The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), launched by the International Civil Aviation Organization (ICAO), plays a major role in helping airlines offset their emissions and meet climate goals.

International air travel is bouncing back after the pandemic. This drives a surge in demand for carbon credits under CORSIA. A new report by Allied Offsets forecasts strong growth in both demand and prices of eligible carbon credits from 2025 through 2035.

This article explores the latest trends, price scenarios, and what this means for airlines, project developers, and the broader voluntary carbon market.

Rising Demand: Airlines Set to Purchase More Credits

Industry estimates say that demand for CORSIA-eligible carbon credits will hit 101 to 148 million tonnes (MtCO₂e) during Phase I (2024–2026). Demand will rise quickly in Phase II (2027–2035).

Cumulative needs are expected to be between 502 and 1,299 MtCO₂e. This will depend on how much international air traffic grows and how CORSIA expands its coverage.

This big increase comes from the rebound in international air travel and the start of Phase II in 2027. During this phase, most ICAO member countries must take part.

By 2035, demand might exceed 1 billion tonnes in high-growth scenarios. That’s about the same as the yearly emissions of a major industrialized country.

To summarize projected cumulative demand:

• Phase I (2024–2026): 101–148 MtCO₂e

• Phase II (2027–2035): 502–1,299 MtCO₂e

This growth presents both challenges and opportunities. Airlines need enough credits to comply with regulations. At the same time, project developers and suppliers face pressure to increase the verified supply of eligible credits.

Price Outlook: A Wide Range with Upward Pressure

The report outlines three price scenarios for carbon credits based on different market dynamics:

1. Low Scenario: Prices start at $14/tonne in a tight supply scenario and grow slowly to $25/tonne in under supply scenario.

2. Medium Scenario: Prices rise from $15/tonne to $29/tonne.

3. High Scenario: Prices climb sharply from $16/tonne to $34/tonne.

Even in the conservative case, prices show modest growth. But in the high-demand scenario, prices could grow over the next decade.

On the other hand, MSCI outlines a range of price scenarios for CORSIA-eligible carbon credits as follows:

• Phase I (2024–2026): $18–$51 per tonne

• Phase II (2027–2035): $27–$91 per tonne (by 2033–2035)

This price rise shows that airlines face more pressure to secure high-quality credits. This is especially true as more projects focus on long-term removal instead of just temporary avoidance.

High prices might lead some airlines to invest in sustainable aviation fuel (SAF) or insets. These options help reduce emissions in their operations.

• RELATED: United Airlines Launches $100 Million Investment Vehicle for SAF

Supply Gaps and Quality Filters

CORSIA doesn’t allow just any carbon credit. ICAO has strict rules for what qualifies — including restrictions on project start dates, crediting periods, and approved methodologies. Only credits from approved programs (like Verra, Gold Standard, and ART TREES) that meet these standards are eligible.

The report estimates that:

• Only about 543 MtCO₂e of eligible credits will be issued by 2027.

Supply is projected to lag behind demand. Reports suggest possible deficits of 12–43 MtCO₂e in Phase I. Phase II may face even larger shortfalls. This is likely if stricter quality filters are used. These filters include co-benefits, permanence, and additionality. The exact numbers for filtered supply aren’t given, but these criteria would greatly lower the usable pool.

Currently, most eligible supply comes from avoided deforestation (REDD+) and renewable energy projects. As demand increases and quality standards get stricter, the market will likely move toward lasting carbon removal solutions. This includes methods like reforestation, biochar, and direct air capture (DAC).

Regional Insights: Where Supply Comes From

The current credit supply under CORSIA is heavily concentrated in a few countries:

• India, China, and Brazil together account for over 50% of the available supply.

Africa has fewer CORSIA-eligible credits now. However, it is expected to grow. This growth will focus on nature-based solutions, such as afforestation and cookstove projects.

This geographic concentration means that any changes in policy, political stability, or project approvals in key countries could disrupt supply. For example, if India were to change its rules on carbon credit exports — as some officials have suggested — global supply could shrink quickly.

Interest is growing in boosting credit generation in Southeast Asia and Latin America. Many areas there have good land for reforestation and carbon farming.

Market Trends and Implications for Airlines

CORSIA credits are part of the larger voluntary carbon market. This market has attracted a lot of interest from companies and governments. According to MSCI report, voluntary carbon markets could reach $250 billion annually by 2050.

But today’s CORSIA credits are selling for far less than the cost of removing CO₂ using high-tech methods like DAC, which can exceed $300 per tonne. This price gap has raised questions about credit quality and how buyers can demonstrate real climate impact.

SEE MORE: CORSIA Credits Soaring Costs: How They Are Reshaping Aviation’s Future

Some key trends include:

• Airlines such as Delta, United, and Lufthansa are now mixing credit purchases with investments in SAF. They also support offsets from reforestation or engineered removals.

• Programs like SBTi (Science-Based Targets initiative) encourage firms to reduce emissions. They also promote high-quality removals instead of bulk offsetting.

For airlines, this means they may need to:

• Budget more for compliance over time

• Diversify carbon offset portfolios

• Communicate clearly about the credibility of their offsets

The Bigger Picture: What Comes Next

The Allied Offsets report shows that corporate buyers, like airlines, play a key role in global carbon markets. Their large, long-term offtake agreements — such as Microsoft’s 18 MtCO₂e deal with Rubicon Carbon — are shaping demand signals for the next decade.

ICAO plans to tighten CORSIA rules in future reviews. This may mean more removals and limits on older avoidance projects. This could further reduce supply and raise prices.

Policymakers can boost support for in-sector measures. This includes increasing SAF production and encouraging new removal technologies.

Airlines face challenges now. They must deal with rising prices, new rules, and increased scrutiny on carbon offsetting. In the long run, using durable carbon removals could change aviation and the climate finance system.

CORSIA is entering a critical phase. Demand is set to rise sharply. Meanwhile, supply is tightening due to stricter quality controls. As the report shows, the window to build a balanced, credible carbon market is narrowing. The next few years will shape the cost and credibility of airline decarbonization for decades to come.

• READ MORE: Verra Launches CORSIA Label Guidance for Aviation Carbon Credits

The post CORSIA Carbon Credit Prices, Demand, and Supply: What the Future Holds appeared first on Carbon Credits.

Disseminated on behalf of SolarBank Corporation

The U.S. House of Representatives proposes rollbacks to key clean energy programs, which raises questions across the sector. Among the targeted provisions are the residential solar tax credit and funding elements of the Inflation Reduction Act (IRA)—a landmark climate package that helped spark record investment in clean energy over the past two years.

The proposal suggests ending the 30% federal residential solar tax credit by the end of 2025. This is nearly 10 years sooner than expected. This policy change could greatly affect companies in the solar industry.

Understanding the Proposed Policy Change

The residential solar tax credit, or Solar Investment Tax Credit (ITC) is Section 25D of the U.S. Tax Code. It lets homeowners claim 30% of the cost of installing solar panels. This credit appears on their federal tax returns.

The credit, part of the Inflation Reduction Act, was to last until 2032. It will start to decrease gradually in 2033. The schedule is below. However, the new proposal aims to terminate this credit by December 31, 2025. 

Experts warn that this sudden change might raise costs for consumers. It could also lower demand for residential solar installations and lead to job losses in the sector. Small solar installation businesses often rely on credit for competitive pricing. This makes them especially vulnerable.

The solar industry has expressed strong opposition to the proposed cuts. Many stakeholders say the tax credit has helped grow residential solar. It creates jobs and promotes energy independence.

The Solar Energy Industries Association says the residential solar market has grown 10x in the last ten years. The tax credit has played a big part in this growth.

The proposal passed the House Ways and Means Committee. However, it still has many hurdles to clear before it can become law. Some lawmakers, including Republicans from areas that benefit from clean energy investments, are worried about the possible negative effects of the cuts.

The final outcome will depend on negotiations in both the House and Senate. 

Policy Uncertainty and Its Limits

For many solar developers, these changes could signal uncertainty and disruption. For SolarBank, a developer focused on community and commercial-scale solar (as opposed to residential solar installations), the path forward remains steady. This is due to careful planning, strategic focus, and a shift in business model that favors long-term sustainability.

The company’s CEO, Dr. Richard Lu, says the company’s business model is largely shielded from this turbulence, saying:

“Over the next several years we are not expecting any major changes or challenges from the potential changes to federal solar tax incentives. Support for our community solar projects comes at a state level, and we only focus on the 22 states that have community solar policy.”

This is a key distinction. SolarBank focuses on commercial, industrial, and community solar projects. Unlike residential solar companies, it benefits from strong state mandates and incentives.

• RELATED: From Waste to Watts: SolarBank and Viridi Intend to Transform a Landfill Into a Solar Powerhouse with Battery Storage

Moreover, the timeline for scaling back federal tax credits for commercial solar systems doesn’t begin until 2028 or 2029. SolarBank has already factored that into its long-term planning. Dr. Lu emphasized this, noting:

“We work with industrial and commercial large-scale solar projects, and not residential. The schedule to reduce tax incentives… has already been included in our operations to mitigate the effect.”

Resilience Through Integration

SolarBank isn’t shaken by the headlines. Instead, it is strengthening its operations. Its resilience comes from a vertically integrated model. This model covers development, construction, and long-term operations and maintenance.

This structure helps the company control costs, speed up deployment, and rely less on uncertain external factors. Dr. Lu stated:

“We have a vertically integrated system… which gives us the capability to manage our costs and simplify our process. This is really where our lean set up is competitive.”

That competitiveness is especially important in a rapidly evolving energy market. AI data centers, electric vehicles, and digital industries are driving high electricity demand.

Data center power use in the U.S. will grow twofold in 2030 due to AI. Meanwhile, traditional energy systems are having a tough time keeping up.

SolarBank sees this mismatch as an opportunity. The company can meet rising energy needs by staying agile and keeping costs in check, that is faster than many big, slower competitors.

Shifting from Build-to-Sell to Build-to-Own

In response to both market evolution and policy unpredictability, SolarBank is also adjusting its core business strategy. Once focused on a build-to-sell model, the company is now emphasizing build-to-own projects.

The CEO noted that this shift aims to create a more stable revenue base, making SolarBank less reliant on one-off transactions and external funding sources. He said:

“This will boost our long-term recurring revenue. It makes it easier to take on new projects with less external funding.”

This change also helps the company hedge against potential federal funding shortfalls. SolarBank can continue to grow by attracting private investment and forming strategic partnerships. This will help, even with solar tax credit challenges.

A recent collaboration with Qcells, involving the use of U.S.-manufactured solar modules, is one example of how the company is preparing for multiple future scenarios. SolarBank has the following project pipeline that will bring significant growth to the company:

• SEE MORE: SolarBank’s $49.5M Qcells Deal Accelerates U.S. Solar Growth – Exclusive Interview with CEO Dr. Richard Lu

A Message for Policymakers

The company is confident in its own path. However, Dr. Lu emphasized the broader value of maintaining federal support for clean energy—especially for community solar and distributed energy systems. He remarked:

“Consistent and long-term support… is not just an investment in clean energy but also in social equity and economic resilience.” 

Community solar programs are especially important for expanding access to renewable energy among low- and moderate-income households, renters, and underserved communities. Without strong policy support, these groups risk being left behind in the clean energy transition.

Dr. Lu added:

“Stable policies and incentives are crucial for planning and investment. By supporting these initiatives, policymakers can drive job creation, foster local economic development, and advance national goals for carbon reduction and climate resilience.”

What’s The Future for Solar?

SolarBank’s calm response shows its strong position, even if the headlines are unsettling. The company is ready to succeed by using state support, seeking private investment, and adjusting its business model. This approach helps it thrive despite federal uncertainty.

Still, the broader industry faces real questions. Will Congress follow through with proposed rollbacks? Can community solar continue to grow if the tax credits vanish? And what does this mean for energy equity in the U.S.?

For now, SolarBank believes that its focus on fundamentals, policy-savvy expansion, and forward-thinking leadership will carry it through.

• READ MORE: SolarBank and CIM Group Announce $100M Financing to Power 97 MW of U.S. Renewable Energy Projects

This report contains forward-looking information. Please refer to the SolarBank press release entitled “SolarBank Announces Third Quarter Results” for details of the information, risks and assumptions.

Disclosure: Owners, members, directors, and employees of carboncredits.com have/may have stock or option positions in any of the companies mentioned: None.

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The post SolarBank Stays Strong as Trump’s Clean Energy Rollbacks Loom appeared first on Carbon Credits.

energyRe, a U.S.-based renewable energy developer, has signed a new renewable energy agreement with Google to support over 600 megawatts of solar and solar-plus-storage projects in South Carolina. Through this agreement, Google will invest in and buy Renewable Energy Credits (RECs) from these projects to reduce its emissions across operations and the global value chain.

Notably, this is the second time Google has partnered with energyRe, and together. Both deals will bring more than 1 gigawatt (GWac) of clean energy to the grid.

Amanda Peterson Corio, Head of Data Center Energy, said,

“Strengthening the grid by deploying more reliable and clean energy is crucial for supporting the digital infrastructure that businesses and individuals depend on. Our collaboration with energyRe will help power our data centers and the broader economic growth of South Carolina.”

energyRe and Google: Powering Progress with Solar and Storage Projects

In October 2024, energyRe signed a 12-year agreement with Google to provide clean energy and Renewable Energy Credits (RECs) from a new 435-megawatt (MWdc) solar project in South Carolina. energyRe will develop, own, and operate the project, which will generate enough electricity to power more than 56,000 homes each year.

Google and energyRe completed the deal through LEAP™—a clean energy procurement platform co-developed by Google and LevelTen Energy. LEAP™ simplifies and speeds up the process of securing renewable energy agreements.

Boosting America’s Clean Energy Footprint

energyRe is a leading independent clean energy company based in the United States. The company focuses on delivering large-scale renewable energy solutions across utility-scale solar, onshore and offshore wind, transmission infrastructure, distributed generation, and battery storage.

With offices in New York, Houston, Indianapolis, and Charleston, energyRe is driving the U.S. energy transition with an emphasis on building robust, regional electric grids that can handle growing clean energy demands.

Its national renewable portfolio includes:

• 1,520 MWdc of contracted solar assets
• 398 MWh of battery storage capacity

These projects can potentially enhance grid reliability, reduce energy costs for consumers, and help cities cut carbon emissions.

Miguel Prado, CEO of energyRe, also commented,

“This agreement is a milestone in energyRe’s mission to develop innovative and impactful clean energy solutions for the future. We’re honored to partner with Google to help advance their ambitious sustainability and decarbonization objectives while delivering dependable, locally sourced clean energy to meet growing energy demands.”

Flexible Clean Energy for All

energyRe offers flexible purchase agreements to meet different customer needs. It provides both bundled energy with Renewable Energy Credits (RECs) and REC-only options. These agreements can be delivered physically or financially nationwide, making it easier for companies like Google to access renewable energy.

With this latest deal, energyRe continues to play a vital role in decarbonizing U.S. cities, supporting transmission-led generation, and creating a resilient, clean energy future.

• LATEST: ENGIE Supercharges 2.4 GW Battery Storage in Texas & California with CBRE Partnership 

Google Stays on Track for Net-Zero by 2030

Google plans to reach net-zero emissions across its operations and value chain by 2030. Its strategy includes reducing emissions where possible and using carbon removal to handle what remains.

In 2023, Google’s total emissions reached 14.3 million tons of CO₂ equivalent—a 13% rise from the previous year. The increase came mostly from higher data center power use and supply chain growth, though the pace of increase slowed.

• SEE MORE: Google Bets Big on Next-Gen Nuclear and Carbon Credits from Superpollutants For a Greener AI

24/7 Carbon-Free Energy

In 2023, Google made solid progress on its clean energy journey. It maintained a global average of 64% carbon-free energy across all its offices and data centers, even as electricity use increased. In fact, 10 of its grid regions reached at least 90% carbon-free energy.

Thus, instead of just matching its annual energy use with clean power, Google wants to use carbon-free electricity every hour, everywhere it operates. That’s why this partnership with energyRe is significant for the tech giant.

These new projects will deliver local clean energy and support South Carolina’s clean energy targets as well.

Additionally, Google also avoids buying older “unbundled” energy certificates that would lower its reported emissions but don’t lead to new clean energy. Instead, it focuses on newer, bundled projects that bring real impact.

Betting on Renewables

Some innovative technologies Google uses to cut down its emissions are: smart solar panels like dragonscale rooftops and solar facades. It also applies machine learning to forecast wind energy and shifts computing tasks based on the carbon levels of local power grids.

Moreover, Google is backing new clean energy tech like next-gen geothermal and carbon removal solutions such as direct air capture and BECCS. It’s also helping improve how clean energy is tracked by supporting time-based certificates that measure real-time clean energy use.

So far, Google has signed contracts for over 7 gigawatts of renewable energy and helped pioneer hourly clean energy tracking, giving the world a better way to measure carbon-free electricity.

All in all, by expanding its partnership with energyRe, Google continues to move closer to its goal of carbon-free energy round the clock. Furthermore, the partnership is a key step in aligning corporate climate action with local clean energy development.

• READ MORE: Google Rides the Wind: First Offshore Wind Deal in Asia Pacific For 24/7 Carbon-Free Energy 

The post Google and energyRe Boost Clean Energy in South Carolina with 600 MW Solar Deal appeared first on Carbon Credits.