CORSIA Hits Indian Aviation in 2027: A Carbon Credit Buyer's Guide for Airlines
From 1 January 2027, Indian carriers on international routes stop being spectators in the global carbon market and become buyers. India sat out CORSIA's pilot phase (2021–2023) and its first phase (2024–2026), but the scheme's second phase is mandatory and India has confirmed it will participate from 2027. For sustainability and procurement leads at Indian airlines and aviation groups, this is the first hard obligation to buy and cancel carbon credits — and the units that qualify are a narrow, contested subset of the market.
Aviation sits outside CCTS — but not outside carbon pricing
India's Carbon Credit Trading Scheme covers nine notified sectors: aluminium, cement, chlor-alkali, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery and textiles. Aviation is not among them. Airlines that read the CCTS notifications and conclude they have no compliance exposure are simply looking at the wrong instrument.
The binding mechanism for Indian aviation is CORSIA, run by ICAO. Its second phase runs from 2027 to 2035 across three compliance cycles — 2027–2029, 2030–2032 and 2033–2035 — and participation is mandatory for member states above the exemption thresholds. India, one of the world's largest aviation markets, is firmly inside.
How the offsetting bill is actually calculated
CORSIA does not charge for total emissions. It charges for growth above a baseline set at 85% of 2019 international CO2 emissions on covered routes. Each operator's obligation is its covered international emissions multiplied by a Sector Growth Factor (SGF) that ICAO publishes for the sector as a whole.
ICAO released the first ever SGF in late 2025, for compliance year 2024: 0.15948, or roughly 15.95%. Applied mechanically, an operator with 1 million tonnes of covered international CO2 at a similar growth factor would owe around 160,000 units for that year. At a modelled unit price band of USD 25–60, that is USD 4–9.6 million in a single compliance year, before any fuel or fleet measure reduces the underlying emissions. The factor for 2027 onwards will differ; the structure will not. Our guide to how carbon credit prices are set explains what moves that band.
Only CORSIA Eligible Emissions Units count — and they are scarce
A generic credit retired on a voluntary registry does not satisfy CORSIA. Units must come from a programme assessed by ICAO's Technical Advisory Body (TAB), and must carry host-country authorisation with a corresponding adjustment so the reduction is not double-counted against that country's national target. For the 2027–2029 compliance cycle, TAB has recommended four programmes as eligible suppliers:
American Carbon Registry (ACR)
Architecture for REDD+ Transactions (ART)
Gold Standard
Verified Carbon Standard (VCS)
Supply is the constraint. Against a first-phase requirement analysts put at roughly 200 million units by the 31 January 2028 cancellation deadline, only about 41 million units have so far been verified, issued and labelled eligible. Phase 2 demand stacks on top of that shortfall. If you are weighing registries, start with our comparison of Verra and Gold Standard, then apply the same integrity tests we set out for high-integrity credits and the CCP label. Airlines waiting for a liquid market will be bidding into one that is already short.
Why Indian projects are unlikely to supply Indian airlines
This is the part most Indian aviation teams miss. A corresponding adjustment requires the host government to authorise the transfer. India's National Designated Authority has kept the list of activities approved for Article 6.2 trading deliberately narrow, weighted towards emerging technologies such as ocean energy rather than the renewable energy and forestry projects that dominate domestic credit supply.
In practice that means Indian carriers will be buying imported, authorised units in hard currency from a small pool of host countries willing to issue letters of authorisation. Treasury, FX exposure and multi-year offtake belong in this conversation — not just the sustainability function.
What to put in motion over the next two quarters
DGCA's monitoring, reporting and verification layer applies well before any purchase does:
Confirm your threshold. Operators exceeding 10,000 tonnes of CO2 from international operations fall into MRV. At 50,000 tonnes or more on offset-covered flights, the Fuel Use Monitoring Method is mandatory.
Get audit-ready. Have the emissions monitoring plan and underlying fuel data in a state a verification body accredited by NABCB can sign off without rework.
Track the reporting expansion. DGCA is moving to require reporting that covers at least 90% of annual carbon emissions from international operations at Indian airports.
Model 2027–2029 exposure. Run the USD 25–60 band against your covered emissions and decide now whether to contract forward or buy spot.
Net off the SAF roadmap. India has signalled 1% sustainable aviation fuel blending for international flights from 2027, 2% in 2028 and 5% by 2030. Every litre blended is a tonne you do not have to offset.
Separate compliance from voluntary claims. A unit cancelled for CORSIA cannot also underwrite a corporate net-zero claim. Our seven-step retirement guide sets out the documentation trail auditors expect.
Start building the position now, not in 2027
CORSIA is a procurement problem with a regulatory deadline attached, and in a short market the cheapest compliant units go first. Csquare helps Indian companies source, screen and retire credits, including verified carbon credit supply and the evidence pack that survives assurance. Talk to our team about building your 2027 CORSIA position.
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