First global airline emissions scheme faces 'a litmus test' as credits run short
UAL•Airlines may struggle to obtain enough eligible carbon credits for the first mandatory phase of the global aviation emissions scheme, with available supply estimated at no more than a quarter of demand. Airlines must buy credits by January 31, 2028, and compliance could cost the industry $3.6 billion to $9 billion.
1. Credit supply falls short
The first mandatory phase of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is expected to create demand for credits covering up to 200 million metric tons of carbon. Data from the International Civil Aviation Organization and industry sources indicate available credits could meet no more than a quarter of that demand, with only 11 countries positioned to supply credits.
2. Airlines face deadlines
Around 130 countries have signed up to phase 1, which runs from January 2024 through the end of 2027. Airlines under those countries’ jurisdictions must buy credits by January 31, 2028, or face penalties. Some airlines have delayed purchases while seeking clarity on penalties and credit supply; United Airlines said eligible offsets were constrained, while American Airlines cited uncertainty over supply and price.
3. Costs and approvals
Roland Berger estimated compliance could cost airlines $3.6 billion to $9 billion, assuming credits cost $20 to $50 each. Brazil said it had yet to begin authorising CORSIA projects, while Japan cited administrative constraints slowing approvals in some countries. ICAO said implementation by member states was on track and it would support governments in accelerating credit availability.
