Geneva – The International Air Transport Association (IATA) announced its intention to hold regular procurement events in 2025 for airlines to purchase Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) Eligible Emissions Units (EEUs). This followed the successful conclusion of IATA’s first procurement event with the following highlights:
This was the first large-scale purchase of CORSIA Phase 1 EEUs by airlines. The CORSIA EEUs purchased were Jurisdictional REDD+ ART Trees Guyana credits, which remain the only CORSIA EEUs available, and sold for $21.70 /tonne as part of the fixed-price auction/offering. These will be useable by airlines in fulfilling their CORSIA Phase 1 offsetting obligations covering traffic for the period 2024-2026. The EEUs must be canceled by 31 January 2028.
The first procurement event was open to airlines only and ran from 28 October to 29 November 2024, and was supported by the Government of Guyana, Mercuria, and Xpansiv. Xpansiv operates, with IATA, the Aviation Carbon Exchange (ACE) which facilitated the sale.
IATA, via the ACE, intends to host quarterly CORSIA EEUs procurement events for airlines in 2025, with the next event being held alongside Guyana and Mercuria in Q1.
Those involved with the first procurement event shared various perspectives:
“IATA’s procurement event provided an optimal transparent and auditable process for Pegasus to purchase credits to fulfill our obligations under CORSIA. We were pleased to acquire EEUs to support the market for high-integrity carbon credits that are essential for airlines to meet the ambitious emissions goals set in CORSIA,” said Barbaros Kubatoğlu, Pegasus Chief Financial Officer.
“The success of the first procurement event demonstrated the airline industry’s commitment to both the offsetting and reduction aspects of CORSIA, which is essential to the sector’s decarbonization goals. To serve the significant projected future demand for EEUs from airlines we look forward to holding similar events in 2025 and beyond. The major challenge is availability of credits to meet demand. The solution rests on the CORSIA agreement which obligates countries to make credits available. Other governments should follow Guyana’s strong lead,” said Marie Owens Thomsen, IATA’s Senior Vice President Sustainability and Chief Economist.
“This event was successful because the participating airlines showed that they are willing to pay fair price for the countries and communities doing the hard work of protecting forests and mitigating climate change. For too long, this price signal was missing. Valuing nature in this way marks an important step toward recognizing the true value of natural ecosystems for sustainable development. If this is sustained, we could finally see real progress on ambitious climate action through financing forests in a way that benefits buyers, sellers and the entire world,” said Bharrat Jagdeo, Vice President of the Co-operative Republic of Guyana.
“Mercuria’s mission is to leverage the power of markets to direct funds to vital carbon offset projects and enable companies to meet their emissions targets. The procurement event sent an important signal that EEUs command a premium price, which should encourage greater supply to flow to CORSIA rather than other sources of offset demand,” said James Cooper, Head of Origination EMEA, Environmental Products, Mercuria.
“Since 2020 we have worked with IATA to develop a secure marketplace and infrastructure enabling airlines to transact high-quality carbon credits, including EEUs to fulfill CORSIA obligations. We were excited by the enthusiastic uptake of the first procurement event last year and are encouraged by the growing number of airlines joining ACE to participate in future events,” said John Melby, CEO, Xpansiv.
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Notes for Editors:
Under CORSIA, airlines are obliged to purchase and cancel “eligible emissions units, EEUs” to offset the increase in CO2 emissions covered by the scheme. The EEUs must meet strict eligibility criteria defined by the International Civil Aviation Organization (ICAO) and one EEU equates to one tonne of CO2 emissions reduction. States, however, have optionality regarding whether to release EEUs to the airline industry or other potential buyers (other States, industries, etc.). States also have their own need for EEUs in order to meet their Nationally Determined Contributions (NDC) under the UNFCCC Paris Agreement. In order to ensure that the same EEUs are not double claimed by multiple entities, host countries must authorize the release of EEUs to be claimed under CORSIA by issuing Letters of Authorization and undertaking corresponding adjustments.
The IATA Aviation Carbon Exchange, or ACE, is a centralized marketplace for CORSIA eligible emission units where airlines and other aviation stakeholders can trade CO2 emission reductions for compliance or voluntary offsetting purposes. The exchange is powered by Xpansiv’s CBL spot trading platform, providing a secure, intuitive destination for airlines to access real-time data with full price transparency.
Airlines trading on ACE benefit from IATA ‘s Financial Settlement Systems and Clearing House for seamless and risk-free settlement of funds. The exchange is open to all airlines, IATA and non-IATA members, and other aviation stakeholders including airports and aircraft manufacturers. Furthermore, the exchange is also accessible to carbon market participants wanting to list emissions reduction that are CORSIA compliant.
Airlines had the opportunity to purchase CORSIA Phase 1 eligible credits from the Guyana Jurisdictional REDD Program issued under the ART TREES Standard and supplied by Mercuria.
Airlines were able to express anonymously their interest in the credits on the ACE platform. The purchase of the credits was settled via the platform at the end of the event, with the option of using the IATA Clearing House or a Bank of America FBO (For Benefit Of) account set up in the airline’s name for the payment. Mercuria was also able to provide transaction options for forward and multi-year purchases.
CORSIA is the only global market-based measure scheme to address CO2 emissions from international aviation. CORSIA is implemented in three phases, with an initial voluntary period (2021-2026) followed by a mandatory phase starting in 2027 for most countries. The scheme also requires airlines to monitor, report, and verify their emissions to ensure transparency.
For more information on CORSIA, please refer to IATA’s CORSIA Handbook (pdf).
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