The 235th ICAO Council Session (9 June – 4 July 2025) will bring further clarity on demand, supply of eligible fuels and units, pricing, and cost projections. These developments are crucial for tracking market evolution and informing immediate next steps.
This blog outlines the review's main takeaways, expected outcomes and ways for businesses to prepare for the future.
In March 2025, the ICAO Committee on Aviation Environmental Protection (CAEP) presented a comprehensive update to its CORSIA analysis as part of the second periodic review. This evaluation took a closer look at the:
Key findings to date include:
Outcomes from the 2025 periodic review of CORSIA are due at the 235th ICAO Council Session (9 June – 4 July 2025). This will shed further light on how the scheme is performing and where improvements may be needed.
Areas being evaluated include:
What we expect to learn:
The evaluation also aims to determine if existing carbon credit programmes (such as ACR, ART, Gold Standard, and Verra) should be extended into the 2027-2029 period. This decision will directly impact future CORSIA EEU supply.
The evolving landscape of CORSIA presents several critical market dynamics and actionable insights for its key stakeholders.
CORSIA offsetting obligations began in 2024, creating robust demand for CORSIA Eligible Emissions Units. This strong demand presents a major opportunity for carbon project developers but also highlights a potential supply gap. Aeroplane operators must develop comprehensive compliance strategies, whilst project developers and host countries should accelerate project development and authorisation processes to meet and capitalise on this burgeoning demand.
Phase I costs are projected at USD 1.3 billion if only CORSIA EEUs are procured, a stark contrast to USD 8.4 billion when CORSIA Eligible Fuels are included. This implies that EEUs are currently more economic than the abatement costs associated with CEF. The gap also presents EEUs as the near-term option for cost-sensitive mitigation measures. Aeroplane operators should consider locking in available EEUs and prices promptly to mitigate future cost increases, whilst project developers must move quickly to meet this expected demand.
Forecasts indicate higher EEU prices (e.g., up to USD 20.80/tCO2 in a high scenario) could significantly incentivise new supply, boosting the economic viability of emission reduction projects and attracting crucial new investment. To leverage this, aeroplane operators can engage early on with project developers to ensure units meet CORSIA eligibility . Exploring forward purchase options and diversifying portfolios helps secure supply and manage future risks.
The ICAO Council is set to finalise the 2025 CORSIA periodic review during its current June session, providing crucial recommendations to the ICAO Assembly. These outcomes could significantly shape the CORSIA market. By offering the latest assessment, enhancing transparency around supply, demand, and pricing, and providing clearer insights into the scheme's future, these results will build greater confidence for both airlines and carbon market stakeholders as CORSIA progresses into Phase II.
Whether you're an airline, project developer, or regulator, staying ahead of these changes can help you unlock the opportunities this global scheme presents. Engaging with CORSIA markets early and acting now is therefore essential.
Contact our team today to explore how we can help you understand and develop effective CORSIA strategies for your decarbonisation journey.
