Airlines Face a Shortage of Carbon Credits Needed to Meet International Aviation Climate Targets
- ICAO joins industry alliance as airlines face a shortfall ahead of the January 2028 deadline
IATA and ICAO: Who Are They?
IATA (International Air Transport Association): The global trade association representing more than 370 airlines, accounting for approximately 85% of global air traffic. It represents the airline industry’s interests and develops industry standards.
ICAO (International Civil Aviation Organization): A specialized agency of the United Nations bringing together 193 Member States to develop international civil aviation standards, policies and recommended practices, including measures addressing aviation’s environmental impact.
Overview
The international aviation industry faces a significant shortage of eligible carbon credits needed to meet its obligations under CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation), established by ICAO and its Member States in 2016.
In a press release dated 13 October 2026, IATA announced that ICAO had joined the Supporting Alliance for CORSIA Eligible Emissions Units (EEU) Supply. The alliance aims to address bottlenecks preventing sufficient eligible carbon credits from reaching the market.
The Supply-Demand Gap
Demand: Airlines are expected to need approximately 200–250 million eligible emissions units for the first CORSIA compliance period, covering emissions from 2024 to 2026.
Supply: As of August 2026, 42 CORSIA-compatible Letters of Authorization covered 72 million emissions units, compared with 40 million at the beginning of the year.
The shortfall is substantial. To meet their obligations for the first CORSIA compliance period (2024–2026), airlines must acquire eligible carbon credits and permanently cancel them by 31 January 2028. Cancellation means formally withdrawing credits from circulation in a carbon registry, ensuring they cannot be reused or claimed by another party.
Why Does the Shortage Persist?
Three stages help explain the supply challenge:
- Programme approval: ICAO establishes eligibility criteria and approves emissions unit programmes. On 26 November 2025, it announced additional approvals, including four programmes for the 2027–2029 compliance period: American Carbon Registry, Architecture for REDD+ Transactions, Gold Standard and Verified Carbon Standard.
- Governments authorization: Countries hosting carbon-credit projects must issue the relevant Letters of Authorization and apply the necessary accounting measures to prevent double-counting under the Paris Agreement.
- Market availability: Programme approval alone does not guarantee that sufficient government authorized credits will be available. Delays in government authorizations and credit issuance can constrain supply.
Next Steps
The Supporting Alliance brings together more than 80 stakeholders to help countries accelerate authorizations, access technical expertise and facilitate carbon-market transactions while preserving environmental integrity.
ICAO’s participation strengthens cooperation between governments, industry and carbon-market stakeholders. However, according to IATA’s August 2026 figures, an estimated additional 130–180 million eligible emissions units are needed to meet airlines’ obligations under CORSIA for the first compliance period (2024–2026). These units must be acquired and permanently cancelled by 31 January 2028 to count towards compliance.
Official Sources
- IATA, 13 October 2026: ICAO Joins Supporting Alliance for CORSIA EEU Supply
- ICAO, 26 November 2025: ICAO expands approved emissions unit programmes for effective CORSIA implementation
