Navigating CORSIA: An introduction to Carbon Offsetting and Reduction for International Aviation

CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is the global market-based initiative aimed at reducing emissions from international aviation. It offers a unified approach, moving away from fragmented national or regional regulations, thereby minimizing market distortions and respecting the varying capabilities of International Civil Aviation Organization (ICAO) Member States. Under CORSIA, airlines are ...

Chimdi Obienu & Luke Mendenhall

9 Dec 2024 4 mins read time

CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) is the global market-based initiative aimed at reducing emissions from international aviation. It offers a unified approach, moving away from fragmented national or regional regulations, thereby minimizing market distortions and respecting the varying capabilities of International Civil Aviation Organization (ICAO) Member States. Under CORSIA, airlines are required to purchase carbon credits to offset CO2 emissions that cannot be mitigated through technological advancements, operational improvements, or sustainable aviation fuels.

In this blog, we explore the current status of CORSIA, anticipated updates, and how airlines can prepare for upcoming changes.

CORSIA Overview

Established by International Civil Aviation Organization (ICAO) in 2016, CORSIA aims to help reduce and offset civil aviation emissions from 2021 onwards. Airlines are required to offset annual emissions exceeding an agreed baseline, by purchasing carbon credits, known as Eligible Emissions Units (EEUs). Additionally, airlines and other aircraft operators can minimize their emissions and subsequent offsetting obligations by using eligible Sustainable Aviation Fuels (SAF), in place of traditional, carbon-intensive jet fuel.

CORSIA implementation is divided into three phases:

  • Pilot Phase (2021 – 2023)
  • Phase 1 (2024 – 2026)
  • Phase 2 (2027 – 2035)

Participation in the Pilot Phase and Phase 1 is voluntary for countries, regulating emissions from flights to and from their airports. From Phase 2, participation becomes mandatory for most ICAO member states, with a few exceptions. As of November 2024, 129 countries have agreed to voluntarily participate in Phase 1.

Navigating CORSIA: An introduction to Carbon Offsetting and Reduction for International Aviation
Source: IATA

Pilot Phase (2021 – 2023)

During this phase, offsetting obligations only kicked in if the aviation industry exceeded its 2019 baseline. However, due to the COVID-19 pandemic suppressing demand for flying, this baseline was not exceeded, meaning airlines were not required to offset any of their 2021-2023 emissions.

In any case, the ICAO approved nine certification standards to issue EEUs:

Navigating CORSIA: An introduction to Carbon Offsetting and Reduction for International Aviation

Phase 1 (2024 – 2026)

During Phase 1, offsetting obligations will apply if industry emissions exceed 85% of the 2019 baseline. With international aviation having largely rebounded from its COVID-induced slump, many airlines will face significant costs to retire sufficient credits before the compliance deadline.

Airlines must retire credits to cover their Phase 1 by January 31, 2028. Bloomberg research suggests airlines’ Phase 1 offsetting requirements will be over 250 million tCO2e.

A significant change in Phase 1 is that eligible credits must be subject to Corresponding Adjustments. These occur when the country where the carbon credits are generated adds an equivalent level of emissions to its national emissions inventory. This ensures the emissions reductions or removals from the project are not double counted by the project host country and whoever buys the credits. This concept was established under Article 6 of the Paris Agreement.

Certification standards must require project developers to have a third-party mechanism guaranteeing the provision of correspondingly adjusted credits (i.e. insurance). This insurance must protect buyers if the host country revokes the authorization of issued credits, thereby making them ineligible for CORSIA.

Eligible Units for Phase 1

As of November 2024, the ICAO has approved 6 standards to issue EEUs:

  • American Carbon Registry (ACR)
  • Architecture for REDD+ Transactions (ART)
  • Gold Standard
  • Verified Carbon Standard (Verra)
  • Climate Action Reserve (CAR)
  • Global Carbon Council

All eligible units must have vintages from 2021-2026, and from projects that began their first crediting periods no earlier than 2016. The official ICAO CORSIA EEUs document details full eligibility criteria for each certification standard. A key takeaway is that large shares of units from major project categories are excluded from eligibility:

  • REDD+ (non-agriculture)
  • Grid-connected renewable energy
  • Engineered removals / carbon capture and storage (CCS)

Several other standards have been granted conditional approval, pending updates to their methodologies and processes:

  • BioCarbon Fund Initiative for Sustainable Forest Landscapes
  • Cercarbono
  • Forest Carbon Partnership Facility
  • Isometric
  • Thailand Voluntary Emissions Reduction Programme

Phase 2 (2027 – 2035)

Phase 2 is still in its developmental phase but will build on earlier foundations while introducing more stringent emission reduction measures. Participation will be mandatory for most ICAO member states.

How EcoAct Can Help

Currently, there are limited CORSIA-eligible credits available as few countries have established processes for applying corresponding adjustments to projects. However, after successful negotiations on Article 6 of the Paris Agreement at COP29, the supply of EEUs will expand significantly in 2025. As supply grows, organizations outside the aviation sector may also seek CORSIA-eligible credits, which are expected to trade at a premium.

EcoAct’s Carbon Market specialists can guide you through the complexities of the voluntary carbon market, including CORSIA rules, UN negotiations, and the evolution of influential frameworks such as the Integrity Council for the Voluntary Carbon Market (ICVCM). We help build robust carbon credit portfolios based on regulatory and voluntary offsetting requirements, budget constraints, and project preferences. Additionally, we can assess the financial case for engaging in different spot market procurement models or developing carbon projects of your own.

Get in touch with EcoAct experts to navigate the complexities of CORSIA and ensure your airline is prepared for current and future compliance requirements

Navigating CORSIA: An introduction to Carbon Offsetting and Reduction for International Aviation