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

1 Jul 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.

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

Pilot Phase (2021 – 2023)

During this phase, airlines were required to offset any annual emissions above what they emitted in 2019. However, due to the COVID-19 pandemic suppressing demand for flying, no airlines exceeded the baseline, leading to much reduced compliance costs.  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, airlines will be required to offset their annual emissions above 85% of their 2019 baseline (scaled by the aviation sector’s emissions growth). With international aviation having largely rebounded from its COVID-induced slump, many airlines now expect to face CORSIA higher compliance costs.

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.

As of January 2024, 126 countries have agreed to participate in Phase 1, with this number expected to rise.

Eligible Units for Phase 1

As of May 2024, the ICAO has approved only two carbon standards to issue EEUs:

  1. American Carbon Registry (ACR)
  2. Architecture for REDD+ Transactions (ART)

Several major standards – including Gold Standard, Verra, and Climate Action Reserve, are awaiting their applications to be re-evaluated by ICAO in late 2024.

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 because only two standards have been approved to generate EEUs, and few countries have established processes for applying corresponding adjustments to projects. Negotiations on Article 6 of the Paris Agreement at COP29 in November 2024 will clarify these processes, increasing the supply of EEUs. 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 climate frameworks such as the Science Based Targets Initiative (SBTi). 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