The first mandatory global aviation emissions scheme, CORSIA, is facing a critical shortage of eligible carbon credits as its compliance deadline approaches. Airlines under the scheme will need to offset up to 200 million metric tons of CO2, but available credits may cover only a quarter of that demand. This supply gap could drive up prices and lead to significant compliance costs, estimated between $3.6 billion and $9 billion for the industry. The bottleneck stems from strict eligibility rules and slow authorization processes in host countries. Many governments are hesitant to approve credits for international use, fearing they may need them to meet their own climate targets. Projects like cookstove initiatives in Africa are struggling to get approved, further tightening supply. As the first compliance period ends in January 2028, airlines face a 'litmus test' of whether the market can deliver real emissions reductions or just higher costs.
