CORSIA does not switch on all at once. It phases in across more than a decade, and the difference between phases is not cosmetic — it determines who has an obligation, how large it is, and how much notice they get.
Getting the phase structure right is the difference between a compliance plan that works and one that discovers a large unbudgeted obligation eighteen months before it falls due.
The Baseline Period: 2019 to 2020
The baseline is the reference against which emissions growth is measured. It was originally defined as the average of 2019 and 2020 international aviation CO2 emissions.
Then 2020 happened. Traffic collapsed, and averaging a normal year with a catastrophic one would have produced a baseline far below any plausible future level of activity, inflating every subsequent obligation dramatically. The ICAO Council responded by setting the baseline at 2019 emissions alone.
This is worth dwelling on, because it is the clearest evidence available that CORSIA parameters respond to circumstances. Anyone modelling obligations out to 2035 on the assumption that today's settings are permanent is making an assumption the scheme's own history contradicts.
Monitoring, reporting and verification obligations began in 2019, independent of any offsetting requirement. Operators above 10,000 tonnes of annual international CO2 have been reporting since then.
Pilot Phase: 2021 to 2023
The pilot phase applied to operators from States that volunteered to participate. Around eighty States joined at various points.
Two design features defined it:
- Sectoral growth factor only. Each operator's obligation was calculated from sector-wide growth applied to its own emissions, rather than from its individual growth. A carrier that shrank while the sector grew still owed offsets.
- Route-pair coverage. An offsetting obligation arose only where both the origin State and destination State were participating.
In practice the pilot phase generated very small obligations. The 2021 sectoral growth factor was zero, because sector emissions in 2021 remained well below the 2019 baseline. The first meaningful obligations emerged as traffic recovered through 2022 and 2023.
The result was a phase that tested the machinery — monitoring plans, reporting, verification, registry mechanics — without imposing much cost. That was useful, and it also meant many operators built their processes under conditions considerably gentler than the ones now applying.
First Phase: 2024 to 2026
The first phase continues on voluntary State participation, with the same route-pair logic and the same sectoral growth factor basis.
What changed is scale. With traffic above 2019 levels across much of the network, the sectoral growth factor is now materially positive, and offsetting requirements are real numbers rather than rounding.
Three things matter operationally in this phase:
Compliance periods are three years. The 2024–2026 period is a single block. Operators must cancel sufficient units and report by the deadline following the period's end, which gives flexibility but also invites deferral. Deferral is a bet that eligible supply will be available and affordably priced at the end — a bet with poor odds given the corresponding adjustment bottleneck.
Eligible supply is the constraint. Analyses have consistently projected that the volume of units carrying host-State corresponding adjustments will lag behind demand. Operators who treat unit sourcing as a last-quarter procurement exercise are exposed to exactly the squeeze that scarcity produces.
Participation can shift. States have joined and, in at least one case, withdrawn. An operator's route coverage can change between when it plans and when it pays.
Second Phase: 2027 to 2035
This is the structural change.
From 2027, participation becomes mandatory for States meeting defined aviation activity thresholds — broadly, States with a significant share of international aviation activity, measured in revenue tonne kilometres. Exemptions remain for least developed countries, small island developing States, landlocked developing countries and States with very small aviation sectors, unless they volunteer.
The practical effect is that route-pair coverage expands substantially. Routes that generated no obligation during the first phase because one end was non-participating will begin to count.
Two further changes matter:
The individual growth factor enters the calculation. From 2030, the weighting shifts progressively so that an operator's own growth rate contributes to its obligation alongside the sectoral factor. A carrier expanding faster than the sector carries proportionally more. The intent is to remove the free ride that a pure sectoral approach gives to fast growers.
Scale increases. Combined mandatory participation, broader route coverage and continued traffic growth mean obligations in the second phase are expected to be substantially larger than anything seen so far.
What Each Phase Means Commercially
For operators, the phase structure is a runway. The pilot and first phases have been an opportunity to build competent monitoring, establish registry infrastructure, and develop a purchasing strategy under conditions of modest cost. Operators who used that runway are in good shape. Operators who treated it as a paperwork exercise face a sharper learning curve exactly when the numbers get large.
The specific things worth having in place before 2027:
- A monitoring plan that produces reliable data without heroic manual effort each year.
- Registry accounts open and tested — the account opening process is slower than people expect.
- A view on whether to contract forward supply or buy spot, with the price and availability risk of each explicitly considered.
- A model of how second-phase route coverage changes your obligation, run against your actual network.
For sellers, the phase structure is a demand curve. Second-phase demand is the prize, and it arrives on a known date. Working backwards from that: a new project typically needs eighteen months to three years from concept to first issuance, and host-State authorisation is the least predictable element. Developers targeting the second-phase demand peak need to be moving on authorisation now, not when demand appears.
Compliance Periods and Deadlines in Practice
The three-year compliance period sounds generous until you work backwards through the actual sequence.
Emissions for a calendar year are reported and verified by the following spring. ICAO then publishes the growth factors, which is when an operator's obligation for that year becomes a firm number rather than an estimate. Obligations accumulate across the three years of the period, and the total must be discharged by cancelling units and reporting the cancellation by the deadline following the period's close.
The gap between "we know roughly what we owe" and "we must have cancelled" is therefore shorter than the three-year framing suggests, and it lands at the same moment for every operator in the scheme. That synchronisation is the problem. When the entire covered sector reaches its purchasing decision within the same window, thin supply does not stay affordable.
There is also an administrative tail that catches operators out. Registry account opening involves know-your-customer checks and can take weeks. Transfers between registries are not instantaneous. Cancellation and the subsequent report have their own processing time. An operator that has agreed a purchase but not completed the cancellation has not complied.
The sensible pattern is to treat the obligation as accruing annually even though it is settled per period — estimate it each year, acquire progressively, and keep the final period only for reconciliation rather than for the bulk of the purchase.
The Periodic Review
CORSIA includes a review mechanism. The ICAO Assembly periodically reviews the scheme's implementation and can adjust its parameters. Reviews have already produced the baseline change, and further adjustments to growth factor weighting, vintage windows and phase design are possible.
This is not a reason to ignore the scheme. It is a reason to build flexibility into the plan — avoid over-committing to a single vintage, avoid assuming a fixed price path, and revisit the model when Council decisions land.
India's Position Across the Phases
India participates in CORSIA, and Indian carriers on international routes are in scope with the DGCA as national authority. As one of the world's larger and faster-growing aviation markets, India's carriers face a materially increasing obligation as the individual growth factor gains weight from 2030 — growth that is commercially welcome creates a proportionally larger offsetting bill.
For Indian project developers, the second-phase demand ramp is the commercial opportunity, but the corresponding adjustment question interacts with India's own domestic carbon market development in ways that are still resolving. Establishing the authorisation pathway early is the difference between being ready for that demand and watching it pass.
A Practical Timeline Checklist
- Now: Confirm your threshold status and route coverage under current participation. Verify your monitoring plan is producing clean data.
- Now: Open and test registry accounts if you have not.
- This compliance period: Model your 2024–2026 obligation rather than waiting for the number to be handed to you.
- Before 2027: Re-model your obligation under mandatory second-phase participation across your actual network.
- Before 2030: Understand your individual growth factor exposure and how your fleet and network plans affect it.
- Ongoing: Track Council decisions on vintage windows and programme approvals. They change.
Frequently Asked Questions
Is my State participating? ICAO publishes the current participation list. It changes, so check it rather than relying on a saved copy.
What is a compliance period? A three-year block over which offsetting requirements are calculated and against which units are cancelled.
Do I owe offsets if only one end of a route participates? No. Both States must participate for the route to generate an offsetting requirement — though emissions on that route are still monitored and reported.
Does the second phase apply to every State? No. States below the activity thresholds, least developed countries, small island developing States and landlocked developing countries remain exempt unless they volunteer.
When does the individual growth factor start mattering? From 2030, with weight increasing progressively.
Can the phases change again? Yes. The scheme has a periodic review mechanism and has already used it to change the baseline.
Why was the sectoral growth factor zero in 2021? Because sector emissions that year remained below the 2019 baseline, so there was no growth to offset.
Can I carry unused cancelled units into a later compliance period? No. Cancellation discharges the obligation for the period against which it is reported. Over-cancelling does not build a credit balance for future periods, so precision in calculating the requirement has direct financial value.
Ready to act on CORSIA? DSTechnoverse provides specialist CORSIA carbon credit services for aircraft operators, project developers and traders — eligibility screening, offsetting requirement calculation, unit sourcing and due diligence, corresponding adjustment support and registry execution. We are based in Indore, Madhya Pradesh and work with clients across India and internationally.
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