Airlines have treated carbon credits like a climate accounting line for years. Under Corsia, that line is starting to look like a real cost of flying.
The airline industry has a new problem sitting behind the price of a long-haul ticket: there may not be enough eligible carbon credits to go around. The Financial Times reported on June 28 that airlines could face as much as $127 billion in extra costs through 2035 under Corsia, the international aviation emissions scheme, if credit supply stays tight and demand keeps rising.
That figure comes from MSCI Carbon Markets, according to the FT, and it should get your attention because it puts carbon credits in the same conversation as fuel, labor and aircraft leases. This isn’t a glossy sustainability claim. It’s a bill. MSCI estimates that eligible credit prices could rise nearly eightfold to $100 per tonne by 2035, as carriers are pushed to offset emissions above Corsia’s baseline while the supply of approved projects remains limited.
Emirates is the bluntest example. The FT reported that MSCI’s tight-supply scenario would put the Dubai carrier’s total Corsia cost at up to $8 billion over the life of the scheme, equal to about a fifth of its 2025 operating revenue. Qatar Airways could face as much as $6 billion, while United Airlines could face roughly $5 billion. If you run a long-haul network, you don’t get to shrug this off as a rounding error.
Corsia is run through the International Civil Aviation Organization, and IATA’s own Corsia guidance says 130 states were participating as of January 1, 2026. The scheme uses 85% of 2019 emissions as the baseline from 2024 until 2035, according to IATA, after ICAO changed the design following the collapse in travel during the pandemic. Airlines with annual international emissions above 10,000 tonnes of CO2 have had to report emissions since 2019, and offsetting requirements are settled across compliance periods.
The timetable is important. From 2021 through 2026, offsetting applies only to flights between participating states. From 2027, IATA says all international flights are covered, with exemptions for least developed countries, small island developing states, landlocked developing countries and smaller aviation markets unless they opt in. That turns a partial system into something much closer to a global cost base.
The supply side is the awkward bit. IATA says the ICAO Council approves eligible emissions units based on environmental criteria, and that can include projects such as renewable energy, clean cooking, methane capture and forestry. The whole point is to avoid cheap credits that don’t hold up. But integrity narrows the pool. As of April 2026, IATA said only ten countries had supplied Corsia eligible emissions units through a Letter of Authorization. Frankly, that is a thin pipe for a global industry.
You can see why airlines are nervous. A carrier can hedge jet fuel. It can delay deliveries, trim capacity or push fares higher when demand allows. It can’t manufacture approved carbon credits on command, and it can’t easily swap a long-haul widebody network for something cleaner before the next compliance cycle. Carbon markets move slowly until they don’t.
This could show up in fares
The timing is poor. The Guardian reported earlier in June that IATA expected global airline profits in 2026 to fall to $23 billion after a jet fuel shock linked to the war with Iran, with the industry’s fuel bill rising by $100 billion. Dow Jones also reported IATA’s view that fuel would reach $351 billion, or 31.4% of operating costs, while the industry’s net margin would fall to 2.0%.
A $127 billion Corsia bill spread over years is not the same as a one-year fuel spike. But airlines don’t price one cost at a time. If fuel is already taking nearly a third of operating costs and carbon credits become scarcer, the pressure lands in the same place: route economics. Long-haul flights, especially those over multiple jurisdictions, become harder to price unless carriers can pass more of the cost to passengers.
That doesn’t mean every ticket suddenly jumps by a clean carbon surcharge. Airline pricing is messier than that. Business travelers, peak-season leisure routes and hub-to-hub international flights are usually better places to recover costs than a bargain short-haul fare. The real risk is subtler: marginal routes get thinner, carbon costs become part of network planning, and investors start treating offset exposure as something closer to fuel exposure.
There will be winners. If Corsia eligible credits become scarce, developers of approved projects gain pricing power. So do firms that can verify, structure and finance credible supply. Sustainable aviation fuel suppliers also benefit if airlines decide that paying more for lower lifecycle emissions is less painful than buying increasingly expensive credits later. IATA says sustainable aviation fuel is one of the in-sector measures needed for aviation’s net zero goal, but current supply remains small. The Guardian reported in December that IATA saw SAF at just 0.6% of global jet fuel consumption in 2025, with 0.8% forecast for 2026.
Here’s the thing: carbon markets only look soft when the obligation is voluntary. Corsia is making the obligation harder, broader and more expensive. You can argue about whether offsets are the best way to clean up aviation, and many people do. But airlines don’t have the luxury of waiting for that argument to settle. If MSCI’s tight-supply case is even close, carbon credits are no longer an ESG footnote. They’re becoming an input cost, and input costs eventually find their way into margins, routes and the price you pay to fly.
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