ACS 2025: Timing, Risks Key Hurdles for CORSIA Compliance
Airlines are facing a growing disconnect between the timing of eligible carbon credit availability and their obligations under CORSIA, panelists said Wednesday at the Asia Climate Summit in Bangkok.
CORSIA, the United Nations-backed carbon offsetting scheme for international aviation, will become mandatory in 2027. At that point, most airlines will be required to offset emissions above 2019 levels using carbon credits approved by the International Civil Aviation Organization.
“The issue isn’t lack of supply—it’s timing,” said Alexander Lewis, head of carbon markets at Qantas Airways. He pointed to the challenge of aligning credit issuance with CORSIA eligibility requirements, especially those related to corresponding adjustments under Article 6 of the Paris Agreement.
A report released the same day by carbon credit rating agency Sylvera reinforced that view, projecting a supply of between 136 million and 274 million eligible credits for the first CORSIA compliance phase (2027–2030), against demand estimates ranging from 74 million to 144 million.
Project developers also face structural hurdles. Marianne Tan, associate director of policy and strategy at South Pole, noted that obtaining Article 6 authorization often requires signing letters of authorization and deeds of undertaking that commit project owners to replace credits if adjustments are denied—exposing them to both operational and financial risks.
Tan added that while the Article 6.2 rulebook offers some protection—prohibiting host countries from revoking corresponding adjustments once credits are transferred—developers are still seeking risk mitigation tools, including program-level buffer pools to spread exposure across portfolios.
Demand uncertainty remains another critical issue. Malavika Prasanna, policy associate at Sylvera, said that actual credit uptake will largely depend on how different jurisdictions implement compliance.
Jurisdictions such as the U.K., European Union, Japan, Qatar and the United Arab Emirates have signaled their intent to enforce CORSIA obligations early, which could create stronger near-term market signals.
Ng Shao Hua, senior manager, global partnerships from Singapore’s National Climate Change Secretariat, echoed the point that clear domestic legislation will be a “game-changer” for unlocking real demand for eligible credits.
Singapore, he added, uses the CORSIA Technical Advisory Body’s assessments as a baseline for its own carbon tax credit eligibility, but applies an additional internal screening layer, reflecting the country’s higher bar for environmental integrity.
Procurement strategies among airlines vary. Waiting until the last year is probably not advisable, said Lewis, but every airline has its own approach to risk. Qantas, for example, is actively entering into forward contracts with conditions precedent tied to the eventual CORSIA eligibility of the credits.
On pricing, Sylvera forecasts a range of $25 to $36 per metric ton by 2027, though the market continues to face uncertainty due to fragmented regulatory guidance. Lewis added that the $30/mt range “is in the ballpark,” referencing recent auction results as indicative of early price discovery.
The most recent auction of CORSIA-Eligible Emissions Units, conducted in January by the government of Guyana, cleared at $21.70/mt and involved 11 participating airlines, according to official disclosures.
The OPIS CORSIA Eligible Offsets mean was last assessed on Friday at $16.975/mt, with a range of $12.25/mt to $21.70/mt.
The Asia Climate Summit, organized by the IETA, was held on July 8-10.
–Reporting by Lujia Wang, lwang@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com