CORSIA's First Phase runs from 2024 to 2026, with airlines required to retire eligible credits by January 2028. With 130 states now participating in the scheme and demand for Eligible Emissions Units projected to reach up to 236 million units across the First Phase, according to IATA, the market is moving from planning to active procurement.
CORSIA carbon credit prices could rise before the First Phase ends due to a combination of tightening supply and increasing demand. While overall credit issuance has increased, the pool of truly eligible credits remains constrained by delays in corresponding adjustments and limited insurance capacity, just as compliance pressure on airlines continues to build.
Understanding what is driving supply constraints, how new mechanisms are shaping availability, and what enforcement looks like across different jurisdictions is becoming central to how airlines and market participants navigate the remainder of the First Phase.
Where supply stands today
Since the First Phase began, the number of approved registries has grown, more projects have been issued credits, and the market is considerably more active than it was two years ago.
But headline supply figures can be misleading. The latest CORSIA Market Forecast report from AlliedOffsets and Artio finds that while overall EEU issuances have increased substantially, real availability is more constrained than the numbers suggest, shaped by two key factors: whether host countries have issued corresponding adjustments, and whether credits can be unlocked through insurance.
The difference between issued and eligible
Not every credit that has been issued can be used for CORSIA compliance. One of the most discussed challenges in the First Phase has been the delay in the issuance of letters of authorization (LoA) and the performance of the ensuing corresponding adjustments.
A corresponding adjustment is a mechanism under the Paris Agreement that prevents the same ton of CO2 from being counted twice, once toward a country's national climate target and once toward an airline's CORSIA obligation. Host countries are not required to issue these adjustments, which is optional for them, creating a scarcity dynamic in the market.
This means the pool of credits that are both issued and genuinely eligible for compliance is smaller than total issuance figures imply.
How insurance is changing the picture and where it falls short
Insurance has emerged as a meaningful mechanism to unlock CORSIA supply. Insurance on letters of authorization allows credits to become eligible ahead of formal corresponding adjustments being completed by host countries, closing the gap between issuance and eligibility faster than the traditional authorization route.
According to AlliedOffsets and Artio CORSIA Market Forecast report, this has already had a measurable impact on supply, with a significant proportion of current EEUs made eligible through insurance rather than direct host country authorization.
However, the report also makes clear that current insurance capacity is not sufficient to meet projected First Phase demand on its own. The growth of insurance solutions is a positive development for the market, but supply remains constrained heading into the second half of the First Phase.
What enforcement means for airlines
The compliance pressure on airlines is building, not just from supply dynamics but from an expanding set of national enforcement frameworks. Only a small number of jurisdictions have implemented per-ton penalty fees to date.
Countries such as the UK, at £100 per ton of CO2, and Brazil have outlined penalty structures, and France's administrative fine of €100 per ton for aircraft operators that have not met their compensation obligations entered into force in April 2025. The EU, Switzerland, Canada, Japan, Singapore, South Korea, and New Zealand have all published updated CORSIA regulations on monitoring, reporting, and offsetting requirements.
For airlines operating across these jurisdictions, the cost of non-compliance is no longer theoretical.
For a deeper breakdown of supply constraints, insurance dynamics, and demand projections, explore the full AlliedOffsets and Artio CORSIA Market Forecast report here.