Sustainable aviation: how to build a procurement strategy for CORSIA

CORSIA’s phase 1 period marks a significant inflection point for the aviation industry. For the first time, international carriers are required to offset emissions using Eligible Emission Units, which are carbon credits approved by the CORSIA program.

This new compliance environment places direct responsibility on procurement functions to develop and execute a robust strategy that aligns with budget limits, regulatory timeframes and market fluctuations.

Building an effective procurement strategy is easier said than done, and many in the aviation industry are playing catch up as we approach the mid-way point of CORSIA Phase 1, which runs from 2024 until 2026.

To help you navigate this critical phase and build a resilient procurement framework, we’ve outlined six essential steps to help guide your compliance and strategic success.

Step 1: Understand ICAO eligibility rules

Airlines must ensure that every unit meets strict criteria set by the International Civil Aviation Organisation (ICAO). That is to say, not all carbon credits are eligible under CORSIA.

Eligible Emissions Units (EEUs) are those that:

• Come from approved registries: EEUs must originate from an ICAO-approved registry: Gold Standard and Verra’s Verified Carbon Standard have the widest reach in this space.
• Have been earned in an eligible period: For Phase 1, EEUs must be issued from projects that commenced in 2016 or later, and relate to activities that were conducted in 2021 to 2026 (these are known as vintages).
• Arise from an eligible activity: Some methodologies cannot be used for EEUs. Common exclusions include most avoided deforestation and renewable energy activities, with some exceptions.
• Are authorised for transfer from the host country: EEUs require a Corresponding Adjustment, or a guarantee that a Corresponding Adjustment will be granted (typically via a Letter of Authorisation and a linked insurance policy).

Step 2: Define your volume requirements

It’s vital that EEU procurement is treated not as a last-minute compliance cost, but as a structured part of the airline’s commodity and risk strategy. Airlines can plan for their EEU requirements with the same strategic discipline applied to fuel and emissions hedging.

While the precise methodology is defined by ICAO and the actual calculation relies on a sectoral growth rate published annually by ICAO, airline procurement teams can project their annual offset obligations in a broad manner, across multiple years.

Multi-year projections set the financial parameters within which the optimal volume procurement can be established. For airlines with tight budget constraints, procurement planning must be approached with heightened diligence and strategic foresight.

Step 3: Assessing procurement models

Airlines have several broad options when it comes to procuring credits, including:

Forward offtakes and spot purchasing are conventional approaches in commodity markets. Many procurement teams may be familiar with these models from previous purchases, such as voluntary carbon credits for customer-initiated offsetting.

Conditional procurement is a feature of the current CORSIA market. Carbon credits may be purchased on the basis of ‘conditions precedent’ by delivery: typically requiring the credits to achieve the necessary steps to be tagged as Eligible Emissions Units, in return for a discounted price or some other concessions.

Step 4: Define what matters

There are many different perspectives on the hierarchy of needs when purchasing EEUs. Some may only care about the credits status as EEU and the cost of the credit.

However, there are other considerations that you may find important. For example:

• The geographic origin of the EEUs.
• The activity types that the EEUs were earned from, and potentially the other characteristics of that activity (e.g. quality / integrity, or co-benefits).
• The standard that the EEUs were issued on.
• The compatibility of the EEUs with futures markets.

There can also be considerations for your overall credits portfolio, over and above the characteristics of the individual eligible emissions credits.

Addressing these considerations upfront in the planning phase can significantly streamline decision-making to save time and effort during procurement.

Step 5: Evaluate counterparty credibility

Trust and reliability are crucial when selecting your EEU procurement partners, particularly for multi-year commitments which carry substantial financial and regulatory implications.

It’s best to avoid intermediaries lacking compliance infrastructure and financial credibility. Work with trading partners who demonstrate experience with ICAO-approved registries, maintain direct ties to the underlying projects, and offer comprehensive support throughout the procurement process.

By working with CSC and the wider Marex OTC Hedging Solutions team, airlines can benefit from partnering with a solid and credible counterparty, backed by investment-grade credit ratings, strong financial standing and a proven track-record in risk management.

Step 6: Time your purchases of EEUs strategically

Carbon market conditions are tightening. With increasing demand and finite supply of CORSIA-eligible credits:

• Early engagement reduces pricing risk and execution bottlenecks.
• Phased procurement strategies can reduce your exposure to volatility.

Build the capabilities to execute

CORSIA Phase 1 is more than a test – it’s the start of a regulated market era. Airlines that act early and structure their procurement strategies can reduce price exposure, secure eligible supply, and meet compliance deadlines with confidence.

CSC’s carbon trading team offers:

• Direct access to CORSIA-eligible credits from ICAO-approved registries and a robust supply network.
• Market expertise and sourcing across spot, forward guarantees and conditional structures.

Backed by Marex Financial’s BBB rated balance sheet, our CSC environmental trading and OTC Hedging Solutions teams provide clients with an OTC facility to procure or hedge carbon credits, fuel, and FX on a forward basis, integrated as part of a broader risk management strategy.

Ready to make the pivotal step in your CORSIA procurement? Our trading desk is here with expert assistance to execute your strategy.

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