CORSIA's 220-Million-Tonne Gap: Why Insurance Alone Won't Fix the Supply Crisis
Here are the numbers that should keep airline sustainability officers awake at night: IATA projects that airlines will need between 146 and 236 million CORSIA-eligible emission units for the first compliance period covering 2024 through 2026. The current supply of actually eligible credits? About 15.8 million, almost all from Guyana.
That's not a rounding error. That's a market failure in slow motion.
(High estimate)
(Current supply)
(2026 alone)
The Insurance Fix
Verra and Gold Standard recognized that political risk was one of the key barriers preventing credits from qualifying as CORSIA-eligible. The concern was straightforward: what happens if a host country issues a corresponding adjustment for a credit, and then reverses it? Who bears that risk?
Their answer, rolled out in mid-2025, was a political risk insurance framework. Three insurers are now approved: CFC Underwriting, Oka (The Carbon Insurance Company), and Artio Carbon. The idea is that insurance coverage against corresponding adjustment reversal and other political risks would give ICAO and airlines enough confidence to accept more credits as CORSIA-eligible.
It's a smart structural intervention. It addresses a real concern. And by itself, it's not enough.
The Real Bottleneck
Insurance can de-risk credits that already exist. It can't create new credits, speed up methodology approvals, or build institutional capacity in host country Designated National Authorities. The supply constraint isn't primarily about risk transfer. It's about the physical and bureaucratic speed at which eligible credits can be generated, authorized, and transferred.
Think about what needs to happen for a credit to become CORSIA-eligible: a project needs to be developed under an eligible methodology, monitored and verified, registered with an eligible program (Verra VCS, Gold Standard, or one of the other CCP-approved programs), issued with the appropriate vintage, and then authorized with a corresponding adjustment by the host country's DNA. Every step in that chain has lead times measured in months or years, not weeks.
Host country DNAs are the critical choke point. Many developing countries are still building their Article 6 institutional frameworks. They're simultaneously navigating bilateral agreements with multiple buyer countries, setting up national registries, training staff, and developing authorization procedures. Adding CORSIA-eligible credit authorization to that workload doesn't simplify things.
The Price Signal Problem
Current CORSIA credit price projections range from $14 to $34 per tonne, depending on the scenario. That's materially lower than what KliK Foundation is paying for Article 6.2 ITMOs (roughly $40 per tonne) and lower than what many project developers need to justify new investment. Why would a developer prioritize CORSIA-eligible supply when sovereign ITMO buyers are offering better prices?
The pricing mismatch creates a perverse dynamic: the market with the most urgent supply need is offering the least attractive terms. Until CORSIA prices move closer to Article 6.2 benchmark levels, developers will logically prioritize sovereign ITMO contracts over CORSIA-eligible issuance. Insurance doesn't change that math.
What Would Actually Close the Gap
Three things need to happen simultaneously. First, more host country DNAs need to operationalize their authorization procedures for CORSIA-eligible credits. Capacity building programs from UNDP, the World Bank, and bilateral aid agencies need to prioritize this explicitly. Second, CORSIA-eligible credit prices need to rise to a level that competes with alternative demand channels. Market signals suggest this is starting to happen, but slowly. Third, digital MRV systems need to compress the monitoring and verification timeline so that the credit generation pipeline can actually keep up with compliance demand.
That last point is where the opportunity gets interesting for the technology layer. Manual verification processes were designed for a world where a project might generate a few hundred thousand credits over several years. CORSIA needs tens of millions of eligible units per year. The only way to get there is by automating the monitoring and verification pipeline so that credit issuance can happen at a fundamentally different tempo.
SustainCERT's data on dMRV efficiency tells the story: one verification officer can handle 100 to 150 projects annually with manual processes. With digital MRV, that same officer can verify 10 projects per day. That's not a marginal improvement. It's the difference between a supply system that was built for the voluntary market and one that can serve compliance-grade demand.
The Clock Is Running
CORSIA's first compliance period ends in December 2026. Airlines are already accruing offsetting obligations with no clear path to sourcing enough eligible units. The insurance frameworks help at the margins. But the structural fix requires faster host country authorization, better price signals, and technology that can scale credit supply to meet compliance reality. We're running out of time for incremental solutions.