Decarbonising aviation – What CORSIA means for airlines
CORSIA is a global emissions reduction scheme which aims to address, reduce and compensate CO2 emissions caused by international flights. With CORSIA Phase I in full swing and Phase II on the horizon, now is a critical time to plan a strategic approach to manage your organisation’s compliance risks and optimise your procurement strategy.
Ask the experts
With CORSIA Phase I in full swing and Phase II on the horizon, how should airlines respond? In this Ask the Experts series, the Shell team unpacks market signals and share practical actions to help buyers navigate CORSIA compliance with confidence.
Across hard-to-decarbonise sectors like aviation, finding opportunities to reduce or compensate emissions is key to securing a license to grow.
As the aviation sector works towards net-zero emissions, no single solution will be enough on its own. Achieving meaningful progress will require a mosaic of solutions and measures – from technological innovation and operational efficiency to sustainable aviation fuel (SAF) and market-based mechanisms.
The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is the first global market-based measure developed by the International Civil Aviation Organisation (ICAO) to address emissions from international air transport. CORSIA aims to stabilise aviation’s net CO2 emissions caused by international flights, both commercial and business, through carbon offsetting and the adoption of lower-carbon aviation fuels, such as SAF.
How does it work?
Which airlines must comply?
All airlines from ICAO member states must calculate and submit their annual emissions to ICAO against the CORSIA emissions baseline (85% of 2019 emissions).
Which emissions must be reported?
CORSIA takes a route-based approach, which means when aircraft operators calculate their CO2 emissions annually, they need to include emissions from their operations on all international routes covered by the scheme.
What is the emissions threshold?
Airlines must compensate for annual CO2 emissions in excess of 10,000 tonnes per metric tonnes.
How can airlines comply?
Airlines can compensate for their emissions by purchasing CORSIA Eligible Emissions Units (EEUs) or CORSIA Eligible Fuels (CEFs), such as SAF. EEUs are ICAO-approved carbon credits generated through carbon reduction or removal projects.
How are emissions verified?
To ensure integrity and accuracy, all annual reports are subject to third-party verification.
Challenges for airlines
At Shell, we understand that navigating CORSIA compliance can be complex. Several factors are at play — from evolving regulations and reporting requirements to offset eligibility and fuel choices.
Limited supply
The aviation sector is expected to require 105-150 million EEUs during CORSIA Phase 1.1 As of 30 March, 32.7 million EEUs have been issued to supply CORSIA Phase 1.2 Early strategic action may help airlines secure credits as demand increases.
Growing competition
EEUs are increasingly being used as a quality marker for carbon credits, making them attractive to sectors beyond aviation. This may drive higher competition and prices.
Price fluctuations
Historically, prices for EEUs have been high and unpredictable, which has made airlines hesitant to start purchasing. There are also limited hedging options available.
Strict EEU standards
To be compliant, EEUs must be issued from 2021 onwards and require corresponding adjustments (CAs) and Letters of Authorisation (LoAs) from the project’s host country. This requires airlines to carefully verify credit integrity and eligibility.
Host country readiness
Many host countries are still developing their frameworks for issuing CAs and LoAs. Airlines must stay informed about evolving approval processes.
Evolving landscape
CORSIA regulations may evolve as accounting frameworks mature, including potential changes to the baseline or credit eligibility. This requires continuous attention to stay informed.
The case for early action: why airlines should plan for CORSIA now
Effectively navigating CORSIA compliance is more than simply meeting regulatory requirements – it can offer a strategic advantage. Airlines that proactively integrate CORSIA into their decarbonisation planning today can gain a competitive advantage by better managing risk, adapting to potential regulatory shifts and meeting stakeholder expectations, including from investors.
Proactive compliance
Taking early action on CORSIA compliance allows airlines to stay up to date with regulatory requirements, reducing the risk of penalties or last-minute operational challenges. It also creates space to plan strategically — offering greater flexibility and control when managing emissions obligations, selecting offsets, and incorporating lower-carbon fuels into operations.
Cost optimisation
Engaging early in the carbon market can help airlines secure favourable prices for EEUs and CEFs, reducing exposure to future price fluctuations. This not only provides greater cost certainty but also supports more competitive and stable ticket pricing — helping protect margins while advancing decarbonisation goals.
How Shell can support you with your CORSIA strategy
Comprehensive solutions
Shell provides jet fuel, SAF and EEUs alongside EU ETS and voluntary carbon market products, offering a one-stop solution for compliance and decarbonisation. Our experts offer strategic guidance on optimising compliance strategies, credit procurement, and SAF integration.
Tailored support and reliability
As a global player with an S&P A+ rating, with over 100 years of aviation experience as well as over 20 years3 of carbon market experience, Shell offers flexible commercial agreements designed to meet each airline’s unique operational needs, risk appetite and financial strategy.
Powering progress
Shell is delivering value to customers through scalable, innovative initiatives that support a lower-carbon future. For example, our pioneering book and claim solution, Avelia, has contributed to the injection of over 29 million gallons of SAF into the existing global fuel network and the abatement of 269,000 tonnes of CO2 equivalent4 - enough to offset the emissions of more than 475,000 passengers flying from London to New York.5 In 2023, Shell deployed $86 million for nature - and technology-based projects that generate carbon credits.6
Resources to navigate CORSIA compliance
Your guide to procuring CORSIA Eligible Emissions Units (EEUs)
This curated resource is intended to help you understand CORSIA compliance requirements, strategise your procurement of eligible emissions units (EEUs), and navigate the complexities of purchasing credits.
Staying ahead with clear deadlines and defined actions
Taking a proactive approach to CORSIA compliance not only helps airlines prepare ahead of regulatory deadlines — it could also provide a strategic advantage by reducing risk, managing costs and strengthening stakeholder trust in a rapidly evolving market.
Insights to CORSIA: Market trends and strategies for airlines
Access our on-demand webinar featuring an expert panel of industry leaders as they explore the shifting dynamics of the CORSIA carbon credit market and share key strategic moves airlines should consider in this evolving regulatory landscape.
Shell Low Carbon Solutions Insights Hub
Get expert insights from our leaders, learn about emerging technologies, regulations and policies, and see how innovative solutions can shape a lower-carbon future.
Disclaimers
1 ICAO, Technical Assessments in Support of the 2025 CORSIA Periodic Review (PDF), 2025
3 Based on Shell’s first carbon allowance trade during the EU ETS setup phase in 2003, prior to the scheme’s formal launch in 2005
4 Actual life cycle GHG emissions intensity of neat SAF and baseline comparator might vary per region/feedstock.
5 The number of one-way long haul average passenger flights has been calculated based on the following assumptions, a flight distance between London and New York of 5541km, and an emissions factor for a long-haul flight of 0.102 kgCO₂e/passenger-km based on UK DEFRA 2022 emissions factors for corporate reporting.
6 Shell, Sustainability Report, 2023
Disclaimer
Disclaimer
Cautionary Note
The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this content “Shell”, “Shell Group” and “Group” are sometimes used for convenience to reference Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this content refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
Forward-Looking statements
This content contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions, including (without limitation) those concerning Shell’s strategy and operating plans, macroeconomic conditions, future energy demand, supply and product mix, commodity prices, demand for Shell’s products, production results and reserve estimates, development, execution and management of projects, energy transition and climate change, management of safety and environmental risks, costs, cash capital expenditures, technology advancements, legislative, judicial, fiscal and regulatory developments, regional conflicts and trading conditions, and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; ‘‘anticipate’’; “aspire”, “aspiration”, ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; “desire”; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; “vision”; ‘‘will’’; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this content, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks, including climate change; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including tariffs and regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, regional conflicts, such as the Russia-Ukraine war and the conflict in the Middle East, and a significant cyber security, data privacy or IT incident; (n) the pace of the energy transition; and (o) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this content are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2025 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this content and should be considered by the reader. Each forward-looking statement speaks only as of the date of this content. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this content.
Shell’s net carbon intensity and net-zero emissions target
In this content we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our combined Scope 1 and 2 target, NCI target and our oil products ambition over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
The information provided above regarding Shell’s NCI and net zero emissions target are not intended, nor should they be construed as introducing, suggesting or making any claim, target or representation thereof other than what is included in the content.
Forward-Looking non-GAAP measures
This content may contain certain forward-looking non-GAAP measures such as free cash flow and underlying operating expenses. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements. These forward-looking non-GAAP measures are provided to assist readers in understanding management’s use and expectations of such measures and may not be appropriate for other purposes.
The contents of websites referred to in this content do not form part of this content.
We may have used certain terms, such as resources, in this content that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.
