Two operators with identical obligations and identical quality standards can pay materially different amounts, purely because of when they bought. Timing is the lever most within an operator's control and the one least often decided deliberately.
For what drives the price of a unit, see CORSIA credit pricing. For building the cost forecast, see budgeting and forecasting CORSIA costs. This piece is about when to buy.
The Structural Problem With Waiting
Obligations settle per three-year compliance period. The temptation is to wait until the figure is confirmed, then buy exactly what is needed.
The difficulty is that every operator in the scheme reaches that decision in the same window. Emissions are reported and verified on the same calendar, ICAO publishes growth factors at the same time, and the cancellation deadline is common.
So deferral is not a neutral choice. It is a decision to buy at the moment demand across the entire covered sector peaks, in a market where supply is constrained by government authorisation decisions that do not flex in response to demand.
In a liquid market that would matter little — a buyer who waits pays the market price. In an illiquid one, a buyer who waits may find the available supply for their period already contracted.
What Progressive Acquisition Actually Means
Buying across the compliance period rather than at its end. In practice:
Estimate annually. Model the obligation each year from covered emissions and an estimated growth factor rather than waiting for confirmation.
Buy a conservative portion early. Deliberately below your central forecast, so over-cancellation is unlikely. There is no carry-forward — surplus is spent money.
Reconcile at the end. Reserve the final window for the balance, not the bulk.
The trade-off is explicit: you commit before the final number is confirmed, in exchange for spreading price exposure and not competing with the whole sector at once. For most operators that trade is worth making, because the downside of the alternative is an unmet legal obligation rather than a slightly higher price.
Forward, Spot, or Both
| Spot | Forward | |
|---|---|---|
| What you get | Units that exist now | A contractual claim on future issuance |
| Price | Market at the time | Typically below spot |
| Secures | Price only | Existence as well as price |
| Risk absorbed | Little | Delivery, authorisation, vintage |
| Suits | Confirmed near-term need | Confident volume forecast, longer horizon |
That third row is the one that matters in this market. A forward is usually framed as a price hedge. Here its more valuable property is securing that units will be available at all — which is a different benefit and a larger one when supply is the binding constraint.
The discount a forward carries is compensation for the risks you absorb. Assess it as such rather than treating it as a bargain, and make sure the contract allocates authorisation and vintage risk explicitly.
A Workable Default
For an operator without a strong view, a defensible starting position:
40-60% acquired progressively across the first two years of the compliance period, in tranches, from authorised spot supply.
20-30% contracted forward, where a project with a credible authorisation position is available and the contract carries a long-stop date.
The balance reserved for reconciliation in the final window once the obligation is firm.
Adjust the split by how confident you are in the volume forecast. High confidence supports more forward and more early acquisition; genuine uncertainty argues for keeping more back.
Timing Signals Worth Watching
Growth factor publication. Converts your obligation from a range into a number. Buying before it is buying against an estimate.
Participation list changes. A State joining moves your covered emissions without any change to your operation, and it moves everyone else's too.
Programme approval decisions. A lapse removes supply from the market abruptly.
Vintage window decisions. A window shifting can strand inventory, including yours.
The 2027 boundary. Mandatory second-phase participation steps demand up across the whole sector on a known date. Supply that is ready then will be contracted by operators who moved earlier.
The first four are unpredictable in timing and knowable when they happen — which is an argument for watching them rather than forecasting them. The fifth is fixed and therefore plannable, which is why it is the one worth acting on now.
Timing Around the Administrative Tail
Even a well-timed purchase fails if the mechanics do not complete.
| Step | Allow |
|---|---|
| Registry account opening | 4-8 weeks |
| Due diligence per tranche | 1-3 weeks |
| Contract negotiation | 2-6 weeks |
| Payment and transfer | 1-3 weeks |
| Cancellation | Days, plus processing |
| Report and acknowledgement | 1-2 weeks |
Roughly three to six months for a first cycle. An operator deciding in month thirty-four of a thirty-six-month period has not left time for the process, regardless of whether supply exists.
Common Timing Errors
| Error | Consequence |
|---|---|
| Waiting for a confirmed obligation | Buying alongside the entire sector |
| Buying the full requirement early | Over-cancellation; surplus is spent |
| Treating a forward as a price bet | Missing that it secures availability |
| No long-stop date on a forward | Sovereign risk with no exit |
| Ignoring the administrative tail | Supply secured, delivery too late |
| Concentrating in one vintage | Exposure to a single Council decision |
| Assuming the 2027 step is gradual | It is a step, on a known date |
Timing for Sellers
The mirror image, and worth understanding whichever side you sit on.
Authorised supply sells into a seller's market. Where a developer has secured a corresponding adjustment, they are holding the scarce product and negotiating from strength. The commercial implication is that authorisation is not merely a compliance step — it is the value-creating step, and delaying it delays the price as well as the sale.
Unauthorised supply sells into a buyer's market, at a discount that reflects sovereign risk the buyer is being asked to take. A developer marketing before authorisation is competing on price against supply that carries none of that uncertainty.
Second-phase demand is the visible opportunity. Demand steps up from 2027 on a known date, and a project needs eighteen months to three years to first issuance. A developer aiming at that window has to be moving on authorisation now rather than when demand appears.
Forward agreements de-risk the project financing, which is the seller's real reason for wanting one. That gives a buyer negotiating room on terms in exchange for the certainty the seller values.
Reviewing the Strategy
Timing decisions taken once and never revisited drift out of date, because the inputs move.
Revisit the split when the obligation forecast changes materially, when a growth factor is published, when participation changes affect your covered emissions, when a programme you rely on has an approval change, and annually as a matter of routine.
Record the reasoning each time. A procurement strategy that can be explained — this proportion forward because we were confident in volume, this proportion held back because the second-phase modelling was uncertain — is defensible in a way that an undocumented pattern of purchases is not.
Frequently Asked Questions
Does progressive buying cost more in total? Not systematically. It trades a small amount of volume precision for a large reduction in supply and price risk, and in a market where the downside is an unmet legal obligation that trade usually favours the buyer.
How many tranches is sensible? Enough to average exposure without multiplying transaction cost — for most operators three to five across a compliance period, sized against the diligence effort each requires.
What if our obligation forecast changes mid-period? Adjust the remaining tranches rather than the ones already cancelled. This is precisely why the early portion should sit below the central forecast.
When should we start buying? Once you can model the obligation credibly, which is well before it is confirmed. Waiting for certainty means buying when everyone else does.
How much should we buy early? A conservative portion below your central forecast, because surplus does not carry forward.
Is a forward contract worth it? Where you are confident in volume and the contract allocates authorisation and vintage risk properly, usually yes — it secures availability, not just price.
What if we over-buy? Surplus cancellation is not banked for future periods. It is spent, which is why the early tranche should be conservative.
Should we wait for prices to fall? Supply depends on government authorisation decisions that cannot be forecast, and demand rises on a known schedule. The risk is skewed the other way.
How does the 2027 change affect timing? It steps demand up across the sector on a fixed date. Operators moving before it face a different market from those moving after.
What is the single most common timing mistake? Leaving registry account opening until after a purchase is agreed, which adds four to eight weeks the deadline does not give back.
