ICAO Tightens Carbon Offset Criteria for CORSIA

The International Civil Aviation Organization (ICAO) has announced updated eligibility criteria for carbon offset registries under its CORSIA program, covering 2021-2026. Newly approved registries, including Verra, Gold Standard (GS), Climate Action Reserve (CAR), and Global Carbon Council (GCC), join ACR and the Architecture for REDD+ Transactions, which were approved earlier this year.

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Released in a comprehensive 47-page document, the new guidelines clarify which projects qualify under CORSIA, addressing the market uncertainty that had previously stalled carbon offset transactions. As CORSIA drives significant demand for offsets, the updated rules focus on stricter validation processes and exclusions to ensure compliance with global standards.

Excluded Projects and Methodologies
The revised criteria exclude certain project types from CORSIA’s first phase, including most large renewable energy projects and nature-based solutions in non-REDD countries. Specific exclusions include:

• CAR: All nature-based projects in non-REDD countries except under the Mexico Forest Protocol.
• GCC: Nuclear energy, HFC-23 abatement, and afforestation projects.
• GS: Limited nature-based projects outside non-REDD countries.
• Verra: Restrictions on cookstove projects and specific REDD+ methodologies.

The document also emphasises the importance of robust insurance policies to mitigate risks, requiring independent coverage separate from project proponents and host countries.

Market Implications
The new guidelines have raised concerns among market participants. Verra indicated that some projects may require methodology adjustments, while GS highlighted potential barriers to market access. Analysts estimate millions of carbon credits could lose eligibility without updates to existing frameworks.

Looking ahead, ICAO plans to review criteria for CORSIA’s second phase, spanning 2027-2029. For now, the first phase prioritises credibility and alignment with global climate goals, setting the stage for future carbon offset market developments.