Oka CEO & Founder Chris Slater recently hosted Oka’s webinar, Navigating CORISA. The objective: Equip project developers with the tools they need to prepare for CORSIA amid ongoing uncertainty.

Here, Chris shares the top five takeaways from the panel discussion, which brought together industry experts Hugh Salway (Gold Standard), Anna Hickey (Philip Lee) and Simon Henry (International Emissions Trading Association (IETA)).

1. Secure a corresponding adjustment

“Eligibility requirements have changed between the pilot phase and the first phase, which started at the beginning of this year and runs through to the end of 2026,” explains Hugh. “There were two key requirements then: certification and issuance under a CORSIA-eligible standard; and a vintage requirement. 

“The one key thing that has changed now is that, for credits to be eligible, there has to be an avoidance of double counting between the host country’s nationally determined contribution (NDC) and the airline. The credits have to be authorized for use under Article 6 of the Paris Agreement. The host country has to agree to apply a corresponding adjustment under Article 6.”

2. Engage with your host country

The corresponding adjustment is not a straightforward stamp of approval. “The host country needs to authorize the project and use of credits, as well as applying the corresponding adjustment,” says Simon. “It adds complexity, bringing in that extra stakeholder.” To that end, he encourages developers to “engage with government ministries” today. 

“Some governments are further down the track than others, with the right institutional setup in place to engage with developers… Countries like Ghana (which has a carbon markets office) Thailand, Switzerland, Singapore — these countries provide a good conduit.”

Acknowledging it is a “complicated and challenging” first step, Simon notes that “developments are emerging” that will lower barriers for governments and developers by extension. He points to capacity-building initiatives between multilateral development banks and governments, as well as the IETA-led Climate Action Data Trust: “a common data dictionary or terminology” designed to build market transparency. “There is a playbook being developed,” he tells us. “But it’s going to take time.”

Anna agrees. “A lot of countries are developing capacity [and] putting in carbon markets legislation,” she observes. “So make sure you’re tracking that and adhering to requirements under local law.”

3. Get a letter of authorization

Both Anna and Simon concede that the government-issued Letter of Authorization (LOA) is “a bit of a legal vacuum at present.” Since we’re “right at the beginning of the process,” says Simon, the process is a potential “barrier and challenge.” Tapping into available resources and expertise should smooth your flightpath to authorization.

IETA has rolled out a number of resources, including an LOA tracker and directory. It shows which LOAs have been issued and where, “to help developers, and governments, know where to start, what it should contain, and where it can be obtained.” Simon reveals that IETA is also working with the World Bank on a template LOA that “revolves around a core set of terms.”

Diving into the details, Anna sets out a comprehensive list of considerations for developers. “The LOA should set out the parameters of authorization, such as the project and number of units authorized. It should set out the purpose for which they’re authorized (in particular, that they’re authorized for international mitigation purposes)… and most importantly, when does the first transfer occur? Because that’s the point at which a corresponding adjustment is triggered.”

Having advised a number of developers in a legal capacity, Anna has a number of additional practical recommendations — not least, “that the LOA is issued by the national focal point and that the person issuing it has authority to do so.”

She moreover urges developers to “input into the LOA before it’s issued. Put in a commitment that it is not revocable. Try to put in obligations around timely reporting, because you don’t want a situation in which the government is delaying its reporting, which will potentially lead to difficulty in the standard being able to confirm a corresponding adjustment has been made.” 

4. Back it up with a guarantee

“There’s nothing stopping a government from revoking a commitment to make a corresponding adjustment, or indeed amending an authorization,” warns Anna. “Corresponding adjustments are calculated annually, but it’s only reported every two years in the Biennial Transparency Report (BTR). The risk is that an airline retires a credit that has an LoA and a committed corresponding adjustment, but the corresponding adjustment is not applied.”

Registries are developing guardrails against double claiming. “One of the big questions that we, and the other standards, have had to address is “what happens if a host country doesn’t apply its corresponding adjustment?” says Hugh. “The safeguard that ICAO is looking to put in place is making sure that — rather than just having a letter of authorization from the host country — there is an assurance that credits will be replaced [if a host country doesn’t follow through on its commitment].”

“There are two options under [Gold Standard],” says Hugh. “One is that the project developer provides a guarantee to replace credits… The second is evidence that the risk isn’t there, so the corresponding adjustment has already been applied. This is why the question of insurance really matters when it comes to CORSIA.”

Guarantees, our panelists agree, are a critical feature of CORSIA — and an opportunity to attract airline buyers ahead of the compliance period. “It’s not just adjusted units that can be retired,” Anna adds. “Airlines can also retire a credit that has a combined LOA and approved replacement guarantee to avoid double claiming.” 

5. Don’t put it off

Notwithstanding uncertainty, now is not the time for developers to put off action. The market is moving quickly to meet burgeoning demand, a series of key milestones approaching fast. ICAO is expected to issue formal registry approvals in November — the same month in which the Article 6 rulebook comes under review at COP29. And as the rules consolidate, sellers will converge on CORSIA. 

Developers must get ahead now. “Keep a close eye on Baku [Azerbaijan],” Anna advises. “Keep a close eye on the requirements of the standards and of ICAO. A number of standards, including Gold Standard, have a list of requirements, while ICAO is bringing in requirements for the second phase of CORSIA. Make sure your LOAs meet all these various criteria, because developers could spend a lot of time in negotiations with their government — and you don’t want to find it is ineligible.”

“Finally, engage with insurance providers, because you’ve got to make sure [your project] meets any requirements for insurance under the guarantees.”