The 200-Million-Tonne Deficit: Why Airlines are Front-Running CORSIA Phase 1
Aeroplane operators are no longer voluntary buyers.
For the past decade, aviation offsetting was an optional checkbox at checkout—a public relations gesture that passengers largely ignored and airlines underfunded.
That cozy era ended in early 2026, when international airline operators received their first official state notifications of their 2024 offsetting requirements under CORSIA Phase 1.
Suddenly, carbon is a mandatory operating expense for every international airline on the planet.
As state enforcement begins to bite, aircraft operators are discovering that the supply of eligible credits is dangerously thin, rewriting the economics of airline procurement.
Inside the Logistics of the Aviation Carbon Squeeze
CORSIA—the Carbon Offsetting and Reduction Scheme for International Aviation—is the first global, market-based compliance program to regulate an entire industrial sector.
The rules of Phase 1, which runs from 2024 through 2026, are unforgiving:
It targets the growth: Airlines must offset any international aviation emissions that exceed 85% of their 2019 baseline levels.
It is rapidly expanding: The program currently regulates operators across 130 participating countries, with mandatory participation for all nations starting in 2027.
It creates massive liabilities: According to Abatable's latest market projections, total compliance demand is projected to reach between 200 million and 220 million tonnes of carbon credits.
To put that in perspective, this single sector's compliance mandate is larger than the entire global voluntary carbon market's annual transactions.
Yet, the supply of authorized credits is facing a severe bottleneck.
The Supply Deficit: Why Tagged Credits Can't Keep Pace
The International Civil Aviation Organization (ICAO) has approved only a highly restricted set of registries and credit types for the 2024–2026 period.
And the actual delivery of these credits is struggling to keep pace with demand.
As of late April 2026, only about 37 million credits have been officially tagged as CORSIA-eligible.
While this represents a recent jump—bolstered by CORSIA market tracking data which tracked a 15-million-tonne wave of new issuances, including 9 million tonnes from a single jurisdictional REDD+ project in Guyana—the structural math is brutal.
The market is facing a massive, non-discretionary deficit.
If every airline attempts to source their credits on the spot market simultaneously at the end of the compliance period, the resulting price spike will devastate operating margins.
This is already driving a dramatic quality-based pricing spread, with highly-rated credits commanding massive premiums while unaligned, lower-integrity legacy offsets sit abandoned in oversupplied registries.
Moving From Spot Purchasing to Strategic Long-Term Offtakes
Because of this supply mismatch, airlines are rapidly abandoning short-term spot transactions.
They are shifting to long-term procurement strategies and long-term procurement structures to secure physical volume early.
Instead of purchasing credits post-emission, operators are executing forward offtake agreements directly with project developers.
They are financing projects today to guarantee delivery of CORSIA-Eligible Emissions Units (EEUs) over the next five to ten years.
By locking in these forward contracts, airlines achieve three critical strategic goals:
Price certainty: Insulating their balance sheets from top-of-market pricing when compliance deadlines hit.
Volume security: Guaranteeing actual physical delivery of certified, adjusted credits in a structurally short market.
Risk mitigation: Minimizing host-country policy risks by aligning with established bilateral JCM and Article 6 frameworks early.
Managing Carbon Like Fuel Hedging
If you are an airline executive, or a corporate buyer with significant supply-chain logistics exposure, the CORSIA squeeze is a warning.
The boundary between voluntary and compliance markets has dissolved.
Treating carbon as a transactional commodity is an operational hazard.
To protect your business from future compliance defaults and margin compression, your team must:
Audit your scope-travel liabilities: Calculate your projected compliance exposure over the next three years using conservative baseline scenarios.
Pivot immediately from spot to forward contracts: Stop waiting for the spot market to deliver. Secure your CORSIA-eligible credits through structured forward offtakes with project developers today.
Hedge sovereign policy risk: Diversify your forward portfolio across multiple approved host countries and registries to insulate against authorization delays.
The winners in this regulated era will not be those who find the cheapest offsets. They will be the ones that treat carbon with the same rigorous financial discipline as fuel hedging, securing their physical supply long before the compliance gates lock shut.
