CORSIA Phase 1 (CP1) spot prices extended their losses this week as newly tagged supply from Verra-registered cookstove and water filtration projects entered the market, reinforcing a broader repricing that has gathered pace since late January.

Prices for Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Phase 1 (CP1) spot credits continued to drop on Wednesday January 28, with all eyes remaining firmly on supply.

The aviation sector faces rising decarbonization challenges as volatile SAF costs, complex regulations, and procurement risks demand strategic, data-driven solutions.

CORSIA Phase 1 carbon credit prices are weakening as expanding eligible supply collides with still-uncertain mandatory demand from airlines. Recent actions by the International Civil Aviation Organisation (ICAO), aimed at improving market liquidity, have so far outweighed the first structural signals of compliance-driven demand.

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.