Carbon Credits in the Aviation Sector
EU ETS, CORSIA and Compliance Strategies to 2026 and Beyond
A regulatory and operational guide for airlines, operators, consultants and investors in the context of the global climate transition.
Executive Summary
Why 2026 is a Critical Year for Aviation
EU ETS Phase-out
From 2026, free allowances for aviation are eliminated in the European ETS system. Airlines must buy their full emissions quota on the market.
CORSIA Phase 1
The first mandatory CORSIA compliance period (2024–2026) is underway. Eligible units are defined by ICAO and subject to stringent quality criteria.
Non-CO₂ MRV
Since 2025, the European framework for monitoring, reporting and verification of non-CO₂ effects has been active. The Commission will present a report by 2027.
Credit Quality
Not all carbon credits are eligible for aviation compliance. Additionality, permanence and independent verification are essential and non-negotiable requirements.

Key message: carbon credits do not replace direct decarbonisation, but they support compliance and the transition within a strict and rapidly evolving regulatory framework.
Slide 2 — Fundamentals
What Carbon Credits Are in Aviation
Definition
A carbon credit represents the reduction or removal of 1 tonne of CO₂ equivalent from the atmosphere. It can be generated by forestry projects, renewables, energy efficiency or direct carbon capture.
Use in Aviation
In the aviation sector, credits are used to offset emissions that cannot be eliminated through direct measures.
Compliance Mechanism
The operator calculates verified emissions, identifies any excess over the baseline, purchases and retires eligible units, and submits documentation to the competent authority.

The distinction between credits for compliance (CORSIA, EU ETS) and voluntary credits is essential: quality standards and regulatory obligations differ significantly.
Slide 3 — Context
Why Aviation Is Under Climate Pressure
Greater Climate Impact than CO₂
Aviation contributes to climate change not only through CO₂, but also via contrails, nitrogen oxides (NOx), particulate matter and water vapour, with an Effective Radiative Forcing estimated at 2–4 times higher than CO₂ alone.
Growth in Air Traffic
Global air traffic is expected to grow strongly over the coming decades. ICAO estimates a doubling of passengers by 2050, making the decarbonisation of the sector an essential regulatory priority.
Rising Regulatory Pressure
The EU has progressively tightened the EU ETS framework, removing free allowances from 2026. CORSIA introduces compensation obligations at global level. Airlines must build an integrated compliance strategy.
2–4x
Radiative forcing
Total climate effect of aviation compared with CO₂ alone
2%
Global CO₂
Share of the aviation sector in global fossil-fuel CO₂ emissions
2050
ICAO net zero
ICAO's net zero carbon target for international aviation
Slide 4 — Global Framework
CORSIA: ICAO’s Global Framework for Emissions Offsetting
Structure and Phases
  • Pilot Phase (2021–2023): voluntary participation, monitoring only
  • Phase 1 (2024–2026): offsetting obligations for all States that have joined
  • Phase 2 (2027–2035): universal application to all ICAO States (with exceptions)
Compliance Logic
Operators must offset emissions above the 2019–2020 baseline. The obligation applies to international routes between participating States, excluding domestic routes and those to/from non-participating countries.
Eligible Emissions Units (EEU)
The eligible units are defined by the ICAO Technical Advisory Body (TAB) according to strict criteria. For the 2024–2026 period, units from programmes such as Gold Standard, Verra VCS, ART TREES and others with updated requirements have been approved.
  • They must meet the CORSIA Eligible Emissions Units criteria
  • They must be retired by the required deadlines
  • They cannot be double-counted under other schemes
Slide 5 — European Framework
EU ETS Aviation: Phase-Out of Free Allowances and 2026 Review
1
2012–2023
EU ETS applied to aviation. Free allowances progressively reduced. Scope limited to the European Economic Area (EEA) for international routes.
2
2024–2025
Accelerated reduction of free allowances. Activation of non-CO₂ effects MRV. Start of the first mandatory CORSIA compliance period (Phase 1).
3
2026
Complete elimination of free allowances. Airlines must purchase 100% of EUAs on the market. The Commission conducts the CORSIA review and assesses a possible expansion of the ETS scope.
4
2027+
Possible extension of the EU ETS to extra-EEA international routes. Commission report on non-CO₂. Possible legislative proposal based on the monitoring results.

The complete phase-out of free allowances in 2026 represents a significant direct impact on the operating costs of airlines operating in the European Economic Area. Early planning of the procurement strategy is required.
Slide 6 — Comparison Table
CORSIA vs EU ETS vs Voluntary Market: Key Differences

An aircraft operator with intra-EEA and international flights is subject simultaneously to both the EU ETS and CORSIA. The two obligations are distinct and do not overlap.
Slide 7 — MRV and Non-CO₂ Effects
Monitoring, Reporting and Verification: The Aviation Non-CO₂ Effects
What Will Be Monitored from 2025
EU Regulation 2023/2405 (ReFuelEU Aviation) and the updated MRV provisions require the progressive monitoring of non-CO₂ effects from 2025 onwards. The European framework distinguishes between:
  • Contrails (condensation trails): a significant estimated warming effect
  • NOx (nitrogen oxides): formation of ozone at altitude with a warming effect
  • Fine particulate matter (soot): interaction with clouds and albedo
  • Water vapour: artificial cirrus and radiative forcing at high altitude
NEATS and Primary/Secondary Data
NEATS (Non-CO₂ Effects of Aviation Tool Set) is the methodological framework developed with EASA support to standardise the quantification of non-CO₂ effects. It provides for:
  • Use of primary data (from flight: fuel, route, altitude, temperature) where available
  • Use of secondary data (aggregated climate models) where primary data are unavailable
  • Progressive approach: the level of detail required will increase over time
Legislative Deadline
The European Commission is required to present a report by 2027 on the monitoring results and, if appropriate, a legislative proposal to integrate non-CO₂ effects into the regulatory regime.
Slide 8 — Credit Quality
The Quality Criteria for Carbon Credits: What Makes a Credit Eligible
Additionality
Emissions reduction must be additional to what would have happened without the project. Reductions that would have occurred anyway for economic, legislative or technological reasons are not eligible.
Permanence
The removal or reduction of CO₂ must be durable over time. For credits from forests or agricultural soils, the risk of reversal (fires, deforestation) must be managed through buffer pools and insurance mechanisms.
Measurability and Quantification
Emissions reductions must be robustly quantified using accredited methodologies, based on verifiable data and credible baseline scenarios, in line with IPCC guidance.
Independent Verification
Every credit must be validated and verified by an accredited third-party body according to the relevant standard (ICROA, ISAE 3000, etc.). Without independent verification, the credit is not recognisable for compliance.
No Double Counting
The same credit cannot be counted twice: neither by the same operator under different schemes, nor by different countries within the NDCs of the Paris Agreement. Corresponding adjustment rules are decisive in CORSIA.
Slide 9 — Risks and Critical Issues
Reputational, Regulatory and Market Risks in the Use of Credits
Reputational Risk
The use of low-quality or unverified credits exposes airlines to accusations of greenwashing, with significant repercussions for brand reputation, ESG communication and relations with institutional investors. Recent cases (Ryanair, Lufthansa, Delta) have shown the public and media’s sensitivity to this issue.
Regulatory Risk
European regulation on environmental claims (the Green Claims Directive) and updates to ICAO guidance increase the risk of non-compliance if the credits used do not meet the updated criteria. National authorities may challenge the validity of the retirement.
Supply and Liquidity Risk
The market for high-quality credits eligible for CORSIA is limited relative to potential demand. With the entry into mandatory Phase 1 and the phase-out of EU ETS, scarcity of eligible units and possible price volatility are expected.
Not all credits are eligible
  • Voluntary credits not approved by ICAO/TAB are not valid for CORSIA
  • Credits not from an EU registry are not valid for EU ETS
  • Credits without corresponding adjustment are not valid for post-Paris schemes

Buying credits without verifying their specific eligibility for the applicable compliance scheme is an operational and legal risk that cannot be ignored.
Slide 10 — Operational Strategy
Operational Strategy for Airlines: An Integrated Approach
Sustainable Aviation Fuels (SAF)
SAF is the principal instrument for the direct reduction of CO₂ emissions across the life cycle. The ReFuelEU Regulation (EU 2023/2405) sets rising mandatory quotas: 2% in 2025, 6% in 2030, 20% in 2035. SAF generates SAF credits recognised within the EU ETS framework and, in time, in CORSIA.
Operational Efficiency and Fleet Renewal
Route optimisation, weight reduction, improved ATC and fleet renewal with next-generation aircraft structurally reduce fuel consumption. Every percentage point reduction in burn rate translates directly into lower compliance obligations.
Procurement Strategy for Carbon Credits
Airlines must develop a structured procurement strategy: identification of units eligible for each scheme (CORSIA vs EU ETS), forward contracts to mitigate price volatility, counterparty audits and ongoing verification of cancellation registries. The timing of retirement is regulated and subject to annual deadlines.

The optimal strategy combines direct reduction (SAF + efficiency + fleet), internal carbon pricing and selective purchase of high-quality credits to cover the residual that cannot be reduced in the short term.
Slide 11 — Regulatory Timeline
Regulatory Timeline for Aviation Climate 2023–2027
2023
Approval of ReFuelEU Aviation (Reg. EU 2023/2405). Revision of the EU ETS Directive (Dir. 2023/958). CORSIA Pilot Phase concluded. Update of ICAO/TAB EEU list for 2024–2026.
2024
Start of CORSIA Phase 1 mandatory (2024–2026). First year of compensation obligation. Further reduction in free allowances under EU ETS. Progressive activation of non-CO₂ MRV.
2025
Non-CO₂ effects MRV fully active. SAF quotas mandatory at 2% (ReFuelEU). Submission of the first non-CO₂ report to EU Member States. EUA market: no residual free allowances for aviation.
2026
Complete phase-out of free allowances under EU ETS. Commission review of CORSIA and possible scope extension. End of CORSIA Phase 1: retirement of EEU units by the deadlines. Update of the EEU list for Phase 2 (2027–2029).
2027
Start of CORSIA Phase 2 (universal application). European Commission report on non-CO₂ effects and possible legislative proposal. Possible extension of the EU ETS scope to extra-EEA routes.
Slide 12 — Outlook
Outlook 2026 and Beyond: Market Scenarios and Regulatory Trends
Credit Market: Scarcity Risk
Demand for CORSIA-eligible units is expected to increase significantly with the entry into force of mandatory Phase 1 for all operators in participating States. The supply of high-quality credits with corresponding adjustment is structurally limited.
  • Expected increase in prices for high-quality EEUs
  • Risk of illiquidity for operators that do not plan ahead
  • Competition with other sectors in the voluntary market

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Expected Regulatory Evolution
Regulatory trends indicate a progressive tightening of the rules:
  • ICAO: possible upward revision of LTAG (Long Term Aspirational Goal) ambitions and strengthening of EEU criteria for Phase 2
  • EU: possible integration of non-CO₂ effects into the ETS regime after 2027, with compliance cost impacts
  • Green Claims Directive: restrictions on the communicative use of offset credits towards consumers
  • CSRD/ESRS: disclosure obligations on decarbonisation strategies and the use of credits

Companies that do not begin structuring a long-term strategy now risk being exposed both on costs and on regulatory reputation.
Slide 13 — Best Practice
Operational Recommendations for Airlines and Stakeholders
Mapping Compliance Obligations
Each operator must identify precisely which routes are subject to EU ETS, which to CORSIA, and which to both. The regulatory overlap requires separate and documented management of obligations, with traceability of retirements by scheme.
Audit and Due Diligence on Credits
Before purchasing any credit for compliance, verify: reference standard, ICAO/TAB approval for CORSIA, vintage year, presence of corresponding adjustment, status in the retirement registry, and the project’s track record.
Integration into ESG Strategy and Reporting
Carbon credits must be placed within a climate strategy that is consistent with the organisation’s decarbonisation objectives. Their use must be communicated transparently in sustainability reports (CSRD, GHG Protocol, SBTi).
Training and Internal Governance
Compliance, finance, and sustainability teams must have up-to-date expertise in CORSIA and EU ETS rules. It is recommended to appoint a Carbon Compliance Officer or equivalent role with cross-functional oversight.
Slide 14–15 — Conclusions and Next Steps
Conclusions: Carbon Credits as a Transitional Tool
Carbon credits are not an alternative to direct decarbonisation. They are a legitimate and necessary tool for managing compliance during the transition period, provided they are high quality, suitable for the applicable scheme, and integrated into a coherent and verifiable climate strategy.
📋 Next Step 1
Carry out a gap analysis of the regulations across all applicable EU ETS and CORSIA obligations for the fleet, with projections of obligations for 2026–2029.
✈️ Next Step 2
Develop a procurement strategy for compliance units with a multi-year horizon, including forward contracts and diversification of the credit portfolio.
🌿 Next Step 3
Launch or strengthen the SAF blending programme to meet ReFuelEU quotas and structurally reduce exposure to the credit market in the medium term.
📊 Next Step 4
Implement the MRV system for non-CO₂ effects in line with the NEATS framework, collecting primary flight data to prepare for the regulatory evolution expected by 2027.
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