Carbon off-setting is a crucial part of business compliance these days, especially in the aviation sector. Here’s the word on a new report;
Insurance is emerging as a critical enabler of the global aviation carbon market, as new analysis from carbon market intelligence provider AlliedOffsets and carbon insurance provider Artio reveals that constraints on insurable supply, rather than issuance volumes alone, will define the trajectory of the global aviation offsetting scheme – CORSIA – in its first compliance phase.
The jointly published CORSIA Market Forecast 2026 shows that while the volume of eligible credits has more than doubled in the past year, from around 15 million to over 32 million, the proportion of credits that airlines can realistically access remains significantly constrained. This is due to a combination of host-country authorisation requirements, Article 6 progress, and the availability of insurance to de-risk transactions.
Insurance helps to close the gap
In total, the analysis finds that up to 154 million credits could be issued and authorised in time for the first phase of CORSIA. However, only a portion of this supply is expected to be accessible in practice. Insurance has already begun to play a key role in bridging this gap, with the potential to unlock a further 64 million credits by making projects eligible through insured Letters of Authorisation.
Despite this, current insurance capacity remains insufficient to fully meet projected demand. In scenarios where the market is forced to rely primarily on insurance-backed supply, available volumes could fall to around 90 million credits by late 2027, creating a significant supply-demand imbalance.
Prices set to rise as supply tightens
This tightening dynamic is expected to have a material impact on pricing. The analysis suggests that CORSIA credit prices could range from approximately $8 to $32 under scenarios where sufficient supply is unlocked through both insurance and corresponding adjustments. However, in more constrained scenarios where insurance capacity is the limiting factor, prices could rise sharply, reaching $34-$50 per credit.
The report also highlights a growing concentration of supply, with more than 80% of projected credits expected to originate from a small number of countries, including Ghana, Guyana, Ethiopia, India and Malawi. This concentration introduces additional geopolitical and policy risk, further reinforcing the importance of robust risk assessment and insurance frameworks.
Fundile Maphanga, Policy Lead at AlliedOffsets, commented: “We’re seeing a growing gap between projected supply and accessible CORSIA First Phase supply. Whilst issuances have increased significantly, multiple layers of eligibility and delivery risk mean that only a limited amount of credits are likely to be available in reality. This is where reliable data on supply, demand and prices becomes essential for airlines, investors and policymakers.”
Bilal Hussain, CEO and Co-Founder at Artio, said: “For CORSIA to be a success, the focus must shift from theoretical supply to what can actually reach the market. That means scaling insurance capacity, improving the quality and consistency of authorisations and giving buyers confidence in delivery. Insurance plays a critical role in this, helping turn eligible projects into investable, usable credits.”
Outlook for compliance phase
The findings come as airlines prepare for the first compliance phase of CORSIA, with access to eligible credits remaining uncertain and enforcement mechanisms beginning to take shape across key jurisdictions.
The report concludes that while insurance is already accelerating the availability of CORSIA supply, further growth in insurance capacity, alongside clearer policy frameworks and stronger host country engagement, will be essential to enable the market to scale effectively.
Read the analysis in full here: https://alliedoffsets.com/reports/
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