On December 12, Verra mentioned in its press release that The United Nations International Civil Aviation Organization (ICAO) has approved using the Verified Carbon Standard (VCS) Program during the first phase (2024–2026) of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).
This decision marks a significant milestone for the emerging CORSIA carbon market. Subsequently, airlines with a vital new source of carbon credits can meet their aviation emissions mitigation mandates.
Additionally, ICAO released an updated Eligible Emissions Units document, outlining specific VCS credit categories and vintages approved for use in CORSIA’s initial phase.
Aviation’s Carbon Footprint Set to Soar by 2050
Air travel has become a major contributor to global carbon emissions. Climate experts predict it will be one of those toughest sectors to decarbonize in the coming decades. North America is expected to remain the top emitter, while Asia’s aviation market, driven by China and India, is projected to grow the fastest. The Asia-Pacific region overall is likely to reduce its gap with North America, solidifying its position as the second-largest emitter.
Statista has presented Bloomberg BNEF data showcasing aviation-related carbon emissions which are set for a sharp rise across all regions over the next 30 years. In 2019, North America generated an estimated 293 million metric tons of CO₂ from aviation, but it can exceed 440 million metric tons by 2050. The Asia-Pacific region trailed at 230 million metric tons in 2019 but is forecasted to reach 418 million metric tons by 2050.
- Globally, aviation emissions could reach nearly 2 billion metric tons by mid-century—almost 2X the pre-pandemic levels of 2019 and nearly 4X the emissions recorded in the 1990s.
Addressing this steep rise will require bold, innovative strategies to decarbonize air travel and mitigate its impact on climate change.
CORSIA’s First Phase: Expanded VCS Eligibility
With this approval, the number of Verified Carbon Units (VCUs) that may become eligible for CORSIA labels will get a significant boost. While most VCUs are covered under this decision, ICAO has excluded specific project types and methodologies.
What’s Included?
Here’s what remains eligible for Agriculture, Forestry, and Other Land Use (AFOLU) projects in REDD+ countries:
- Small-scale projects: Those generating less than 7,000 tCO2e of reductions and removals annually.
- Projects using specific methodologies: These include VM0012, VM0017, VM0021, VM0022, VM0024, VM0026 (and VMD0040), VM0032, VM0033, VM0036, VM0041, and VM0042.
- “Nested” projects: Projects integrated into jurisdictional REDD+ accounting under Scenario 2a or Scenario 3 of Verra’s Jurisdictional and Nested REDD+ (JNR) Framework.
Additionally, Verra’s new REDD methodology (VM0048) has been made eligible for CORSIA’s first phase under these guidelines.
What’s Excluded?
Verra has raised concerns about certain exclusions in CORSIA’s first phase (2024–2026) eligibility rules, highlighting inconsistencies in how they’ve been applied across crediting programs. The organization is actively working with ICAO to address these issues in future eligibility decisions.
So, the key exclusions that are under review are:
1. Cookstove Methodologies
Credits from methodologies AMS-II.G. and VMR006 were excluded from the VCS Program but remain eligible under other programs using similar methods. Verra questions this inconsistency and urges ICAO to reassess these exclusions.
2. Carbon Capture and Storage (CCS)
Methodologies under sectoral scope 16, which includes CCS projects, have been excluded. While ICAO is still evaluating if carbon dioxide removal (CDR) activities meet CORSIA requirements, Verra emphasizes that CCS extends beyond CDR and plays a critical role in limiting global warming. Verra believes CCS projects meet CORSIA criteria and should be fully eligible, particularly in countries with ICAO-approved greenhouse gas programs covering these activities.
3. Certain AFOLU Projects
AFOLU (Agriculture, Forestry and Other Land Uses) projects not “nested” into jurisdictional REDD+ frameworks were excluded despite using advanced methodologies. Verra argues for stronger recognition of these projects’ high-quality accounting, particularly under methodologies like:
- VM0045 Methodology for Improved Forest Management Using Dynamic Matched Baselines from National Forest Inventories
- VCS Methodology VM0047 Afforestation, Reforestation, and Revegetation,
- VCS Methodology VM0048 Reducing Emissions from Deforestation and Forest Degradation.
Furthermore, Verra stresses the importance of fair and consistent eligibility criteria for CORSIA. By addressing these exclusions, ICAO can ensure better access to high-quality carbon credits and support impactful climate action in the aviation sector.
Mandy Rambharos, CEO, Verra noted,
Source: ICAO
Article 6 Authorization and Updates for CORSIA
Verified Carbon Units (VCUs) from 2021 onward must have an “Article 6 Authorized – International Mitigation Purposes” label to qualify for use under CORSIA. This requirement aligns with the Paris Agreement’s mitigation framework. Verra’s Article 6 Label Guidance provides detailed information on these labels, and an updated version, reflecting decisions from COP29, will be released early next year.
Moving on, Verra is also finalizing additional assurance requirements. This will ensure there is no double claiming of mitigation outcomes for VCUs with vintages from 2021. These requirements will soon be published to guide project proponents in meeting the necessary standards.
Next Steps for Verra
Verra plans to release a new CORSIA Label Guidance document in the coming weeks. This document will provide details on several key updates, including:
- The VCS Program’s revised CORSIA eligibility.
- New labels differentiating between the pilot phase (2021–2023) and the first phase (2024–2026).
- Instructions for project proponents to request CORSIA labels for VCUs generated by their projects.
Additionally, the press release highlighted that the Verra Registry has already been updated to show these changes. This means VCUs with CORSIA labels from the pilot phase will be automatically updated to display the new label designations, ensuring consistency with the latest eligibility decisions. These steps aim to streamline the process and enhance clarity for stakeholders as CORSIA’s first phase progresses.
This approach offers more flexibility to airlines to meet CORSIA requirements and supports the global aviation industry’s efforts to carbon neutrality. Moreover, the expanded eligibility is expected to create more demand for VCUs while supporting credible emissions reduction efforts worldwide.
LATEST: Verra Unveils Guidance for ICVCM CCP Label on Carbon Credits
In another scenario, on December 13, Verra published a detailed guide to help project proponents apply the Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles (CCP) label to Verified Carbon Units (VCUs).
Verra mentioned,
The release of ICVCM CCP Label Guidance, v1.0 follows the ICVCM’s recent approvals of the Verified Carbon Standard (VCS) Program (May 2024), VCS Methodology VM0048 Reducing Emissions from Deforestation and Forest Degradation (November 2024), and VCS Methodology VM0047 Afforestation, Reforestation, and Revegetation (December 2024).
Automatic Labeling for Approved Projects
When the ICVCM approves a methodology, projects using it automatically receive the CCP label on their issued VCUs provided they meet all additional criteria. However, there are situations where projects may need to manually request the CCP label.
This includes cases where VCUs were not automatically labeled but still qualify for the label, or when a project updates its methodology to an ICVCM-approved version for past verification periods. To facilitate this process, Verra will launch a digital form for CCP label requests in 2025, accompanied by detailed instructions to guide users through the application process.
Updating to ICVCM-Approved Methodologies
Verra has released two guidance documents to streamline methodology updates:
- Methodology Change and Requantification Procedure, v4.0 allows projects to update their methodology or version for past verification periods.
- Procedure to Change Methodology through a Project Description Deviation, v4.0 helps projects transition to a different methodology or version for current and future monitoring periods.
With these updates, Verra aims to make it easier for projects to meet ICVCM standards, ensuring high-quality carbon credits while supporting global climate action. The new guidance provides the tools needed for projects to align with evolving standards in the voluntary carbon market.
The post Boosting Aviation Carbon Credits: ICAO Greenlights Verra’s VCS Program for CORSIA Carbon Market appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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