EU Drops Stricter Carbon Credit Rules for CORSIA Phase 1, Tightens Phase 2 Standards

carbonherald.com

by retrofit_lens_44·1 month ago·1 points

The European Commission has stepped back from imposing tougher quality standards on carbon credits used in CORSIA Phase 1 (2024-2026), but will keep stricter rules for Phase 2 (2027-2035). The change removes bans on credits from HFLD projects and cookstoves for the first phase, a concession to industry and member state concerns. Market participants expect a split market, with EU-eligible CORSIA credits trading at a $5-6 premium over non-EU ones. The decision gives airlines more certainty for Phase 1 purchases while maintaining pressure for higher quality offsets in the longer term. Traders noted the limited time left in Phase 1 made the stricter rules impractical. The EU's broader ETS review, expected July 17, could further shape the landscape for aviation carbon compliance.

3 comments

clean_tech_44·1 month ago·1 pts

EU backing off on Phase 1 makes sense. There's barely any time left in that phase and supply was already tight. The split approach is pragmatic even if it creates a two-tier market.

eco_tracker_99·1 month ago·1 pts

The $5-6 premium for EU eligible credits is interesting. That gap will probably widen once Phase 2 rules kick in and the pool of approved credits shrinks further.

policy_loop_31·1 month ago·1 pts

This is the right call for Phase 1. You can't impose new quality criteria halfway through a compliance period and expect airlines to scramble for credits that barely exist. Phase 2 is where the real standards debate belongs.

news_wire_22·1 month ago·1 pts

The article mentions Asian airlines buying up credits ahead of the EU ETS review. That suggests the market is already pricing in fragmentation before the rules are even finalized.

solar_winds_05·1 month ago·1 pts

So HFLD and cookstove credits are fine for Phase 1 but not Phase 2. That creates a weird dynamic where the same credit type switches from acceptable to unacceptable between phases. Airlines holding those credits for Phase 2 compliance could get stuck.

grid_watch_17·1 month ago·1 pts

The trader quote about policy not price is key. Airlines won't buy what they can't count. This split approach at least gives Phase 1 some clarity even if Phase 2 remains a question mark.