Japan Airlines and CORSIA Phase 1: Enforcement, Authorisation and Supply

At a Glance: Where Things Stand

The CORSIA market is short, and on the base case of the Climate Decode assessment deliverable supply of 64.5 Mt, being 43.5 Mt already issued and eligible and about 21 Mt expected before settlement, meets expected demand of 146.1 Mt to 31 January 2028, a shortfall of about 82 Mt, since 22 of 111 host countries have authorised a CORSIA credit and 32 of 126 participating states score as enforcing. The position should ease rather than close in 2027, as more buyers enter in the second half of the year once the 2026 growth factor is published and the European Union settles which credits its airlines may use, and as more credits arrive from countries now finalising their Article 6 frameworks, among them Nigeria, Zambia, Ecuador and Türkiye.

Japan Airlines, whose home state is among those enforcing, has accordingly bought early and across jurisdictional forestry and household cooking, with removals contracted forward, which reflects the weight airlines place on reputation and on the integrity of what they cancel as well as on compliance. Airlines that defer purchasing will meet a pool in which supply and demand rise together, whereas the risk that a host withdraws an authorisation after issuance remains with every credit in it.

Japan Airlines began purchasing and retiring CORSIA-eligible credits in its 2025 financial year and is one of few airlines with confirmed cancellations against the first compliance cycle.¹ Shell retired 180,000 Gold Standard credits on its behalf in March 2026 from cookstove programmes in Malawi and Tanzania, the Climate Decode retirement log records a further 70,100 credits from the Guyana jurisdictional REDD+ programme under ART, retired between May 2025 and April 2026, and in September 2026 the airline signed with Climeworks what both parties describe as the first CORSIA-compliant carbon removal agreement, covering soil carbon and biochar selected against the ICAO eligibility requirements.^2,3,4 Neither party has named the projects, and no removal credit on the Gold Standard, Verra or Isometric registers yet carries both a host-country authorisation and the CORSIA Phase 1 label, such that the agreement is a forward commitment whose delivery depends on authorisation by the host governments concerned and on the programme decisions the ICAO Council takes for 2027–29, Isometric being among the programmes whose eligibility for that period is still to be decided.^3,6

Table 1 · Confirmed CORSIA retirements by airline. Sources: Climate Decode CORSIA assessment, retirement log; Gold Standard; Japan Airlines.

Japan Airlines has spread these purchases across a jurisdictional forest programme and two cookstove programmes on two registries, with removals contracted forward, such that no single integrity concern can compromise its compliance position, and its sustainability lead stated at the IETA Asia Climate Summit in July 2026 that supply and price are the principal CORSIA concerns of the airline, that it has no settled means of judging the quality or the price of the credits it buys, and that carbon credits will play a larger role while sustainable aviation fuel remains scarce.⁵

The CORSIA obligation is set by ICAO and enforced by each participating state, and the Climate Decode readiness scorecard rates 126 states against seven pillars, being participation, registry and reporting, the legal instrument, the cancellation procedure, operator notification, penalties and observed cancellations, each score evidenced to a named national instrument. On that basis 32 states, holding 44% of covered emissions, score as enforcing or committed, whereas 15 states holding 50% of covered emissions, among them the United States, the United Arab Emirates, the United Kingdom and Türkiye, report under the scheme without the instruments to compel cancellation.⁶

Figure 1 · Every participating state sized by its share of the 2024 CORSIA requirement, grouped by region and coloured by enforcement tier; 32 tier 1 states hold 44% of covered emissions and 15 tier 2 states hold 50%. Source: Climate Decode Market Watch, CORSIA scorecard of 126 states, August 2026.

The scorecard for the largest obligations shows where the machinery is missing, the pathway being built at its ends, in participation and reporting, and absent in its middle, in penalties, operator notification and a procedure for cancellation.

Figure 2 · The CORSIA compliance scorecard: seven pillars scored 0 to 3 against a named national instrument, with the demand-weighted score and the number of states at zero on each pillar. Source: Climate Decode Market Watch, August 2026.

Two states have drafted a per-tonne penalty against the CORSIA obligation and 116 have none, and weighting each tier by the share of its obligation likely to be cancelled converts the gross Phase 1 obligation of 203.4 Mt into expected demand of 146.1 Mt, a conversion rate of 71.8%. Japan scores in the first tier with 10.5 Mt of covered emissions, which accounts in large part for the early purchasing by Japan Airlines relative to larger airlines in states of the second tier.

The full Climate Decode CORSIA assessment covers 126 states, 111 supplying countries and price paths to 2035. Briefings are available for airlines, developers and host governments.

A credit is eligible for CORSIA only where the host country has authorised it under Article 6 and will apply a corresponding adjustment, or, for Gold Standard and Verra units, where a programme-approved guarantee stands in place of an adjustment not yet reported in the host’s biennial transparency report.⁷ The Climate Decode assessment counts 43.5 Mt of eligible credits on the registries at 12 October 2026, consistent with the 43.9 Mt that ICAO reported as issued and labelled eligible on 29 September 2026,⁸ of which 24.9 Mt are from Guyana and most of the remainder from cookstove programmes in Rwanda, Cambodia, Laos and Malawi, such that two project types and a small number of host countries account for almost the entire stock available for the first cycle. That stock is likely to shrink, since a spreadsheet error identified by BeZero in October 2026 over-stated Guyana’s 2023 emission reductions, and ART expects to cancel about 3.9 Mt of the 9.1 Mt net 2023 issuance once the corrected volume is verified later this year, which on our base case would reduce Phase 1 supply to about 60.6 Mt and coverage of demand to about 41.5%.⁹

Of the 111 host countries in the assessment, 22 have authorised a CORSIA credit at least once, 29 have signed a bilateral instrument without authorising any and face a first authorisation one to twelve years out, one, being Kenya, has refused a request and set a ceiling, and 18 have no documented pathway, such that Phase 1 supply depends on the hosts at the top of the readiness table below, whereas readiness alone does not predict the volume a host will authorise.

Figure 3 · Host governments ranked on Article 6 readiness out of 21, with the status of each in the supply model and four checks drawn from the model’s own fields. Source: Climate Decode Market Watch, country layer of 111 hosts, August 2026.

Authorisation also moves in both directions, since Kenya has declined requests and capped its exports, Zimbabwe has authorised 1.07 Mt of credits that do not yet meet the eligibility conditions, and of the 70 Mt recorded in national authorisation registers 65,000 t have been transferred between countries, such that the constraint on supply is the certainty of authorisation as much as its volume, and the insurance products covering revocation and failed adjustments have become a constraint in their own right, as Part 2 sets out.⁶

Phase 1 settles on 31 January 2028, and on the base case airlines in enforcing states will compete for 64.5 Mt of deliverable supply against expected demand of 146.1 Mt, the supply comprising the 43.5 Mt already issued and eligible on the registries, about 18 Mt from activities with authorisation in place or in progress that is expected to be issued and labelled within the window, and about 3 Mt of new issuance that passes the authorisation, ceiling and ICAO scope gates.⁶

1. Airlines should purchase early and in tranches rather than at the settlement date, when the pool will be smaller and the price higher.
2. Airlines should diversify across host countries, registries and project types, as Japan Airlines has done, such that no single integrity concern affects the compliance position.
3. Airlines should prefer named projects with authorisation in hand over credits where the seller selects the project, and price insurance into any credit whose corresponding adjustment has not been reported.

Part 2, The CORSIA Credit Market, sets out why authorisation and insurance rather than project supply determine what airlines can purchase, and what a stable market for CORSIA credits requires. The overlap of the EU ETS with CORSIA from 2029 is covered in the 5,000 km line, and the sovereign buyers competing for the same authorised supply in the Article 6 market the EU will buy from.

Climate Decode Platform

The figures in this article come from Climate Decode’s CORSIA assessment and Canopy Market Watch, which track eligible supply, authorisation and price across registries.

Climate Decode · Advisory

CORSIA procurement before January 2028

Climate Decode models obligations, screens authorised and insured supply, and builds multi-year buying strategies for airlines.

Notes

Sources

This article draws on Climate Decode’s CORSIA assessment. Figures are the assessment’s base case and will change as authorisations, sectoral growth factors and cancellations are published.