With CORSIA Phase I underway and Phase II on the horizon, airlines face pivotal decisions. While many remain hesitant to act amid uncertainty, early movers could gain a strategic and financial advantage.
While the aviation sector continues to chart its path towards net zero, a new chapter in emissions accountability has begun. Developed by the International Civil Aviation Organization (ICAO), the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is now in its first phase with imminent retirement deadlines. While some carriers have begun aligning their strategies accordingly, others are adopting a cautious, wait-and-see approach.
But with Phase I retirement deadlines fast approaching and the mandatory phase starting in 2027, the next two years present a critical window for action. Early engagement could provide not just compliance assurance – but a competitive edge.
The case for early action
The rationale behind the wait-and-see mindset is understandable. Airlines face a complex matrix of regulatory schemes – CORSIA, the EU Emissions Trading System (ETS) and sustainable aviation fuel (SAF) mandates – each with their own timelines, cost implications and enforcement mechanisms.
“We’re seeing a growing interest from airlines looking to proactively and carefully shape their CORSIA strategy. There’s a clear opportunity for airlines and operators to build internal readiness and secure access to eligible credits ahead of potential market constraints.”
Raman Ojha, President of Shell Aviation
Within that landscape, the supply constraints and evolving eligibility requirements associated with CORSIA Eligible Emissions Units (EEUs) add further layers of uncertainty. However, by delaying action, airlines potentially expose themselves to unintended risks – including escalating EEUs prices and limited availability.
In addition, these risks are seemingly becoming tangible. For instance, the UK recently introduced draft legislation proposing fines of £100 per tonne of CO₂ for non-compliance under its ETS scheme*1 – which is aligned with CORSIA requirements. Meanwhile, Canadian legislation stipulates fines up to CAD $25,000 for non-compliance with its domestic implementation of CORSIA since 2021*2. While enforcement varies by jurisdiction and countries, these developments point to a clear trend: emissions-related costs and compliance obligations are gaining prominence across the regulatory landscape for the industry.
Early movers and hedgers
Despite the uncertainties, momentum is slowly but surely building, with a marked increase in airline engagement evidenced by recent activity on the International Air Transport Association’s (IATA) Aviation Carbon Exchange (ACE) platform – where participation and procurement volumes are rising. In March 2025, 15 airlines purchased credits at $22.25/tonne, up from $21.70 last year*3.
The SAF precedent
The path to CORSIA readiness mirrors the aviation industry’s journey with SAF. While SAF production volumes still account for only 0.3% of global jet fuel in 2024*4, SAF is emerging as a cornerstone of decarbonisation strategies – supported by mandates, incentives, and growing supply chains.
CORSIA is now at an inflection point: the policy structure is in place, but action is needed. Airlines that engage early can scale investment gradually, giving themselves a chance to build internal capability and avoid being outpaced by regulatory enforcement or market demand.
Beyond compliance
For the aviation sector, decarbonisation is not simply a regulatory obligation, it’s a societal licence to grow. By integrating CORSIA into broader energy transition strategies today, airlines can future-proof their operations, manage financial risk and advance their net-zero goals in an era of increased climate accountability.
As CORSIA moves towards full implementation, airlines can purposefully use the next two years to build internal readiness, secure access to eligible credits and integrate emissions compliance into broader decarbonisation strategies. With over a century of aviation sector knowledge and more than two decades of carbon market expertise, Shell Aviation supports customers in navigating this transition, offering strategic insights and solutions in an evolving market.
- Implementing the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), Department for Transport, December 2024
- Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), Government of Canada, May 2023
- Xpansiv to Launch CBL GEO® CORSIA Phase | Standardized Contract April 29, Xpansiv, March 2025
- Disappointingly Slow Growth in SAF Production, IATA, December 2024
