The Climate Action Reserve (CAR) published criteria on Friday for insuring carbon credits issued under its voluntary standard for use under CORSIA, the UN aviation offsetting scheme, as reported by Carbon Pulse. The move matters because CORSIA’s first phase is running on a thin supply of eligible units, and eligibility now has two distinct routes: a host-country corresponding adjustment, or an insurance backstop against double claiming. Both routes produced news in the same week, with Rwanda authorizing 1.77 million tonnes from a cookstove project for potential CORSIA use. For airlines, traders and project developers, the supply architecture of the aviation carbon market is being assembled in real time.
Why CORSIA Has a Supply Problem
CORSIA, administered by the International Civil Aviation Organization (ICAO), requires airlines to offset the growth in international aviation emissions above a baseline. The scheme’s first phase runs from 2024 to 2026 for volunteering states; from 2027, offsetting applies to most international flights through 2035, with exemptions for least developed countries, small island states and states below 0.5 percent of international revenue tonne kilometres.
Demand estimates far outstrip ready supply. IATA has estimated that airlines could require more than 200 million eligible units during the first phase, while only about 38 to 40 million units have been tagged for that phase so far. The bottleneck is not credit issuance in general but CORSIA eligibility: units must come from ICAO-approved programmes and satisfy safeguards against double claiming, the risk that both the airline and the host country count the same reduction.
Two Routes to an Eligible Credit
The first route is the corresponding adjustment. The host country authorizes the transfer under Article 6 of the Paris Agreement and adds the transferred reductions back to its own emissions accounting, so only the buyer can claim them. This is the cleanest form of eligibility, but it depends on governments building authorization processes and accepting the accounting cost, and many have moved slowly.
The second route is insurance. Where no corresponding adjustment is in place, an approved insurance policy can cover the double-claiming risk, compensating the market if a host country later counts the reductions toward its own target. CAR’s new criteria bring it into line with the two largest voluntary standards, which established this model in July 2025. Verra’s criteria allow units from 2021 onward to qualify with an Article 6 label plus either a corresponding adjustment or a Verra-approved insurance product, and it engaged broker Howden to assess eligible policies. Gold Standard launched a parallel process requiring policies to deliver replacement units or a cash payout, to remain in force until the host country publishes its Biennial Transparency Report, and to involve a third-party administrator.
CAR’s framework, applied to its Climate Reserve Tonnes, completes the pattern: all three major ICAO-approved voluntary standards now have, or are building, an insurance pathway. The practical effect is to widen the pool of credits that can reach airlines without waiting for every host government to finalize Article 6 accounting.
Rwanda Shows the Adjustment Route Is Moving
The corresponding adjustment route advanced too. The Rwanda Environment Management Authority (REMA) issued a Letter of Authorization on 28 July 2026 for up to 1.77 million tonnes of CO2e from the Rwandan Improved Cookstove Project, developed with project partner Likano and registered under Verra’s Verified Carbon Standard as Project 2984, as reported by African Sustainability Matters. Rwanda will apply a corresponding adjustment, reflected in its Biennial Transparency Report under Article 13 of the Paris Agreement.
Two caveats matter for buyers. Authorization is not delivery: the units must still satisfy CORSIA’s remaining eligibility conditions before airlines can use them. And cookstove credits carry integrity scrutiny, since their climate value depends on real fuel savings being measured against credible baselines. Rwanda’s national oversight, with the government retaining control over which outcomes can be transferred, is part of the answer to that scrutiny.
Supply Is Being Built in a Weak Market
The eligibility build-out is landing in a soft voluntary market. Canadian carbon financier Base Carbon, involved in the Rwanda cookstove project, more than doubled its net loss quarter over quarter in Q2 2026 as credit prices kept falling, reporting a $0.02 loss per share alongside a share buyback and the news that its Rwanda credits had moved toward CORSIA eligibility. Broader market commentary describes voluntary trading as seasonally slow with CORSIA prices stable.
That combination is worth noting: financiers are absorbing near-term losses while positioning inventory for the compliance-grade demand CORSIA is expected to generate. Eligibility, not volume, is becoming the dividing line between credits that trade at distressed voluntary prices and credits airlines can actually use.
What It Means for Buyers and Developers
For airlines and their intermediaries, the insurance criteria expand the addressable supply pool ahead of the mandatory phase starting in 2027, when demand steps up structurally. Procurement teams should expect a growing price premium for tagged, eligible units over untagged inventory, and should verify which route, adjustment or insurance, stands behind any credit offered as CORSIA-eligible.
For project developers, the signal is that host-country engagement and eligibility planning now drive value as much as issuance volume. Rwanda’s authorization shows African governments building Article 6 processes that make their credits exportable at compliance grade. For investors, the Base Carbon results show the financing strain of carrying inventory through the current price trough, and the strategic bet that eligibility converts that inventory into premium supply.
What to Watch
Three markers will show how fast the supply gap closes. First, whether insurers actually bring products to market under the Verra, Gold Standard and now CAR criteria, and at what premium. Second, the pace of host-country Letters of Authorization following Rwanda’s, particularly from other African states building Article 6 frameworks. Third, ICAO decisions on eligible supply for the 2027 to 2035 mandatory phase, which will determine whether today’s tagged 38 to 40 million units are the base of a functioning market or the peak of a shortage.
