Photo: Shutterstock The International Civil Aviation Organization (ICAO) has joined an industry alliance working to increase the supply of carbon credits available to airlines under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), as the sector approaches a key compliance deadline in 2027.
The announcement was made by the International Air Transport Association (IATA) at its World Sustainability Symposium. ICAO's participation is intended to strengthen cooperation among governments, airlines and carbon market stakeholders to address obstacles limiting the availability of eligible emissions units (EEUs).
The Supporting Alliance for CORSIA EEU Supply brings together more than 80 stakeholders. Its work focuses on helping countries authorize emissions units for use under CORSIA while preventing the same emissions reductions from being counted more than once.
The process involves coordinating countries' commitments under the Paris Agreement with CORSIA's requirements for authorizing emissions units. The alliance also helps countries access technical expertise and practical resources related to carbon markets and Article 6.2 of the Paris Agreement, which establishes a framework for international cooperation through the transfer of emissions reductions.
Despite recent progress, the aviation sector still faces a significant shortfall in the supply of eligible units needed for the scheme's initial compliance cycle.
As of August 2026, 42 CORSIA-compatible Letters of Authorization covered 72 million EEUs, up from 40 million at the beginning of the year. However, an estimated 200 million to 250 million units will be needed for the initial compliance cycle, leaving a substantial gap between authorized supply and projected demand.
Marie Owens Thomsen, IATA's Senior Vice President for Sustainability and Chief Economist, said the increase in supply was encouraging but that progress needed to accelerate. She added that ICAO's participation would strengthen cooperation among stakeholders and help CORSIA meet its objectives as the global framework for addressing emissions from international aviation.
Tetsuya Tanaka, ICAO's Deputy Director of Environment, said the organization was working with governments, the aviation industry and carbon market participants to support CORSIA's implementation. He said joining the alliance would strengthen efforts to ensure sufficient eligible emissions units are available.
Because there is a massive shortage of approved carbon credits, the price of these credits will inevitably spike as airlines scramble to buy them before the December 2027 deadline.
Airlines operate on razor-thin profit margins. This means that when their regulatory compliance costs go up, they historically pass those expenses directly down to the consumer.
Passengers could likely see an increase in base airfares or the introduction of explicit "environmental surcharges" on international tickets.
Since CORSIA specifically targets international flights, domestic flights (e.g., flying within the US or within a single country) are not expected to be impacted by this specific scheme.
However, the longer the international flight, the more CO₂ it emits, meaning the airline has to buy more credits to offset it. Passengers flying intercontinental routes (like New York to London or London to Dubai) will bear the heaviest financial burden of these carbon costs.
To avoid simply raising ticket prices across the board, some airlines may integrate carbon costs into their loyalty programs. You might see airlines requiring a small cash co-pay or extra frequent flyer miles on international award tickets to cover the flight's mandatory environmental offsets.