The International Air Transport Association (IATA) has announced that airlines are set to invest...
Corsia Could Drive Demand for 150M Carbon Credits, ICAO Reports

Airlines worldwide could be required to purchase as many as 150 million carbon credits between 2024 and 2026 to comply with international environmental regulations, according to the International Civil Aviation Organization (ICAO). This marks the first compliance phase of CORSIA, the UN-led Carbon Offsetting and Reduction Scheme for International Aviation.
An endless expanse of green forest with an airplane gliding across the blue sky. AI generated picture.
In its newly released report, ICAO forecasts that carbon offsets will take the lead over alternative fuels due to cost and supply limitations. Sustainable Aviation Fuels (SAF) and other low-carbon alternatives—known as CORSIA Eligible Fuels (CEF)—are currently in short supply and come with much higher price tags than offsets.
‘Demand from CORSIA…is likely to exceed the supply of SAF/CEF, making it a supply-constrained market,’ stated ICAO’s Committee on Aviation Environmental Protection. The report adds, ‘the use/allocation of limited emissions reductions from SAF/CEF… will likely be driven by the costs of alternatives - e.g., emissions units under CORSIA and carbon permits under the EU ETS.’
With SAF estimated to cost between $600 and $800 per tonne of CO₂ equivalent (tCO₂e), airlines may turn to more affordable carbon credits, which currently range from $5.70 to $17.20/tCO₂e. Based on these figures, airlines could face total compliance costs of anywhere between $1.3 billion and $8.4 billion, depending on their chosen strategy.
‘These costs could represent 2% to 13% of airlines' net profits from 2024 to 2026 [estimated at $64 billion],’ ICAO noted in its assessment.
Looking further ahead, ICAO modelled long-term projections through 2035. In the highest-demand scenario—where air travel remains strong and SAF adoption remains low—carbon credit demand could reach up to 1.5 billion tCO₂e. This would reflect a target of reducing 85% of 2022 emissions.
However, the agency warns that the current offset market is still maturing. ‘The market for CORSIA‐eligible units remains at a nascent stage,’ it noted. At present, only sovereign REDD+ credits issued by Guyana under the Architecture for REDD+ Transactions (ART) standard qualify under the programme.
To strengthen future supply, market watchers point to credits with added backing—such as World Bank guarantees or host-country Letters of Authorisation—as potential game changers.
