What is CORSIA? Aviation Carbon Offsetting Explained

CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is a global program requiring airlines to offset emissions that exceed baseline levels on international flights. Launched by the International Civil Aviation Organization (ICAO) and operational since 2019, it represents the first market-based measure applied to an entire economic sector. For airlines, carbon market participants, and project developers, understanding CORSIA is essential as it reshapes demand for carbon credits across the voluntary market.

How CORSIA Works

CORSIA operates on a route-based approach, applying to international flights between participating countries. As of January 2026, 130 states have joined the program, covering approximately 99% of international aviation CO₂ emissions.

Airlines with annual emissions exceeding 10,000 tonnes of CO₂ from aircraft weighing more than 5,700 kilograms must monitor, verify, and report emissions annually. When their emissions exceed a predetermined baseline, they must purchase and cancel CORSIA Eligible Emissions Units (EEUs) to offset the difference. Alternatively, operators can reduce their offsetting requirements by using CORSIA-eligible sustainable aviation fuel.

The scheme's baseline was originally set at 2019 emissions for the pilot phase. For Phase 1 (2024–2026) and beyond, the baseline tightened to 85% of 2019 emissions, creating a more ambitious target.

CORSIA Phases and Compliance Timeline

CORSIA is being implemented across three phases.

• The pilot phase (2021–2023) was voluntary, with offsetting requirements calculated against 2019 emissions. Due to COVID-19's impact on air travel, international aviation emissions on participating routes did not exceed baseline levels during this period, resulting in minimal offsetting obligations.

• Phase 1 (2024–2026) remains voluntary but introduces the stricter 85% baseline. Airlines must demonstrate compliance by cancelling sufficient EEUs by January 2028. Industry body IATA estimates airlines will need to purchase over 200 million EEUs during this phase.

• Phase 2 (2027–2035) becomes mandatory for all ICAO member states, with certain exemptions for developing economies and states with minimal aviation activity.

What Qualifies as a CORSIA Eligible Emissions Unit

Not all carbon offsets qualify under CORSIA. Credits must meet specific eligibility criteria established by ICAO's Technical Advisory Body.

Six carbon standards are currently approved to supply EEUs for Phase 1: American Carbon Registry, Architecture for REDD+ Transactions (ART TREES), Verra's Verified Carbon Standard, Gold Standard, Climate Action Reserve, and Global Carbon Council. Credits must come from projects that started their first crediting period on or after January 1, 2016, with emission reductions occurring from 2021 onwards.

For post-2021 vintages, a critical requirement is host country authorization under Article 6 of the Paris Agreement. This ensures credits cannot be double counted toward both a country's Nationally Determined Contribution and an airline's CORSIA obligations. Projects must also secure insurance or other safeguards against double claiming.

CORSIA Supply Is Growing

Early concerns about CORSIA-eligible supply have begun to ease as more credits receive the necessary tagging and authorizations.

Verra has tagged millions of credits from cookstove projects across Rwanda, Sierra Leone, and The Gambia under the DelAgua program. Guyana has finalized corresponding adjustments for REDD+ credits, making them eligible for airline compliance. Additional supply is expected from Zimbabwe, where four Gold Standard projects have received Letters of Authorization, pending ICAO recognition of the country's national registry.

Despite this growth, the gap between tagged supply and estimated demand remains significant. Annual demand is projected at 40–50 million tCO₂e, while cumulative Phase 1 demand could reach 150–200 million credits. The pipeline of genuinely deliverable inventory depends on host country authorization timelines, corresponding adjustment capacity, and competition from other Article 6 demand channels.

For project developers with Article 6 pathways secured, CORSIA eligibility offers access to a compliance-driven market with strong pricing dynamics relative to voluntary buyers.

Why CORSIA Matters for Carbon Markets

CORSIA creates significant compliance-driven demand that flows into the voluntary carbon market infrastructure. Unlike cap-and-trade systems with government-issued allowances, CORSIA relies on credits from approved carbon standards, directly linking airline compliance to project-level supply.

This structure creates both opportunities and risks. Supply constraints around Article 6 authorizations have driven expectations of price premiums for genuinely deliverable inventory. Spot markets for named, high-quality projects typically trade above standardized contracts, reflecting delivery certainty and quality signalling.

A secondary consideration is the link between jet fuel costs and compliance budgets. Jet fuel typically represents around a quarter of airline operating costs. Sustained fuel price pressure can tighten budgets for environmental compliance spend, particularly for carriers with weak margins or limited hedging.

Key Takeaway

CORSIA establishes the framework for decarbonizing international aviation through market-based mechanisms. Supply is growing as registries tag eligible credits and host countries issue authorizations, but the path from "eligible" to "available at scale" involves meaningful bottlenecks. For airlines, early procurement reduces exposure to supply constraints and enforcement risk. For project developers, CORSIA eligibility offers premium market access in a compliance environment where demand will only increase as Phase 2 approaches.

Market data sourced from Quantum Commodity Intelligence, January 2026.