Why airlines care about CORSIA-eligible supply now and how it differs from the wider VCM
Airlines care in 2026 because CORSIA’s First Phase (2024 to 2026) is already running, and compliance planning is no longer theoretical. Procurement teams are moving from policy interpretation to execution: building inventory, lining up delivery, and reducing the risk of being forced into last-minute buying when internal approvals and registry lead times collide with compliance deadlines.
Demand pressure is also clearer than in most voluntary carbon market buying cycles. IATA has estimated demand of 146 to 236 million CORSIA-Eligible Emissions Units (EEUs) for the First Phase (2024 to 2026). That scale changes behaviour. It pushes airlines toward compliance-style procurement, with forward planning, defined specifications, and tighter controls, rather than ad hoc spot purchases driven by communications claims.
CORSIA also narrows what “usable” means compared with the wider VCM. Under CORSIA, a unit must be eligible under ICAO rules, come from an ICAO-approved emissions unit programme, fall within eligible vintage windows, and be retired or cancelled in a way that meets CORSIA requirements. In the broader VCM, buyers often segment by claim type and quality signals that are not regulatory requirements, such as internal scoring, third-party ratings, or alignment to a particular corporate narrative.
The bottleneck in 2026 is increasingly about usability, not just perceived quality. A credit can look strong on additionality and monitoring and still fail a CORSIA use test if eligibility conditions are not met, if the vintage is outside the allowed window, or if registry processes and documentation do not support compliant cancellation. On top of that, more buyers are now asking for host-country authorizations linked to Article 6 concepts, such as Letters of Authorization and corresponding adjustments, to reduce perceived double counting and reputational risk, even where the strict legal requirement depends on the specific use case and claim.
The practical question for buyers is simple and commercial: how many CORSIA-eligible credits are actually deliverable on time, with the right tags, paperwork, and retirement pathway. “Eligible” supply on paper is not the same as supply that can be delivered into a buyer’s compliance workflow without exceptions. That is why an April auction matters as a stress test of product definition, eligibility, and underwriting.
Inside the April auction: project type, eligibility pathway, and what buyers will be underwriting
The auction format matters because it signals early buying and a more standardised procurement channel. Xpansiv’s CBL, in partnership with IATA, has been holding Phase I-eligible credit auctions since 2024. By 2026, the existence of repeated auctions is itself a market message: some airlines and intermediaries prefer to lock in supply earlier, reduce negotiation friction, and get a clearer view of where the market clears.
What buyers are purchasing in these auctions is not “a carbon credit” in the generic VCM sense. The product is typically a lot of credits tagged or labelled as CORSIA-eligible in the relevant registry context, sold as deliverable units with defined attributes. Depending on the auction design, lots can be project-specific, and the commercial decision becomes closer to underwriting a specific asset than buying an abstract benchmark.
A buyer’s eligibility pathway is usually a sequence of checks, and each step can fail even if the project looks credible. First, the emissions unit programme must be approved by ICAO for the First Phase. Second, the unit’s vintage must fall within the eligible vintage window. Third, any conditions or exclusions attached to that programme’s approval must be satisfied. Fourth, the buyer must be confident that cancellation or retirement can be executed in a way that is compatible with CORSIA requirements and the buyer’s compliance documentation needs.
Pricing in an auction is therefore pricing risk, not just tonnes. Reversal and invalidation risk tends to be priced more heavily for nature-based credits, but non-nature project types can still carry delivery and eligibility risk. Buyers will also price the risk of additionality challenges, the risk that host-country authorization becomes a practical requirement for internal policy or external scrutiny, and the risk that issuance or registry processing does not match the delivery window. Even when the unit is already issued, operational details like serial ranges, tagging status, and registry account readiness can affect whether “delivery” is truly straightforward.
Once you understand what is being underwritten, the next question becomes market-wide: what does an auction clearing price tell us about benchmarks for CORSIA vintages in 2026.
Price discovery and market signals: how auctions can reset benchmarks for CORSIA vintages
Auctions matter because they concentrate real compliance-grade demand into a single clearing event. That reduces the reliance on bilateral price talk, which can be hard to defend internally when procurement decisions are reviewed by risk, audit, or compliance teams. A cleared auction price is not perfect transparency, but it is usually easier to justify than a broker quote that cannot be independently validated.
Auctions also sit alongside forward market signals. OPIS has discussed ICE CORSIA Eligible Emissions Units futures (Phase 1, often referred to as CP1) as a reference point for forward expectations and risk premia. That matters because airlines do not only care about today’s spot price. They care about the forward curve, the cost of delaying procurement, and the premium they might pay for certainty.
A useful anchor from OPIS is that the Dec 2025 ICE CORSIA EEU was indicated around a $13 to $15 per tonne bid-offer range at the time of that report. An auction in 2026 can clear above or below such reference levels depending on what is actually being sold: project-specific attributes, vintage desirability, delivery timing, and contract protections.
Procurement teams should expect price segmentation to become more explicit. “CORSIA-eligible generic” units tend to trade closer to benchmark references, while project-specific lots can carry a premium or discount based on perceived integrity, documentation completeness, and operational ease of use. Premiums can also emerge for vintages that buyers prefer for internal policy reasons, for lots that come with clearer host-country authorization documentation, and for contracts that include replacement provisions or make-whole protections if units are later challenged or become unusable.
If auctions help discover price, they also force a harder conversation: what integrity checks must support that price for CORSIA use, and how that differs from standard VCM due diligence.
Integrity and due diligence checklist for CORSIA use: additionality, monitoring, and host-country risks
The first integrity check for CORSIA is eligibility, not quality scoring. Buyers should start with the ICAO list of CORSIA Eligible Emissions Units and confirm the programme approval status, any conditions, and the eligible vintage window. If a unit is not eligible under ICAO rules, it is not compliance-grade for CORSIA even if it would be considered high quality in voluntary markets.
Additionality and baseline risk still matter because they drive both reputational exposure and the risk of future challenges. Buyers should ask for evidence supporting baseline selection, financial or investment barriers, common practice arguments, and leakage assessment where relevant. Red flags include retroactive baseline changes that increase crediting without a clear methodological justification, signs of systematic over-crediting, and heavy dependence on variables outside project control without conservative safeguards.
Monitoring and verification should be treated as an operational control system, not a box-tick. Buyers should review the MRV approach, data quality controls, verification frequency, and the audit trail that links field data to issued units. For projects with reversal exposure, buyers should examine permanence provisions such as buffer pools and the governance rules that determine how reversals are quantified and compensated. Governance checks should also cover who holds the rights to the emission reductions, whether there are disputes, and whether community consent and benefit arrangements are documented in a way that reduces future contestation risk.
Host-country and Article 6-related risk is becoming a commercial requirement in 2026 procurement even when legal interpretations vary by context. Many buyers now want a Letter of Authorization and clarity on whether a corresponding adjustment applies, because the reputational cost of perceived double counting can exceed the cost of the credit itself. The practical response is contractual: conditions precedent, representations and warranties on authorization status, and remedies if authorization is withdrawn or found to be incomplete.
Once buyers apply this checklist, the operational question shifts to the supply side: how developers and brokers can structure CORSIA supply so that “eligible” becomes “deliverable” with minimal friction.
Implications for developers and brokers: structuring future CORSIA supply and managing delivery risk
Product design should start with registry readiness. Developers and brokers can reduce auction discounts by offering CORSIA-ready lots with clear eligibility tags or labels where supported, a documentation pack that includes programme and vintage evidence, serial ranges, and a clean chain of custody. Base Carbon has highlighted the market direction by announcing CORSIA-eligible tagged credits and sales, which reflects growing buyer preference for units that are easier to operationalise.
Contracting needs to look more like compliance procurement than marketing offset sales. Buyers will increasingly expect replacement and make-whole clauses, clear delivery windows, remedies for registry delays, and provisions that allocate invalidation or reversal risk. If a unit becomes unusable for CORSIA, buyers will want a defined path to substitute with other CORSIA-eligible units rather than renegotiate under time pressure.
Timing is a real risk variable in the First Phase. The phase covers 2024 to 2026, but procurement decisions and cancellations tend to cluster around internal reporting cycles and approaching compliance windows. Developers should plan issuance schedules to avoid an issuance cliff that overwhelms registry processing capacity, and they should build realistic lead times for tagging, transfers, and cancellation steps.
Distribution strategy should balance auctions and bilaterals. Auctions and electronic venues can support price discovery and broaden buyer access, while longer-term offtakes can de-risk cashflows and reduce exposure to volatile clearing prices. Structured offtakes with floors, ceilings, or collars can align developer financing needs with airline procurement risk management, provided the underlying eligibility and delivery terms are tight.
All of this remains sensitive to rule changes. Developers and brokers need a 2026 to 2027 radar for ICAO updates, registry rule changes, and eligibility list revisions that can shift demand and price premia quickly.
What to watch next: ICAO rule updates, registry changes, and how demand could shift by phase and region
ICAO’s Technical Advisory Body re-assessment cycle is a direct source of eligibility risk. ICAO has processes to reassess programmes for future periods, including the 2027 to 2029 window, and outcomes can change which programmes, conditions, and vintages remain eligible. That creates stranding risk for supply that is financeable today but not eligible tomorrow.
State participation and route coverage can also move effective demand. ICAO’s framework includes annual deadlines for states to notify participation decisions, which can change the scope of routes covered and therefore the volume of offsets required. Buyers should treat participation changes as a demand sensitivity, not a footnote, because it can tighten or loosen the market for specific vintages and preferred project types.
Registry and market infrastructure is evolving toward more explicit tagging and more marketplace-based trading. As tagging becomes more common and venues mature, fungibility can improve, but buyers should watch for changes in cancellation rules, labelling practices, and how updated lists of eligible emissions units are published and interpreted in practice.
The supply-demand balance remains the core market question. IATA’s 146 to 236 million EEU demand estimate for 2024 to 2026 needs to be compared not just with “eligible” supply, but with deliverable supply that clears eligibility, documentation, and internal buyer policy hurdles. If deliverable supply is constrained by authorization requirements, registry bottlenecks, or integrity screens, the market can shift from buyer-led to seller-led faster than many procurement teams expect.
For buyers and investors, the practical implication is scenario planning. The Second Phase starts in 2027, and tighter eligibility, higher documentation expectations, or shifts in participation can all change the premium for credits with clear authorization and low delivery risk. Portfolios built with a mix of spot, forward procurement, and longer-term offtakes will generally be easier to defend than portfolios that rely on last-minute spot liquidity, especially if auctions continue to reveal where the market truly clears.
