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Delivering a presentation during a panel discussion at the International Emissions Trading Association’s (IETA) Asia Climate Summit in Hong Kong on Thursday July 9, Ochiai said the airline continues to view SAF as aviation’s primary long-term decarbonization solution, but expects carbon credits to play a greater role in the near term because of supply limitations as it prepares for compliance under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
“We are expecting [to use] carbon credits more in the near future,” Ochiai said, adding that SAF supply will remain limited while costs continue to rise.
Japan Airlines has already begun purchasing and retiring carbon credits toward meeting its first CORSIA compliance obligation, covering emissions from 2024-2026 and due for surrender in January 2028.
Ochiai said the airline continues to assess the balance between SAF use and carbon credits, with future offset requirements depending both on SAF uptake and carbon credits.
Presentation materials shown during the session identified “supply and price” as the airline’s primary concerns under CORSIA, with offset requirements expected to depend on the balance between SAF deployment and the use of CORSIA Phase 1 emission units.
He said one of the airline’s biggest challenges has been learning how the carbon markets operate, from registry systems and retirement processes to assessing project quality and pricing.
“We don’t have any sense to identify whether this is quality and what the price is,” Ochiai said, adding that greater price and market transparency would help all airlines better understand carbon-credit procurement.
Kelvin Lee, International Air Transport Association’s (IATA) head of sustainability for Asia-Pacific, said Japan Airlines was a “model student” for CORSIA preparedness, but said airlines across the region remain at varying stages of readiness.
He said many carriers first need to understand how much they will be required to buy before developing procurement strategies, noting that CORSIA obligations are based on industry wide emissions growth rather than an individual airline’s growth. Many airlines are also still learning how carbon markets operate because procuring carbon credits is fundamentally different from purchasing jet fuel and requires new internal approval processes and procurement capabilities.
While project developers continue to receive significant interest from airlines, actual transactions remain limited, however, and Hoang Anh Dung, founder and chief executive of INTRACO Carbon, said that his company had received hundreds of inquiries from airlines in Asia and elsewhere, but none had yet translated into purchases.
“I can see a lot of demand. But if you say about buying, actually very, very little,” Dung said.
Dung added that traders were seeking to buy credits at below $10 per tonne, which he said was below his company’s breakeven level. He also pointed to the gap between roughly 37 million tonnes of currently eligible supply and expected Phase 1 compliance demand for around 200 million tonnes.
He urged Verra to shorten review timelines for second and subsequent issuances from existing projects, arguing that projects should not undergo the same lengthy review process after their initial approval.
Zachary Kane, senior vice president at carbon insurance provider Oka, said his company had reviewed more than 100 Letters of Authorisation (LoAs) across multiple countries and insured more than 10 million tonnes of carbon dioxide equivalent (tCO2e) CORSIA credits, but warned that Article 6 implementation remained one of the principal constraints on expanding supplies.
While LoAs are often viewed as the key milestone, Kane said governments must also complete national greenhouse gas inventories, submit Biennial Transparency Reports (BTRs) and implement corresponding adjustments before credits can fully enter the compliance market.
Panel moderator Aaron Tam, director of market data at Sylvera, said the market continued to face a “chicken-and-egg” problem, with uncertainty surrounding both airline procurement and the pace at which authorised supply would reach the market.
Tam said roughly 500,000 tonnes had so far been retired against estimated Phase 1 compliance demand of around 180-200 million tonnes, while currently authorised supply remained well below projected compliance demand – although final demand would depend on future traffic growth and regulatory developments.
Tam said expected demand could fall to 150-170 million tonnes after excluding intra-European Economic Area flights and smaller participating states, although he added that uncertainty remains over how procurement would evolve before the January 2028 deadline.
The discussion underscored the gap between long-term compliance demand and near-term procurement, with airlines continuing to develop purchasing strategies, developers waiting for buying activity to accelerate and governments working to implement the Article 6 frameworks needed to expand eligible supplies.
The demand and supply gap has a price. Fastmarkets tracks it through independent CORSIA assessments built for compliance decisions