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.
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
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
A a global player with an S&P A+ rating, with over 100 years of aviation experience as well as over 20 years 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 equivalent3 - enough to offset the emissions of more than 475,000 passengers flying from London to New York.4 In 2023, Shell deployed $86 million for nature - and technology-based projects that generate carbon credits.5
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.
Is your airline on track for the CORSIA compliance deadline?
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.
