Europe signals the way forward for CORSIA

Last Friday, the European Commission published its long-awaited review of the EU Emissions Trading System (ETS), including recommendations for how CORSIA should operate alongside the ETS for flights beyond the bloc. The market, and the Oka team, has been awaiting this announcement since the start of this year. Early reception suggests it could provide a meaningful tailwind for market activity as CORSIA enters its mandatory phase.

First, the details. The European Commission is seeking to fold CORSIA into EU law until 2035. Extra-EEA flights remain subject to CORSIA only in 2027–28; from 2029, the ETS expands on a trial basis to some shorter-haul departures, with a deduction mechanism intended to prevent airlines being charged twice. A 2032 review will determine how the two schemes operate thereafter.

For Oka, the upshot is clarity. With mandatory buying five months away, Europe has removed a major reason for airlines and developers to wait: CORSIA remains the compliance route for extra-EEA aviation, with its role now signalled well into the next decade. That should pull deferred procurement into the market and expand demand for the insurance that enables it.

The CORSIA insurance cycle, closed

Insurance proves itself over a full cycle: you write the risk, the risk matures, and, if the market works as designed, the risk resolves. This quarter, CORSIA insurance completed that cycle for the first time.

In May, Rwanda submitted annexes covering a substantial volume of Oka-insured CORSIA credits, amounting to tens of millions of limit. Through June, we worked with clients and Verra to evidence the completed corresponding adjustments. Having received official registry approval last week, those credits are now off risk. We welcomed the milestone as a validation of our underwriting performance, of course, but more importantly, as a validation of the insurance pathway.

In any mature insurance market, a risk resolved is an even greater measure of assurance than a policy written. In this market, it is among the first commercial-scale demonstrations that the sovereign-risk component of Article 6 carbon trading (which also happens to be the component that makes buyers hesitate and developers wait) can clear cleanly through the system Oka helped design.

Building momentum towards 2027

The rest of the CORSIA machinery kept pace. Demand for our cover this quarter came as much from existing clients returning as from new ones arriving, showing how fast insurance has been adopted as an obvious route to market. GasGreen Asia insured additional multi-million batches of credits from its Uzbekistan methane-reduction programme, SIPCO added further policies, and BioLite, UpEnergy, and Agasco extended insured supply across Rwanda, Nigeria, and Tanzania.

Meanwhile, our CPO Stewart Duncan travelled to Kenya for the CORSIA EEU Supply Action Group meeting, Oka joined the IATA Supporting Alliance for CORSIA Eligible Emissions, and SVP of Growth, Zachary Kane, shared the floor with IATA, Japan Airlines, and major developers at IETA’s Asia Climate Summit in Hong Kong.

With mandatory offsetting imminent and sustainable aviation fuel (SAF) years from commercial viability, airline representatives in Hong Kong argued that CORSIA credits will account for a larger-than-anticipated share of the industry’s decarbonisation targets: a perspective that was backed by large-scale credit retirements in Asia in June.

First transition deals through new doors

In our last newsletter, I shared that we had partnered with Greenlight Innovation Syndicate 3456 to grow our green credit insurance business. This quarter, we began executing on that partnership, placing the first credit deal through the Greenlight-backed MGA in addition to ongoing deals via the syndicate. Bank onboarding is progressing, behind which sits a well-developed pipeline of loans to renewable projects.

Running in parallel, our new binder with New Energy Risk went live, extending Lloyd's-backed capacity into US clean energy tax credit insurance. Carbon remains Oka’s core, but the same specialist underwriting and infrastructure – distribution through Lloyd's, capacity through reinsurance partners, pricing models with ratings agencies - travels well into adjacent transition finance, from where demand is also pulling us.

Driving climate action on the ground

In June, Oka’s Active Underwriter Sima, Stewart, and I travelled to Sierra Leone to visit DelAgua's projects and meet with climate ministers (you can read the full reflection here). These trips are always recalibrating. It is one thing to underwrite a clean cookstove programme from London; it is another to see it working in people's homes. The technical debates matter, but they exist in service of this.

Closer to home, we hosted a London Climate Action Week reception with BURN, bringing together our insurance partners and a cookstove developer to show the impact of lineslip support and the work that developers do. Sima also represented Oka at the Brazilian Insurance Forum, hosted by Marsh at their London office.

Looking ahead

This quarter laid much of the groundwork for what comes next. Europe provided long-awaited clarity on CORSIA. Corresponding adjustments demonstrated that the insurance pathway works in practice. Verra approved the use of insurance within its Durability Pilot: a programme Oka helped bring to market in partnership with CarbonPool. In the coming months, our focus is on converting those signals to action: supporting growing demand across our CORSIA portfolio, extending our underwriting capability into the first Durability Pilot transactions, and expanding our transition finance portfolio as we work to close the climate finance gap.