India’s entry into the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) could create a significant new source of demand for CORSIA carbon credit prices, as India CORSIA obligations add to an already constrained market for eligible units.

The move could generate an additional 140 million tonnes of CO2 in global offsetting requirements between 2027 and 2035, according to a report by consulting firm ICF, potentially reshaping carbon credit demand across the aviation sector.

The report estimates that India’s participation will represent approximately 10% of projected global CORSIA obligations over the period. However, Indian airlines will not bear most of the additional burden.

Foreign carriers operating qualifying international routes connected to India are expected to account for around 65% of the increase, while Indian airlines face estimated obligations of 35 million to 49 million tonnes.

The additional demand comes as airlines struggle to secure sufficient eligible emissions units (EEUs). The International Air Transport Association (IATA) estimated in September that carriers would need 200 million to 250 million units by January 2028, while approximately 72 million units were covered by compatible host-country authorisations as of August.

This imbalance could strengthen prices for credits meeting CORSIA requirements, particularly those carrying the necessary government authorisations. However, scarcity does not guarantee an immediate rally. On October 7, Platts assessed Phase 1 CORSIA credits at $12.75 per tonne. S&P Global also launched separate Phase 2 price assessments on November 2, reflecting the market’s transition into the next compliance period.

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