• Data from Sylvera is reported to show that the bottleneck to CORSIA Phase 1 supply is authorisation from host-countries as at least US$ 2 billion of CORSIA compliance is awaiting this process.

Sylvera data has indicated that CORSIA Phase 1 fuel supply has outstripped demand as it stands at more than 17 times current confirmed levels. Between US$ 2-5 billion compliance spend is, however, waiting to be unlocked by host countries. This has led to the data platform indicate that the bottleneck in the current process is authorisation, not the ambition of the project to transition to more sustainable aviation fuels (SAFs).

The data shows that 640 million tonnes of credits are ‘theoretically eligible’ for CORSIA’s Phase 1 compliance, but only 37 million tonnes currently meet all requirements, as national authorisation processes are not keeping pace with the changing market dynamics.

“The strangest thing about this market is that everyone is behaving rationally and the outcome is still irrational. Buyers won’t commit because they can’t see the supply; host countries won’t issue authorisations because prices are too low to justify the political capital. Meanwhile, a $2–5 billion compliance deadline is approaching, and the clock is running.” Ben Rattenbury, VP Policy, Sylvera.

Both Sylvera and Ludovic Chatoux, CEO and co-founder of Rainbow, an ICVCM-approved carbon credit registry have outlined letters of authorisation as what will unlock the door to authorise these carbon credits.

Letters of authorisation

Letters of Authorisation from national governments are the current standard practice to authorise carbon credits amd CORSIA-elegible credits under the Paris Agreement’s article 6. But, this comes with a trade-off, as goverments then in theory cannot use these emission reductions towards their own climate policies.

To summarise the current situation, double counting must be avoided, and this then causes the reluctance to grant authorisation, CORSIA eligible emissions units must meet criteria that rule out being double issued, double used or double claimed. Once a unit is cancelled for CORSIA compliance, it is permanently retired for that purpose and cannot be surrendered anywhere else.

Where is this heading

“The demand driven by CORSIA is not a potential issue for 2030, and it’s already becoming evident. Sylvera’s airline-level emissions modelling shows that CORSIA accounts for 67 percent of all adjusted-credit demand to 2030 – 610 million tonnes out of a total 915 million tonnes when government NDC purchases are included,” stated Sylvera’s report.

“To complicate the picture further, CORSIA-eligible credits do not always end up in CORSIA. Sylvera data already shows CORSIA-tagged African cookstove credits selling into the voluntary market – meaning headline eligible figures overstate what is actually available for airline compliance.”

With some credits being sold to buyers from outside the airline market, and at least one major airline reported to be considering not following the rules at all, there is certainly a need for clarity.

Collaboration and transparency

The bottleneck needs to be corked. Of course there is a need transparency and communication between stakeholders, but an imminent deadline is looming and time is of the essence.

“The supply to meet aviation’s climate obligations exists. What’s been missing is the data infrastructure to connect it with demand. The Hub exists so that every participant – airline, sovereign, investor, developer, can see exactly where in the pipeline opportunity lies, and act on it with confidence,” said Allister Furey, CEO of Sylvera.

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