The cost of carbon credits under the UN's Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) could spike to as much as $60 per tonne of CO₂ equivalent (tCO₂e) during the current compliance phase, according to new analysis by ratings agency Sylvera. The increase would result from limited adoption of key carbon accounting measures by countries hosting credit-generating projects.
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Sylvera’s latest report outlines six possible pricing scenarios for CORSIA credits, with outcomes heavily dependent on how many countries issue ‘corresponding adjustments’ (CAs)—a requirement under Article 6 of the Paris Agreement to avoid double counting of emission reductions.
If host countries broadly approve authorisations, total supply could reach 274 million CORSIA Eligible Emissions Units (EEUs). But under the most constrained scenario—where only seven countries provide CAs—supply could shrink to just 136 million EEUs against the estimated demand of 144 million.
‘Conversely, if few countries are ready to authorise credits, first phase [2024–2026] supply could be constrained to just 136 million EEUs’, the report stated.
CAs play a pivotal role in determining whether credits are eligible for CORSIA compliance. These adjustments ensure emissions reductions are counted only once—by the country where they occur or by the airline purchasing the credit.
Read more: Cookstoves and policy drive up carbon credit issuances in Q2
The report includes a country-level readiness assessment, with Ghana singled out as having very high Article 6 readiness and potential to supply 600,000 EEUs. Zambia, Rwanda, Cambodia, and Peru are in the high readiness tier, jointly offering up to 3.7 million EEUs. In contrast, Brazil, Colombia, Mexico, and Nigeria fall into the low readiness category, while Vietnam, Malaysia, and South Africa are classified as very low.
Parallel research by MSCI supports the tight market outlook. The firm estimates CORSIA demand for the 2024–2026 phase could range from 111 to 163 million EEUs, depending on global airline and country participation. According to MSCI, 10 major airlines—including Emirates, United, British Airways, and Delta—are expected to make up one-third of global CORSIA demand during this phase.
MSCI’s own modelling sees prices averaging $63/tCO₂e under high-demand and tight-supply conditions, compared to $26/tCO₂e if both demand and supply are more flexible.
Read more: Carbon credit price guide: Understanding spot, forward, and market factors
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