as airlines residual emissions above the baseline will need to be addressed through the purchase of eligible carbon credits.
Phases of Implementation
CORSIA is being implemented in three phases:
Pilot Phase (2021-2023)
First Phase (2024-2026)
Second Phase (2027-2035)
Compliance and Reporting
Airlines are required to monitor, report, and verify (MRV) their emissions annually. However, airlines have until January 0228 to purchase the necessary carbon credits to meet their requirements. This delay allows airlines to accumulate the necessary offsets without immediate financial pressure. The final deadline for offsetting 2024-2026 emissions is January 2028.
Market Dynamics and Challenges
The market for CORSIA-eligible offsets is still developing. Currently, only a limited number of projects, like the one managed by the government of Guyana under the ART Trees standard, are issuing eligible credits for Phase 1 (7.1MtCO2e, but not solely intended to be used under CORSIA). This has led to uncertainty regarding the true market value of these offsets due to the limited supply. By 2025, other standards like GS and VCS are expected to be fully compliant and approved, potentially increasing the available supply of offsets significantly.
Future Projections
The demand for carbon credits is projected to increase substantially during the mandatory phase from 2027 to 2035. Estimates from AlliedOffsets and IETA report, suggest that the demand could range between 50 to 230 million credits for 2024-2026 Phase 1, with an expected undersupply of 34 million credits. This undersupply is contingent on the fact that there are no changes in ICAO approvals and new Letter of Approvals given by countries allowing credits to be Correspondingly Adjusted.
Conclusion
CORSIA is expected to drive a significant increase in demand for carbon credits, providing a robust incentive for further development and verification of high-quality carbon offset projects. This program represents a critical step towards achieving a more sustainable aviation industry. While the initial phases allow for a gradual build-up of compliance mechanisms and market responses, the mandatory phase from 2027 will mark a significant shift towards rigorous climate action in aviation. The successful implementation of CORSIA will depend on the continued collaboration between airlines, carbon standards, and national governments to ensure the integrity and transparency of carbon offsets.
Article written by :
Geoffrey Labaume
Head of Offset Partnership
Removall’s goal is to accelerate and scale investment in certified carbon offset projects that remove carbon from the atmosphere.
While we currently focus on Nature-Based Solutions and ecosystem restauration projects, we are also look carefully at technology-based sequestration projects and methodologies.
As carbon removal projects can sometimes be quite complex, we prepared an analysis note that provides an overview of the characteristics and challenges of carbon capture projects and explains why they are so important in the fight against climate change and to contribute to achieve the net zero emissions objective.