The evolution of CORSIA

The aviation industry has always excelled at collaboration where appropriate, sharing relevant standards and data to enhance safety and encourage a level playing field where global, regional and local airlines can compete relatively equitably.

One area where this has been apparent is environmental standards. Recognizing and responding to aviation’s environmental responsibilities could be a challenge if the industry didn’t come together to work out what is possible, fair, and realistic.

Part of the approach over the last few years has been the introduction of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) in 2016, managed by the International Civil Aviation Organization (ICAO). CORSIA, which has the backing of the United Nations, has been created to reduce CO₂ emissions in the aviation sector and is intended to deliver a consistent approach to carbon offsetting and ensure that the industry can prove its commitment to CO₂ reduction. Aircraft operators can meet their compliance obligations through a combination of both CORSIA eligible fuels (CEFs) and CORSIA Eligible Emissions Units (EEUs)^[1].

Under the CORSIA framework, airlines need to use verified EEUs to offset emissions growth from international flights. We last wrote about CORSIA when it entered its first phase at the start of 2024, and it has continued to grow since then.

CORSIA’s impact on the international aviation industry

CORSIA aims to reduce CO₂ emissions by requiring airlines to offset emissions growth above 85% of 2019 levels. It is intended to complement other emission reduction efforts such as technological innovations, operational improvements and sustainable aviation fuels (SAFs) to meet ICAO’s long-term environmental aspirations^[2].

The challenge is that carbon offsetting schemes can be complicated and there is always a risk that they will fail to deliver what is promised. From the perspective of an individual airline, ensuring that the projects offer the expected emissions reductions can be a time-consuming process, so having an accredited, industry-wide scheme with international backing and scrutiny, such as CORSIA, brings accountability to the system.

In short, CORSIA is the only global market-based scheme specifically designed to reduce emissions from international air transportation and is critical to airlines’ decarbonization efforts^[3].

Evolution of CORSIA

CORSIA’s first phase began in January 2024, and there have been several developments since then. The number of participating countries has risen from 126 during the initial phase to 130 of the 193 ICAO members from January 2026^[4]. The scheme becomes mandatory in January 2027 and is expected to run until 2035. However, it should be pointed out that there are a number of countries that are exempt from mandatory participation including those classified as least developed countries, small island developing states and landlocked developing countries^[5].

The availability of EEUs is critical to CORSIA’s success, particularly as it moves towards mandatory implementation. While stakeholders want to ensure market liquidity, having too many airlines chasing too few EEUs could drive price inflation as each seeks to comply with its obligations.^[6] The positive news is that the number of approved carbon registries increased steadily during 2025, widening the pool of available EEUs^[7].

There has also been an increase in CEFs as well as amendments to three ICAO documents related to CEFs, including a new CORSIA approved Sustainability Certification Scheme and feedstocks^[8]. CORSIA has a list of eligible feedstocks for SAFs, which airlines can use to reduce their need to purchase offsets, although concern around the availability of SAFs continues^[9].

The double counting risk

A core element of ICAO’s eligibility criteria for EEUs is the requirement that crediting programs demonstrate robust safeguards against double counting, such as rules governing issuance, transfer and claiming^[10].

To do this, ICAO’s framework requires that carbon credits used for CORSIA are accompanied by a Letter of Authorization (LoA) issued by the host country of the carbon project. The LoA confirms that the associated carbon credits may be transferred internationally and that the host country will not count the underlying emissions reductions towards its own Nationally Determined Contribution (NDC). In conjunction with the LoA, the host country must apply a corresponding adjustment, an accounting mechanism under Article 6 of the Paris Agreement that ensures the emissions reduction is not claimed by both the project country and the airline that uses the credit^[11].

Under CORSIA, carbon registries assume the liability associated with double counting. To manage this risk, carbon credit project developers are required to follow one of two pathways to ensure compliance with registry requirements. They must either:

• Provide evidence that a corresponding adjustment has already been recorded in the country’s Biennial Transparency Report (BTR) or
• Offer a legally binding commitment such as a Deed of Undertaking (Gold Standard)^[12] or a CORSIA Accounting Representation (Verra)^[13], backed by an approved insurance policy, that guarantees replacement or compensation if credits are double claimed^[14]

In practice, most registries now require both. While there are insurance products available that can mitigate some of the risk, the Paris Agreement Crediting Mechanism^[15] corresponding adjustment requirement remains mandatory. This system is designed to reinforce environmental integrity under CORSIA and reduce the potential for political or accounting instability within host countries. ^[16]

Insurance for project developers

Until recently, the only provider of an ‘eligible guarantee’ (insurance) for CORSIA compliant projects was the Multilateral Investment Guarantee Agency (MIGA), the World Bank’s political risk insurance arm. As CORSIA moved into its implementation phase, the private insurance market began to lobby with relevant verification bodies to be able to provide insurance alongside MIGA’s offering.

In July 2025, Verra and Gold Standard, two CORSIA approved carbon registries, produced guidelines setting out how private insurance products could be used to support Article 6 corresponding adjustment requirements under CORSIA.

Following this guidance, insurers developed products to meet the relevant requirements. As of publication in April 2026, Gold Standard and Verra have approved three insurance policies for use by project developers seeking eligibility under the first phase of CORSIA. The products approved are:

• Artio: CORSIA Adjustment Cover
• CFC Underwriting (CFC): CORSIA Guarantee Insurance
• Oka: Corresponding Adjustment Protect

These developments represent an expansion of available insurance products within the carbon market. As more insurers seek approval from the CORSIA approved carbon registries, project developers should benefit from increased insurance capacity and greater choice.

Insurance for the aviation industry

While current CORSIA compliant policies are predominantly aimed at carbon credit project developers, airlines preparing to participate in carbon markets can access to a wider range of carbon insurance products.

These products go beyond the specific CORSIA compliance requirements, offering financial protection against the key risks inherent in carbon markets, such as delivery failure, political risk and credit invalidation.

Non-delivery risk insurance

This insurance mitigates the risk of financial loss if a project under-delivers carbon credits prior to issuance, protecting airlines that have forward purchased credits. For example, if a carbon credit forestry project fails to reach maturity because of an adverse event such as a wildfire, non-delivery risk insurance can indemnify the airline for the financial value of non-delivered credits or provide replacement credits.

Political risk insurance

This provides protection against the financial loss of carbon credits resulting from political risks. For example, the risk that a host country may alter its regulations, impacting the carbon project, transaction or sale of credits. This includes a broader range of political risk perils beyond the corresponding adjustment protection within the CORSIA approved insurance policies listed above.

Post-delivery risk insurance

This provides financial indemnification for events occurring after issuance that adversely impact carbon credits. It protects buyers against post-issuance risks such as credit invalidation and non-permanence.

After a development path of more than a quarter of a century, CORSIA is now a reality for much of the aviation industry and is due to extend further over the next 12 months. At this point, the framework appears to be operating in the way that aviation organizations hoped, adapting to input from across the industry and simplifying a complex set of environmental requirements as far as possible. It is likely to continue to be a much-debated subject as it moves towards the mandatory phase in 2027.

To find out more about how we can help manage your aviation and carbon credit risks please contact the team.

Footnotes

1. An introduction to CORSIA eligible fuels: what are they and why are they relevant for CORSIA? Return to article undo
2. Long term global aspirational goal (LTAG) for international aviation. Return to article undo
3. UK sets out next steps to help decarbonise aviation sector. Return to article undo
4. ICAO CORSIA News. Return to article undo
5. ICAO CORSIA Factsheet, page 5. Return to article undo
6. CORSIA Credits Soaring Costs: How They Are Reshaping Aviation’s Future. Return to article undo
7. ICAO approves Isometric carbon removal credits for CORSIA compliance. Return to article undo
8. CORSIA Eligible Fuels. Return to article undo
9. Global SAF supply to fall 23 million mt short of demand by 2035: SkyNRG. Return to article undo
10. ICAO document – CORSIA Emissions Unit Eligibility Criteria. Return to article undo
11. Guidance Document for Host countries concerning the issuance of CORSIA Eligible Emissions Units. Return to article undo
12. CORSIA – Criteria For Approved Insurance Policies Or Related Instruments. Return to article undo
13. Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Label Guidance. Return to article undo
14. What is CORSIA? Return to article undo
15. What is the Paris Agreement Crediting Mechanism? Return to article undo
16. Guidance Document for Host countries concerning the issuance of CORSIA Eligible Emissions Units. Return to article undo