The global aviation carbon market is rapidly tightening as Phase 1 of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is now projected to deliver around 154 million eligible carbon credits by the 2028 compliance deadline; a dramatic leap from earlier expectations that supply would remain critically constrained.

The forecast, produced by AlliedOffsets in collaboration with Artio, signals that the long-anticipated CORSIA market is finally moving from policy theory into a high-stakes compliance arena.

For airlines, however, the headline number masks a more uncomfortable reality: not all credits will be easily accessible.

While issuance of CORSIA-eligible credits has reportedly doubled to more than 32 million units, access to those credits remains heavily dependent on Letters of Authorisation (LoAs) and corresponding adjustments under Article 6 of the Paris Agreement. Without these authorisations from host governments, airlines cannot use the credits for compliance.

That is where insurance markets are beginning to play an outsized role.

According to the analysis, insurance-backed mechanisms could unlock as many as 64 million additional credits, helping developers and buyers manage political and delivery risks surrounding corresponding adjustments. Yet insurance capacity itself may become the next bottleneck, potentially capping practical market supply at around 90 million credits by late 2027.

The result is a growing mismatch between projected supply and anticipated airline demand.

Industry forecasts cited by IATA place Phase 1 demand between 146 million and 237 million credits, far above early supply estimates that once ranged between just 15 million and 32 million units. That imbalance is already reverberating through carbon markets.

Prices for Phase 1 eligible credits have climbed sharply from roughly $11 per tonne of CO2 equivalent to above $20/tCO2e, with some market forecasts projecting prices could surge to between $25 and $51 per tonne before the end of the first compliance cycle.

The pressure is being intensified by strict eligibility rules.

Only six crediting standards have been approved under Phase 1, including programs under the American Carbon Registry (ACR), Architecture for REDD+ Transactions (ART), Climate Action Reserve (CAR), Global Carbon Council (GCC), Gold Standard, and Verra’s VCS. At the same time, CORSIA has excluded several large-scale project categories, including major renewable energy projects above 15 MW and large REDD+ projects exceeding annual issuance thresholds.

These restrictions are narrowing the pipeline of immediately usable credits just as aviation emissions continue rebounding toward, and in some regions beyond, pre-pandemic levels.

Phase 1 of CORSIA covers emissions generated between 2024 and 2026, with compliance obligations due by January 31, 2028. Participation remains voluntary for roughly 126 countries, but the scheme has already become one of the most influential demand drivers in international carbon markets.

The emerging scramble for eligible supply is also reshaping the broader voluntary carbon market. Developers are increasingly prioritising projects capable of securing corresponding adjustments, while governments are becoming more strategic about which credits they authorise for export. For Africa, the implications could be significant. Countries with strong Article 6 frameworks and high-integrity project pipelines may find themselves at the center of a rapidly expanding aviation carbon economy. But delays in authorisation systems, registry infrastructure, or policy clarity could lock many projects out of one of the world’s fastest-growing compliance-linked carbon markets. With less than two years before the compliance deadline, the message from the market is becoming increasingly clear: CORSIA Phase 1 may no longer be defined by whether enough credits exist, but by who can actually access them in time.