The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) represents the aviation industry's most ambitious climate initiative, fundamentally transforming how international airlines approach carbon management. The carbon offsetting and reduction scheme for international aviation creates a unified framework for tackling aviation's climate impact while providing clear pathways for sustainable growth. As implementation deadlines approach, airlines must develop comprehensive strategies that address both immediate compliance requirements and long-term sustainability goals within this evolving regulatory landscape.
This comprehensive guide provides aviation sustainability professionals with the essential knowledge and practical tools needed to navigate CORSIA successfully, from understanding baseline calculations to developing strategic CORSIA carbon credits procurement approaches that align with your organization's climate commitments.
CORSIA stands as the world's first mandatory sector-specific global market-based measure for climate action. Developed by the International Civil Aviation Organization (ICAO), this carbon offsetting and reduction scheme addresses emissions from international aviation through a comprehensive framework that combines monitoring, reporting, and offsetting requirements.
The scheme represents a paradigm shift in aviation environmental governance, moving from fragmented national approaches to a unified global system that ensures carbon neutral growth for the aviation sector.
Fig. 1: Aviation Emission vs Other Global CO2 Sources
The International Civil Aviation Organization designed CORSIA to fill a critical gap in global climate policy. Unlike domestic aviation emissions, which fall under national jurisdiction, emissions from international flights operate in a regulatory void that the United Nations Framework Convention on Climate Change (UNFCCC) couldn't effectively address.
CORSIA's route-based approach ensures that these cross-border emissions are captured and managed through a coordinated international framework, preventing the development of conflicting national measures that could fragment the global aviation market.
CORSIA operates as a bridge between the aviation sector and broader climate commitments under the Paris Agreement. While the Paris Agreement focuses on national climate targets, international flights don't neatly fit into any single country's carbon budget.
The scheme addresses this challenge by creating a sectoral approach that complements national climate efforts while maintaining the international character of aviation. This global market-based mechanism ensures that aviation's contribution to climate goals is measurable, reportable, and verifiable, supporting both sectoral carbon neutrality and broader international aviation climate goals.
The governance structure involves multiple layers of coordination. ICAO provides technical guidance and oversight, while ICAO member state compliance ensures national implementation through domestic regulations.
Aircraft operator responsibilities include monitoring, reporting, and offsetting obligations, supported by accredited verification bodies that ensure data accuracy and integrity. This multi-stakeholder approach, grounded in the Chicago Convention framework, requires state action plans that translate ICAO's technical requirements into enforceable national regulations.
CORSIA implementation phases follow a carefully structured timeline designed to balance environmental ambition with industry readiness. The pilot phase (2021–2023) introduced initial offsetting requirements and established foundational monitoring and reporting systems, while the voluntary first phase (2024–2026) continues these requirements for routes between participating states.
| Phase | Timeline | Participation |
| Pilot | 2021-2023 | Voluntary for states and airlines |
| First | 2024-2026 | Voluntary for states, mandatory for airlines |
| Second | 2027-2035 | Mandatory for states and airlines |
The pilot and first phases (2021–2026) apply only to international routes between participating states. The mandatory second phase (2027–2035) expands coverage to routes operated by most ICAO Member States, with limited exemptions for least developed countries, small island developing states, and others based on aviation activity.
Fig. 2: CORSIA Phase Timeline and Participation Overview (2021–2035)
The emissions baseline calculation underwent significant adjustment due to COVID-19's impact on aviation. Originally set as the average of 2019 and 2020 emissions, the baseline was modified to use 2019 levels only for the pilot phase, then adjusted to 85% of 2019 emissions for subsequent phases. This dynamic baseline approach ensures that offsetting requirements reflect realistic growth patterns while maintaining environmental integrity.
The Sectoral Growth Factor (SGF) represents one of CORSIA's most complex elements. This emissions growth factors system distributes offsetting obligations based on industry-wide growth rather than individual airline performance. The emissions coefficient calculation can produce counterintuitive results where faster-growing airlines may have lower offsetting obligations than slower-growing competitors, depending on their routes and the overall industry baseline.
CORSIA's route-based approach means compliance depends on both departure and arrival state participation. The scheme covers international flights between participating states, with specific exemptions for least developed countries, small island developing states, and countries with minimal aviation activity. This geographic coverage creates competitive dynamics where airlines may adjust route planning based on CORSIA participation status, particularly during the voluntary phases when coverage varies significantly.
Exempted country categories:
Airlines must implement comprehensive MRV systems that track fuel consumption, calculate CO2 emissions, and report data through ICAO's approved channels. The emissions reporting systems require annual submissions using the CERT tool, supported by detailed CORSIA monitoring plans that demonstrate compliance with ICAO's technical requirements. These systems must capture all fuel used on international routes covered by CORSIA, including detailed flight-by-flight tracking and documentation.
Fuel monitoring requires detailed tracking of all international flights, including fuel uplift records, flight plans, and operational data. The CO2 calculation follows standardized methodologies that convert fuel consumption to emissions using ICAO-approved factors. Airlines must maintain comprehensive records that support emissions verification process requirements, including fuel purchase receipts, flight logs, and operational documentation. The CERT tool provides standardized reporting formats that ensure consistency across operators and facilitate regulatory review.
Independent verification bodies must meet strict ISO standards and demonstrate technical competence in aviation emissions auditing. The verification process examines data accuracy, methodology compliance, and system reliability through detailed emissions audit requirements. Verifiers assess monitoring plans, review data management systems, and conduct site visits to ensure emissions data integrity. This independent verification creates regulatory confidence while providing airlines with professional assurance that their reporting meets CORSIA standards.
Airlines can reduce their offsetting requirements through alternative fuel adoption, particularly sustainable aviation fuel that meets ICAO's sustainability criteria. The SAF eligibility criteria include lifecycle emissions thresholds and sustainability standards that ensure genuine environmental benefits. Airlines can choose between two calculation methods: default lifecycle emissions values provided by ICAO or actual lifecycle emissions based on specific fuel pathway assessments. This flexibility allows operators to optimize their fuel choices while ensuring accurate emissions accounting.
CORSIA Eligible Emissions Units must meet stringent quality criteria. The approved standards include established voluntary carbon standards like Verra's Verified Carbon Standard (VCS), the Gold Standard, and the Climate Action Reserve, among others. These eligible carbon offset programs undergo regular review to ensure they maintain environmental integrity and meet CORSIA's evolving requirements for additionality, permanence, and robust monitoring.
Fig. 3: Project Types to Generate Carbon Credits
Airlines must develop strategic procurement approaches that balance cost, availability, and quality considerations. The carbon credit market offers diverse project types, from nature-based solutions like forestry and cookstove programs to technology-based projects such as renewable energy and industrial process improvements. Each project type presents different risk profiles, pricing structures, and co-benefits that airlines should evaluate against their sustainability objectives and budget constraints.
Aviation environmental standards under CORSIA emphasize additionality, permanence, and corresponding adjustments to prevent double counting. The corresponding adjustments mechanism ensures that host countries account for exported credits in their national inventories, maintaining the environmental integrity of international transfers. These quality measures address longstanding concerns about offset quality in voluntary carbon markets while providing regulatory certainty for aviation operators.
Carbon credit pricing reflects growing demand from both compliance and voluntary markets. Current market analysis suggests credit prices will continue rising as supply constraints meet increasing demand from CORSIA and other regulatory programs. Price forecasts indicate significant volatility driven by project development timelines, regulatory changes, and market speculation. Airlines benefit from developing long-term procurement strategies that secure credit supplies while managing price risk through portfolio diversification and forward contracting.
CORSIA's integration with Article 6 of the Paris Agreement creates important linkages between aviation offsetting and broader international carbon markets. The Article 6 framework requires corresponding adjustments for international credit transfers, ensuring that credits used for CORSIA compliance don't create double counting with national climate targets. The Integrity Council for the Voluntary Carbon Market (ICVCM) provides additional quality assurance through its Core Carbon Principles, which airlines increasingly reference when evaluating credit quality.
Letter of Authorization (LOA) & Corresponding Adjustment for CORISA eligible units
Many host countries are still developing their frameworks for issuing CAs and LoAs. Since ICAO requires a LoA as a condition for CORSIA-eligible credits, obtaining an LoA from the host country is essential for any project to qualify. As a result, only a limited number of credits currently meet the eligibility criteria under CORSIA.
Fig. 4: Carbon Market Interconnection, ICAO, Paris Agreement (Article 6), ICVCM relationship
Alt: ICAO, Paris Agreement (Article 6), ICVCM relationship
Offset8 Capital's projects, including their expanding Malawi initiative, demonstrate how high-quality credits, which meets CORSIA eligibility like Letter of Authorization (LOA) and broader market integrity standards like Core Carbon Principles (CCP) label by the Integrity Council for the Voluntary Carbon Market (ICVCM).
The iRise project in Malawi combines reforestation with cookstove distribution, creating verified carbon units that support multiple Sustainable Development Goals while providing airlines with credible offset solutions. This approach shows how strategic partnerships can deliver environmental impact while meeting compliance requirements.
Airlines face multiple implementation challenges as large under supply is expected in the CORSIA market forecast. International Emissions Trading Association (IETA) has found only 29 active Letters of Authorization (LOAs). Only 15 Mt CO2e of existing credits are fully CORSIA eligible. Most eligible projects are located in the Global South, where only a handful of countries have demonstrated willingness and readiness to issue LOAs.
Fig.5 : CORSIA pricing forecast, Total costs during Phase I could amount to $1.9-7.0
billion and $13-109 billion in Phase II. (Sources: MSCI, Allied Offsets, ICAO, IETA)
Airlines should develop comprehensive compliance strategies that integrate carbon management with broader sustainability objectives. This includes establishing dedicated CORSIA teams, implementing robust monitoring systems, and developing supplier relationships with trusted carbon credit providers. The key to success lies in treating CORSIA as a strategic opportunity rather than merely a compliance burden, using the framework to drive operational improvements and stakeholder engagement.
Initial implementation steps:
Strategic considerations:
Offset8 Capital provides specialized expertise in carbon markets and high-quality offset procurement, helping airlines navigate CORSIA compliance while supporting broader decarbonization goals. As a regulated firm based in Abu Dhabi Global Market, Offset8 combines deep market knowledge with institutional-grade investment solutions that deliver both financial returns and environmental impact. Our focus on nature-based solutions and community development creates offset opportunities that align with corporate sustainability objectives while meeting stringent regulatory requirements.
Our partnership with iRise Carbon in Malawi exemplifies this approach. The project combines large-scale Afforestation, Reforestation, & Revegetation (ARR) with a cookstove distribution program. While the ARR activities drive long-term climate impact,the cookstove program is the primary source of CORSIA-eligible credits.The initiative will be expanded from 140,000 to 300,000 high-efficiency cookstoves that will be distributed to households across the country, transforming daily life for over 300,000 families and creating more than 400 local jobs.
CORSIA represents aviation's first comprehensive approach to managing its climate impact, creating accountability mechanisms that drive both immediate emissions mitigation measures and long-term technological innovation. While the scheme faces implementation challenges and market uncertainties, it provides a crucial framework for sustainable aviation growth that balances environmental responsibility with economic viability. Airlines that embrace CORSIA as a strategic opportunity, rather than merely a compliance burden, will be better positioned to lead the transition toward net zero aviation.
*Disclaimer: This commentary is for informational purposes only and should not be considered financial, investment, or regulatory advice. Offset8 Capital Limited is regulated by the ADGM FSRA (FSP No. 220178). No assurances or guarantees are made regarding its accuracy or completeness. Views expressed are our own and subject to change
Participation requirements vary by phase. Both the pilot phase (2021–2023) and the first phase (2024–2026) are voluntary for states, and apply only to international routes between participating states. The second phase (2027–2035), however, becomes mandatory for all ICAO Member States, with exemptions based on state-level criteria. As CORSIA uses a route-based approach, only routes between participating states are subject to offsetting requirements — routes involving exempted states (such as LDCs or SIDS) are not covered.
Costs depend on route coverage, emissions levels, and carbon credit prices. Industry estimates suggest annual costs vary significantly based on operational factors and market conditions. Airlines must secure carbon offtakes now to avoid higher
costs, which could severely impact compliance, operational efficiency, and profitability
EEUs are carbon credits from ICAO-approved programs that meet strict quality criteria including additionality, permanence, and robust monitoring. Airlines can use these credits to offset emissions above the CORSIA baseline through verified retirement processes.
