Airlines Could Face $127 Billion Carbon Bill as CORSIA Credit Shortage Deepens

International airlines are staring down a potential $127 billion carbon compliance bill through 2035, as a widening gap between carbon credit supply and demand threatens to send prices sharply higher under the aviation industry's global offset scheme.

New projections from MSCI Carbon Markets show credit prices under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) could climb to $100 per tonne by 2035, nearly eight times current levels, as reported by the Financial Times. The scheme requires airlines in roughly 130 participating countries to offset international emissions that exceed 85% of their 2019 baseline.

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Supply Shortfall Drives the Numbers

The cost pressure traces back to a persistent bottleneck on the supply side. Credits must come from projects that verifiably reduce or remove emissions, but eligible supply hasn't kept pace with airline demand.

As of April 2026, the International Air Transport Association (IATA) reported that only ten countries had issued CORSIA-eligible emissions units through a formal Letter of Authorization, a thin pipeline for a compliance scheme covering global aviation. That scarcity is the main force pushing MSCI's price forecasts higher heading into CORSIA's second phase, which runs from 2027 through 2035.

Long-Haul Carriers Face the Biggest Bills

The financial exposure isn't spread evenly. Emirates is projected to carry the heaviest individual burden, with costs reaching up to $8 billion under MSCI's tight-supply scenario, close to 20% of its 2025 operating revenue. Under a more favorable supply outlook, that figure could fall to roughly $2 billion, illustrating how much rides on whether new credit supply materializes.

Qatar Airways follows with an estimated $6 billion exposure, and United Airlines at roughly $5 billion. Korean Air, Turkish Airlines, Singapore Airlines, British Airways, Cathay Pacific, and American Airlines round out the list of carriers facing significant credit-purchase obligations, largely reflecting their long-haul route networks.

Brussels Could Add to the Pressure

The cost picture could get more complicated. The European Union is weighing a separate carbon levy on flights departing from within the bloc, a proposal still under consideration in Brussels. If adopted, it would stack on top of CORSIA obligations rather than replace them, adding another layer of cost for carriers already navigating the credit squeeze.

For now, the scale of the shortfall means airlines have limited room to hedge. Fuel costs can be managed through forward contracts and route adjustments. Carbon credits, tied to a small and geographically concentrated pool of eligible projects, are proving harder to secure on demand, leaving carriers exposed to a market still working out how to scale supply to match aviation's growing offset needs.