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The European Commission has proposed removing additional quality requirements for carbon credits used by European airlines under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), while acknowledging that the revised approach would allow European Economic Area (EEA) aircraft operators to use carbon credits it considers to have lower environmental integrity.
The proposal was outlined in minutes of a June 15 meeting of the Climate Change Committee, seen by Fastmarkets.
The Commission presented a revised draft implementing regulation removing proposed additional quality criteria that would have applied to credits used by EEA aircraft operators during CORSIA’s first compliance phase, covering emissions from 2024-26. The Commission said the revised approach reflected feedback from Member States and industry, describing it as “a constructive gesture of goodwill” aimed at securing “a positive vote on the draft act in the autumn.”
The original proposal had included additional quality criteria for two categories of CORSIA-eligible credits: High Forest-Low Deforestation (HFLD) projects and cookstove projects reducing the use of non-renewable biomass.
The revised proposal removes both sets of additional criteria for Phase 1, meaning no EU-specific quality requirements would apply beyond those already established under ICAO’s existing CORSIA eligibility framework.
The revised proposal means EEA aircraft operators would continue to access the same pool of ICAO-approved CORSIA Eligible Emissions Units available to airlines participating in the scheme elsewhere, avoiding separate EU-specific quality requirements during the first compliance phase.
The Commission said the changes reflected feedback from Member States and industry and were intended to secure support for the implementing act ahead of a vote expected in the autumn.
The Commission made clear that removing the additional criteria does not represent a change in its assessment of credit quality.
In presenting the revised proposal, officials reiterated warnings about “important overcrediting and permanence issues” affecting parts of the current CORSIA credit supply, citing peer-reviewed scientific literature, and acknowledged directly that the revised approach would mean EEA aircraft operators purchasing what the Commission described as “low environmental integrity” credits during Phase 1.
Officials described the revised approach as “a confirmation of the EU’s support of CORSIA” that would give the scheme “another opportunity for strengthening its credit integrity” in future phases.
HFLD and cookstove projects represent a significant proportion of currently tagged CORSIA Phase 1 supply. The Commission’s own supply impact assessment from earlier in the year estimated that just 10% of currently available supply would be eligible for EEA operators under the initial concept note.
Under the revised proposal, neither category would face additional EU-specific restrictions during Phase 1.
The proposal removes one source of regulatory uncertainty that market participants had cited as contributing to delayed procurement by some European carriers.
The announcement was also reflected in market pricing. Fastmarkets assessed CORSIA Phase 1 spot credits at $11.60 per tonne of CO2 equivalent (tCO2e) on Wednesday July 15, up from $9.70 per tCO2e a week earlier.
The Intercontinental Exchange (ICE) December 2026 CORSIA futures contract strengthened to around $11 per tCO2e, rising around 9% week on week, with some traders attributing part of the move to the Commission’s revised proposal, saying it reduced one source of regulatory uncertainty surrounding European compliance demand.
Developers also reported improved market sentiment following the proposal. One project developer said it had seen increased interest from intermediaries in recent days, while another market participant reported trader bids around $11.50 per tCO2e, above prevailing ICE futures levels, suggesting some participants expected prices to strengthen further.
Market participants have repeatedly told Fastmarkets that uncertainty over which credits would ultimately qualify for European compliance had contributed to delayed procurement, particularly from European airlines, even as CORSIA Phase 1 prices fell from above $20 per tCO2e late last year to a record low of $9.50 per tCO2e on June 24.
Whether the revised proposal translates into sustained airline buying remains to be seen. Airlines have until January 2028 to surrender Phase 1 credits, while other constraints, including the pace of host-country authorisations, the costs associated with corresponding adjustments and insurance, and broader Article 6 implementation, continue to weigh on procurement decisions. Industry estimates suggest airlines could require around 200 million eligible emissions units during Phase 1, while currently tagged supply remains well below that level.
The Commission stated it is targeting a vote in the autumn during the committee meeting.
The proposal covers Phase 1 only. The Commission’s description of the revised approach as providing “another opportunity for strengthening its credit integrity” suggests the debate over CORSIA credit quality is likely to continue before Phase 2, when EEA aircraft operators could again face additional eligibility requirements.
The original draft concept note also included additional proposed restrictions and criteria for Phase 2 eligibility, including additional requirements for host countries.
The demand and supply gap has a price. Fastmarkets tracks it through independent CORSIA assessments built for compliance decisions