ICAO CORSIA Framework

Overview

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a UN initiative developed by the International Civil Aviation Organization (ICAO) to address greenhouse gas emissions from international aviation. Implemented in 2021, CORSIA represents the global aviation industry's commitment to carbon neutral growth from 2020 onwards.

Key Components

Regulatory Scope

• Participating Airlines: 670+ airlines across ICAO member states
• Coverage: International flights only (excludes domestic aviation)
• Phase 1 (Pilot): 2021-2026 (voluntary participation, 100 countries currently engaged)
• Phase 2: 2027-2035 (mandatory participation for most ICAO members)
• Phase 3: 2036-2050 (long-term monitoring and compliance)

Compliance Mechanisms

Airlines must offset emissions growth above the 2019 baseline through three primary methods:

1. Sustainable Aviation Fuels (SAF) - Drop-in jet fuels with documented lifecycle carbon reductions
2. Technical & Operational Improvements - Engine efficiency, flight path optimization, taxi procedures
3. Carbon Credits - Eligible Emissions Units (EEUs) from approved standards and registries

Carbon Credit Demand

Recent forecasts indicate CORSIA could generate demand for:

• Minimum: 100 million tonnes CO2e annually by Phase 1
• Range: 135-182 million tonnes CO2e (most likely scenario)
• Maximum: 246 million tonnes CO2e under conservative estimates

Approved Standards & Certification

ICAO Approved Sustainability Certification Schemes (October 2024)

Organizations certifying CORSIA-eligible SAFs must use approved schemes:

• ISCC (International Sustainability and Carbon Certification)
• RSB (Roundtable on Sustainable Biomaterials)
• EISA (EU Emissions Trading System)
• ClassNK (Latest approval - October 2024)

CORSIA Eligible Emissions Units (EEUs)

Carbon credits accepted for CORSIA compliance must originate from:

• Verra VCS (Verified Carbon Standard) - Primary methodology
• Gold Standard - High-integrity, sustainable development projects
• UNFCCC programs - CDM (Clean Development Mechanism) methodologies
• Article 6 mechanisms - Paris Agreement international credit transfers

Insurance Requirements: All EEUs must carry insurance policies against issuance, retirement, and trading risks to ensure no double-claiming or credit fraud.

Compliance Timeline

ICAO 42nd Assembly Updates (October 2025)

Recent decisions from the ICAO Assembly advancing CORSIA implementation:

• New Carbon Standards Approved: Four additional independent standards granted full approval, expanding eligible SAF supply
• Reassessment Process: Phase 2 compliance requirements under review to improve accessibility
• Supply Chain Transparency: Enhanced traceability requirements for SAF production and retirement
• Reporting Standards: Harmonization with ISSB climate standards for financial institutions tracking aviation portfolios

Implementation Challenges

Technical Barriers

• Lack of SAF production infrastructure globally
• Limited availability of CORSIA-eligible carbon credits in all regions
• High carbon credit prices (£50-150+ per tonne) impacting airline economics

Market Considerations

• Supply bottleneck: Demand forecasted at 135-246 million tonnes; current global credit supply ~2 billion verified credits
• Geographic disparities in emissions factors for electricity-based carbon calculations
• Additionality concerns: Ensuring credits represent genuine emissions reductions, not "business as usual"

Regional Variations

• Developed nations (North America, Europe, Asia-Pacific) leading early compliance
• Emerging economies seeking flexibility and capacity-building support
• Least developed countries (LDCs) requesting exemptions or modified participation

Strategic Implications

For Airlines

• Operating costs: +0.5-2.0% depending on fuel prices and credit availability
• Competitive positioning: First-movers on SAF adoption gain regulatory goodwill
• Supply chain resilience: Critical to secure long-term SAF offtake agreements

For Carbon Projects

• Credit demand multiplier: CORSIA requirements drive 5-10x expansion in aviation-specific carbon project development
• Methodological innovation: New protocols emerging for forestry, renewable energy, and waste management projects
• Pricing stability: Mandatory offsets create floor prices, reducing credit volatility

For Financial Institutions

• Financed emissions: Aircraft financing pools now subject to Scope 3 tracking under ISSB standards
• Climate risk disclosure: Portfolio climate impact increasingly scrutinized by regulators (EU, UK, Canada)
• Hedging strategies: Banks developing CORSIA-linked financial products

Related Frameworks

• Paris Agreement Article 6: International carbon market mechanisms
• ISSB S2 Standard: Climate-related financial disclosures for asset managers
• ICAO Annex 16 Volume IV: Technical specifications and measurement methodologies

Document Status

Last Updated: October 2024 | Authority: International Civil Aviation Organization | Public Access: Full framework available at icao.int