The International Air Transport Association (IATA), alongside a broad coalition of airline industry associations and carbon market stakeholders, is issuing an urgent appeal to governments worldwide to address the critically limited supply of carbon credits required for airlines to comply with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
The signatories are specifically calling for the swift issuance of Letters of Authorization (LoAs). These official documents are the key mechanism needed to unlock and release CORSIA Eligible Emissions Units (EEUs) for purchase by airlines.
The Critical Role of Letters of Authorization (LoAs)
CORSIA is a cornerstone of international aviation’s climate strategy, enabling airlines to mitigate their environmental impact by channeling vital climate finance to verified emissions reduction projects in other sectors, particularly in developing nations.
Timely issuance of LoAs is essential for:
Creating a Robust Market: Establishing a transparent and functional market for CORSIA EEUs.
Ensuring Success: Facilitating the effective implementation and environmental integrity of CORSIA.
Unlocking Climate Finance: Ensuring project developers receive the funding needed for both environmental and socio-economic progress.
“CORSIA is indispensable to aviation’s global climate strategy,” said Yue Huang, IATA’s Assistant Director of Climate Policy, at a recent ICAO Skytalks session. “To unlock its climate finance potential and ensure its contribution to aviation’s decarbonization, states must authorize the release of EEUs. This is a top message to the 193 member states at the ICAO Assembly.”
This sentiment was echoed by Adefunke Adeyemi, Secretary-General of the African Civil Aviation Commission (AFCAC), who expressed Africa’s full support, stating, “Unlocking access to CORSIA-eligible units and attracting climate finance… is about ensuring that our economies and operators benefit fairly from the transition to a low-carbon future.”
The Looming Supply Crisis
Under Article 6 of the Paris Agreement, LoAs authorize the use of carbon credits—known as Internationally Transferred Mitigation Outcomes (ITMOs)—for CORSIA compliance. They legally require the host country to apply a “corresponding adjustment” to its own Nationally Determined Contribution (NDC), confirming that the emissions reduction is counted only once for CORSIA.
Without these LoAs, airlines face a crippling shortage of eligible units, putting the future of CORSIA in jeopardy and simultaneously depriving project developers of essential climate finance.
The Demand-Supply Gap is Severe:
Forecasted Demand (2024–2026): Airlines are projected to require between 146 and 236 million EEUs.
Current Available Supply: The supply of CORSIA-eligible units remains extremely limited, currently totaling only 15.8 million credits made available by Guyana.
IATA is actively assisting states with this critical process, having published guidance documents and offering practical tools and workshops to facilitate the swift issuance of LoAs.
Joint Statement Signatories
The joint statement calling for immediate government action is supported by a broad coalition across the aviation and carbon markets:
Airline Industry Associations:
International Air Transport Association (IATA)
African Airlines Association
Air Transport Action Group
Airlines Association of Southern Africa
Airlines for America
Airlines for Europe
Airlines International Representation in Europe
Arab Air Carriers’ Organization
Association of Asia Pacific Airlines
European Regions Airline Association
Latin American and Caribbean Air Transport Association
National Airlines Council of Canada
Carbon Market Stakeholders:
International Emissions Trading Association
Global Carbon Council
Project Developers:
Burnstoves
Hestian
Iceberg
Koko Networks
Korea Carbon Management
Sistema.bio
UpEnergy
Valor Carbon
WeAct
