{"id":25081,"date":"2026-07-27T15:53:57","date_gmt":"2026-07-27T19:53:57","guid":{"rendered":"https:\/\/blogs.edf.org\/energyexchange\/?p=25081"},"modified":"2026-07-27T15:58:01","modified_gmt":"2026-07-27T19:58:01","slug":"corsia-at-a-crossroads-the-next-year-will-determine-its-course","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2026\/07\/27\/corsia-at-a-crossroads-the-next-year-will-determine-its-course\/","title":{"rendered":"CORSIA at a crossroads: The next year will determine its course"},"content":{"rendered":"\n

By Pedro Barata, Roh Ramirez and Pedro Piris-Cabezas<\/em> <\/p>\n\n\n\n

Just over eighteen months from today, the world\u2019s first truly global carbon market will face a consequential deadline. Airline operators will be required to fulfill their offsetting obligations under the first phase of the International Civil Aviation Organization\u2019s Carbon Offsetting Reduction Scheme for International Aviation.<\/p>\n\n\n\n

This deadline has weighed heavily on many of us who have worked hard over the years to make CORSIA a success. CORSIA was designed to achieve carbon-neutral growth in international aviation from 2021-2035. However, as airlines approach the January 31, 2028 deadline to retire Eligible Emissions Units covering 2024-2026 emissions, supply for these units faces tight constraints.<\/p>\n\n\n\n

What happens over the course of the next year will define CORSIA\u2019s role, not just to decarbonize the aviation sector, but as a backbone of global carbon markets.<\/p>\n\n\n\n

Where are we: CORSIA 2024-2026<\/strong><\/p>\n\n\n\n

This coming October will mark CORSIA\u2019s tenth anniversary. Adopted in October 2016, the flagship United Nations market-based mechanism for international aviation is designed to be implemented in three phases: (1) the pilot phase (2021-2023); (2) Phase 1 (2024-2026); and (3) Phase 2 (2027-2035). The pilot and first phase are voluntary, but in 2027, CORSIA will be mandatory for States with a larger aviation footprint. As of July 2025, 130 States confirmed voluntary participation in CORSIA\u2019s pilot and first phase.<\/p>\n\n\n\n

The impact of COVID-19 on the aviation industry significantly reduced emissions in the sector, which meant that CORSIA\u2019s pilot phase did not create offsetting obligations. However, due to CORSIA\u2019s tightened cap and the industry\u2019s quick recovery with record-breaking volumes of passenger traffic in 2025, Phase 1 of CORSIA is expected to generate <\/a>offsetting requirements of 100-150 million tonnes of CO2, according to ICAO.<\/p>\n\n\n\n

To fulfill their offsetting obligations, air carriers can either use CORSIA eligible fuels, including sustainable aviation fuels and lower carbon aviation fuels of fossil origin, or purchase and cancel CORSIA Eligible Emissions Units (EEUs) that meet specific emission unit criteria and can only be issued by eligible offsetting programs. Each EEU represents 1 tonne of CO2 reduction, avoidance or removal outside of the aviation sector. As of today, ICAO has recognized ten emission unit programs that can issue EEUs for Phase 1 covering activities such as: high integrity jurisdictional REDD+<\/a>, carbon capture and storage, clean cook stoves projects and certain renewable electricity projects, among other activities.<\/p>\n\n\n\n

According to ICAO\u2019s own live tracker<\/a>, there are only around 41 million EEUs verified, issued and labeled as eligible by the programs. Considering an expected demand of between 100-150 million tCO2 for 2024-2026 according to ICAO, this implies that we still need up to four times the current level of eligible EEUs for air carriers to meet their offsetting obligations in time for the first consequential deadline in January 2028 \u2013 making this one of the strongest demand signals in global carbon markets today.<\/p>\n\n\n\n

As of today, host-country authorization \u2013 a critical requirement to avoid double counting and ensuring the integrity of the units \u2013 continues to be the main hurdle to a robust EEU supply. Nonetheless, as reported <\/a>by the Article 6 Implementation Partnership, progress is evident. Fourteen countries have authorization and tracking arrangements in place while an additional eighty-six countries are either considering or in the process to have these in place.<\/p>\n\n\n\n

Some potential turbulence and bright developments along the way<\/strong><\/p>\n\n\n\n

Over the last couple of years, new geopolitical shifts, weakened climate momentum and renewed energy insecurity have complicated countries\u2019 efforts to meet CORSIA obligations and sustain focus on long-term climate solutions. Recent volatility in global oil markets has also shifted the aviation industry\u2019s focus away from decarbonization.<\/p>\n\n\n\n

Adding another layer of complexity, the EU Commission last week issued <\/a>its assessment of CORSIA to date and its effectiveness as a tool to reduce climate pollution from aviation within the European Economic Area. CORSIA owes its existence, in part due to the EU\u2019s proposal in 2008 to include all flights arriving and departing from European airports in its EU Emission Trading System (EU ETS). Major backlash from the United States, China, Japan and other countries led to a decision by the EU to \u201cstop the clock\u201d and allow for a global measure (what is now CORSIA) to address international aviation emissions. On July 17, 2026, the European Commission proposed to partially lift that measure for four years for some routes beginning in 2029.<\/p>\n\n\n\n

In its environmental integrity assessment of CORSIA, the Commission underscored that ICAO had not strengthened its ambition and that State participation in the global market-based measure still represented less than 70% of international aviation emissions. The Commission also underscored the need to address \u201chub leakage\u201d to inform its proposal.<\/p>\n\n\n\n

The EU Commission is proposing to:
\u2022 Expand EU ETS coverage to international aviation covering all routes departing from the EEA and landing within 5,000 kilometers from the largest hub in central Europe (presumably Frankfurt), including flights to hubs in the Middle East and North Africa but effectively excluding flights landing from the United States, Latin America or China.
\u2022 Deduct the cost of emissions covered by CORSIA from the newly covered routes in the EU ETS based on a credit price index.
\u2022 Expand coverage for all business jet flights that otherwise fell below a minimum emissions threshold.
\u2022 Review the EU ETS coverage of international aviation and restrict its application if by July 2032: (1) CORSIA has been strengthened to achieve ICAO\u2019s long-term aspirational goal, towards meeting the Paris Agreement goals; (2) States participating in CORSIA represent more than 70% of international aviation emissions.<\/p>\n\n\n\n

In parallel, the EU Commission is reviewing whether to allow the purchase of international carbon credits toward its 2040 climate targets, which could expand the global supply of carbon credits in the coming years and improve the EU\u2019s position in global climate diplomacy<\/a>. If greenlit, this could create an additional market signal for investors and project developers of offsetting programs. The framework expected later this year will set the environmental integrity and quality bar, government standards and safeguards that will shape the relevant offset supply markets from the start. Though not directly involving CORSIA initially, this will inevitably have an impact \u2013 CORSIA offset supply markets will quickly see dramatic improvement around the world as host countries finalize terms and put relevant infrastructure into place, incentivized as sellers to the European buyer.<\/p>\n\n\n\n

From a legislative perspective, it is important to recall that the July 17 EU Commission proposal is simply the beginning of a long and unpredictable EU co-decision legislative process that will end up with a Trialogue involving the co-legislators and the Commission sometime in 2027.<\/p>\n\n\n\n

Moving forward with a stronger integration of global carbon markets<\/strong><\/p>\n\n\n\n

At this crossroads, and to ensure CORSIA\u2019s success in the near term, it is crucial to support and build capacity for host countries to be able to generate high integrity EEU-generating units. It is crucial that sufficient credit supply is generated in the coming 18 months, and that such supply is indeed leading to not only emission reductions but with adequate safeguards and co-benefits.<\/p>\n\n\n\n

In that regard, EDF will continue to support that effort by providing host country support and advice on how to consider and structure their authorization processes, while helping proof of concept carbon credit transactions at large scale in the immediate future. EDF will also continue working toward strengthening CORSIA\u2019s ambition in line with ICAO\u2019s net zero carbon goal by 2050 and expanding its scope to cover all climate impacts, notably from condensation trails and nitrogen oxides, while minimizing public health impacts.<\/p>\n\n\n\n

A narrow window and a real opportunity<\/strong><\/p>\n\n\n\n

The tenth anniversary of CORSIA\u2019s adoption arrives alongside its first real test: a supply of eligible emissions units that, as it stands, covers only a fraction of what airlines will need to meet their Phase 1 obligations by January 2028 \u2013 not to mentioned larger demand for Phase 2 covering 2027-2035, which ICAO estimates between 880 and 1350 million tons. Closing the supply gap will take sustained, practical work in the countries positioned to generate units, paired with the kind of integrity and safeguards that make those credits trustworthy.<\/p>\n\n\n\n

None of this is guaranteed, and the flight path between now and 2028 will have real challenges. But the pieces are visibly moving in the right direction, and the next year offers a rare opportunity to prove that a truly global carbon market can work \u2013 for aviation, and as a model for the climate finance architecture the world still needs to build.<\/p>\n\n\n\n

John P. Schmitz contributed to this post.<\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By Pedro Barata, Roh Ramirez and Pedro Piris-Cabezas Just over eighteen months from today, the world\u2019s first truly global carbon market will face a consequential deadline. Airline operators will be required to fulfill their offsetting obligations under the first phase of the International Civil Aviation Organization\u2019s Carbon Offsetting Reduction Scheme for International Aviation. 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