CORSIA CARBON MARKET
ARTICLE 6 & CORSIA, UNDERSTANDING THE OPPORTUNITY
What is CORSIA?
CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation, is the world's first global, sector-wide market-based measure for emissions reduction. Established by the International Civil Aviation Organisation (ICAO), it requires international airlines to offset emissions that exceed 2019 baseline levels.
CORSIA is moving from its voluntary pilot phases toward mandatory participation, with binding compliance obligations taking effect from 2027. This is not a voluntary initiative, it is a regulatory requirement for international aviation.
What is Article 6?
Article 6 of the Paris Agreement establishes the framework through which countries can cooperate on emissions reductions, including the transfer of carbon credits between countries with "corresponding adjustments" to avoid double-counting.
Credits that meet Article 6 corresponding adjustment requirements represent the highest standard of integrity currently available in carbon markets, and are central to CORSIA eligibility, particularly as standards continue to tighten.
The Current Market Picture
Recent EU discussions on stricter CORSIA eligibility requirements have led some to question the compliance carbon market. The reality is more nuanced, and for well-positioned suppliers, more favourable.
This is a supply eligibility issue, not a demand issue. Aviation's offset obligations remain in place, what's changing is which credits qualify, with the market shifting toward higher-integrity, sovereign-backed, Article 6-aligned supply.
IATA and MSCI estimate cumulative Phase 1 (2024–2026) demand of 100–230 million credits, against approved supply that remains a fraction of this. As standards tighten, this gap is expected to widen for all but the highest-integrity projects.
For Airlines:
Securing supply from sovereign-backed, Article 6-aligned projects now provides confidence that your compliance credits will remain eligible as standards evolve, reducing the risk of holding credits that may be excluded under tightening rules.
For Governments:
Jurisdictions that establish credible Article 6 frameworks early are positioned to become trusted, long-term suppliers into a market that is consolidating around exactly this type of supply.
For Investors:
For Investors: As the market shifts toward institutional, compliance-driven demand, high-integrity Article 6-aligned supply is expected to gain strategic value. Investors who gain exposure ahead of the broader market stand to benefit as pricing adjusts to reflect genuine scarcity.