Airlines under CORSIA face significant and uncertain carbon credit costs as international aviation recovers, with demand projected to exceed supply to 2027, driven by growth in international aviation sector and a shortage of eligible projects.

Market participants are questioning the eligibility of Zimbabwe-tagged carbon credits for CORSIA Phase 1, as the Zimbabwean registry, unlike others, lacks ICAO approval despite transferring and tagging credits as eligible.

Eligible credits for Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Phase 1 remain in tight supply, leaving many buyers and sellers at an impasse.

The latest updates (Mar25) in the global carbon markets highlight significant strides in nature-based and innovative carbon removal projects. From Koko securing MIGA insurance in a potential boon to future CORSIA supply, Arup's £1 million investment in UK rewilding efforts to Airbus testing sustainable aviation fuel demand.

Read Fastmarkets' carbon market coverage on why US President Trump's executive order to exit the Paris Agreement has sparked uncertainty over CORSIA credit supply and demand.