Aviation Carbon+ 2025: Key takeaways for navigating CORSIA compliance

Earlier last week, I attended Aviation Carbon+ in London, a leading forum for airlines, regulators, and carbon market participants. The conversations were clear: Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is no longer a future challenge. It is here and now. For me, the most important takeaway was how quickly compliance obligations are scaling and what that means for procurement strategies.

CORSIA: What it is and why it matters

CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is the first-ever global market-based measure developed by the International Civil Aviation Organisation (ICAO) to address aviation emissions. It applies to international flights only and covers CO₂ emissions that exceed the baseline level. Following a 2022 ICAO decision, the baseline for the current First Phase (2024–2026) is set at 85% of 2019 emissions, a change from the initial 2019-only baseline. Currently, 130 participants states have volunteered for the pilot, representing about 90 percent of international aviation activity.

Understanding CORSIA’s phased implementation

CORSIA is being rolled out in stages to allow airlines and states to adapt gradually, but each phase brings new obligations and strategic considerations:

• Pilot Phase (2021–2023): Voluntary participation, allowing early adopters to test reporting and credit sourcing.
• Phase I (2024–2026): Voluntary for states; airlines operating international flights between participating states must offset emissions above the baseline.
• Phase II (2027 onwards): Mandatory for most ICAO member states (with exemptions for Least Developed Countries, Small Island Developing States, and Landlocked Developing Countries), significantly increasing demand for offsets and sustainable aviation fuels

Why this matters:

Understanding these timelines is essential for planning procurement strategies, managing financial exposure, and aligning sustainability commitments with regulatory requirements.

Supply challenges and strategic action

The event highlighted a looming supply gap for CORSIA-eligible credits. While the list of approved programs is growing, the supply remains tight. Developers and host countries are under pressure to accelerate project pipelines, while airlines must diversify procurement strategies to mitigate risk.

For airlines, this means acting early:

• Lock in multi-year offtakes for EEUs
• Explore portfolio diversification to manage price volatility
• Engage with trusted partners to ensure credits meet CORSIA eligibility standards

Compliance challenges and market dynamics

At Aviation Carbon+, the dominant theme was clear: CORSIA Phase I is already reshaping compliance strategies across the aviation sector.

Offset Volume: According to ICAO, airlines will need to offset over 200 million tonnes of CO₂ during Phase I, with cumulative obligations projected to reach Around 200 million tonnes to 250 million tonnes by the end of phase 1.

• This scale of demand underscores the urgency for carriers to act now.

Cost comparison: The estimated total compliance cost for Phase I reaches approximately USD 8.4 billion in a scenario that accounts for the ambitious CAAF/3 vision—one that relies on a mix of Eligible Emission Units (EEUs) and Emissions Reduction (ER) from CORSIA Eligible Fuels (CEF).

• While SAF remains critical for long-term decarbonisation, EEUs currently offer the most cost-effective route for near-term compliance.

Market Outlook

In high-demand scenarios, EEU prices are expected to see significant upward pressure, driven by supply constraints and growing competition.

• Early engagement and forward purchasing strategies are essential for airlines seeking to manage compliance costs and secure Eligible CEEUs before the market tightens.

What’s next for aviation compliance?

Aviation Carbon+ made it clear that CORSIA is no longer a future challenge. It is here now. Airlines that act quickly will not only reduce compliance costs but also strengthen their sustainability credentials in a market where transparency and integrity are under increasing scrutiny.

Ready to Strategise Your Compliance?

At SmartestEnergy, we are committed to supporting aviation stakeholders with tailored solutions for carbon credit procurement and compliance strategies.

If you would like to discuss how we can help you navigate CORSIA, prepare for Phase II, or gain deeper insights from the conference, please reach out directly to our expert, Monty, today at: Monty-Browne@smartestenergy.com