EU delays Corsia implementing act to 1Q27

Market: Emissions
01/10/26

The European Commission has delayed adoption of its secondary legislation that will set out eligibility criteria for the use of carbon credits for compliance by EU-based aircraft operators under the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) to the first quarter of 2027.

"The commission expects to publish the draft implementing act for public feedback in the fourth quarter of 2026, and plans the adoption for the first quarter of 2027," a commission official told Argus. This is "well ahead" of the compliance deadline for Corsia Phase 1 (CP1) which is 31 January 2028, they added. The new timeline has now been reflected on the commission's website.

The directorate-general for climate action is currently drafting the implementing act and was earlier planning for adoption by the end of the year. The draft act has to undergo a four-week public consultation period.

Officials may need a few additional months to assess feedback from the consultation once it has closed. Member state experts would then have an unspecified period to give input informally to the commission. And once the commission formally proposes the implementing act, member states and the European Parliament have two months to either approve or object the proposal.

European airlines tentatively started advancing their procurement strategies after the commission's EU emissions trading system review proposal in mid-July brought more clarity on the intent to continue to recognise and implement the scheme in the bloc.

But end-users have abstained from taking firm positions on Corsia, as they await confirmation on the implementing act for the eligibility criteria.

The commission will not pursue stringent additional criteria which had previously floated on CP1-eligible credits. In April, the commission proposed imposing requirements that would have excluded nearly all existing supply under CP1 — credits from projects using high-forest, low-deforestation methodologies and from activities that calculate the baseline fraction of non-renewable biomass above the adopted Clean Development Mechanism values.

But after pushback from market stakeholders, the commission agreed to scrap the requirements for CP1, as a "gesture of goodwill" to feedback from industry. That said, the climate change committee has maintained its suggestion for CP2, which runs over 2027-35, to restrict EU-eligible supply to credits issued under the Paris Agreement Crediting Mechanism.

By Alexandra Luca

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

02/10/26

Air, sea sustainable fuel tipping points still far off

Strong global policy is needed to change sustainable shipping fuel economics, writes Michael Ball Washington, 2 October (Argus) — Significant work remains to transition the world away from fossil fuel in aviation and shipping, despite repeated support pledged at UN climate talks. The need to ramp up the use of alternative fuels will be a focus of the UN's Cop 31 climate summit next month in Antalya, Turkey. The host wants countries to join a new pledge to boost electricity to 35pc of all global final energy consumption by 2035, up from about 20pc currently. Last year's host, Brazil, has its own initiative to quadruple global output and use of sustainable fuels, including biofuels, by 2035. And past Cops have produced other pledges to reduce emissions in aviation or shipping. But alternative fuels have not yet reached their tipping point, accounting for less than 1pc of the fuel used in aviation or shipping globally. Cost and politics remain two of the major roadblocks. The sustainable aviation fuel (SAF) industry has shown signs of growth. Major fuel users, including Delta Airlines and FedEx, have recently extended and expanded SAF offtake agreements . And production is on the rise. For example, Neste, the leading producer of SAF, currently has production capacity of 1.5mn t/yr, which it plans to grow to 2.2mn t/yr in 2027, or about 750mn USG. But SAF still makes up a small, but growing, sliver of fuel use. Suppliers in the EU blended nearly 3pc into jet fuel last year , surpassing the bloc's 2pc mandate in its first year. In the US, SAF accounts for roughly 1pc of jet fuel supply, although the US EIA expects that to soon reach about 2pc. Global production this year is set to exceed 790mn USG, up by 26pc on the year, according to the International Air Transport Association. The story is similar in shipping. Globally, ships of at least 5,000 gross tonnage used more than 223mn t of fuel oil in 2024, about 92.5pc of which came from heavy fuel oil, light fuel oil or diesel, according to International Maritime Organization (IMO) data. Only about 0.8pc came from "other" fuels, despite biofuels jumping to more than 1.2mn t from less than 400,000t in 2023. But the slow pace of fleet turnover, and the need for more engines that can use alternatives, means that the course the industry plots over the next few years could determine whether it can meet the IMO's goal of net zero emissions by 2050, according to a recent report from the Global Centre for Maritime Decarbonisation (GCMD). Cost calculations Cost remains a major hurdle to greater SAF use in aviation and shipping. SAF can reduce emissions under the International Civil Aviation Organisation's Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) system, which seeks to offset any growth in aviation CO2 above 85pc of 2019 levels. But using Corsia carbon offsets currently costs significantly less. Argus assessed Corsia phase 1 credits at $12.45/t this week, compared with an abatement cost as high as $310/t for the US west coast. In other parts of the world , the cost of abating 1t of CO2 equivalent in emissions by using SAF instead of jet fuel is even higher. In shipping, GCMD says strong global policy is needed to change the economics of sustainable fuels, as national and sub-national efforts will fall short. At the top of the list is the IMO-proposed carbon pricing system, the adoption of which was delayed last year in the face of US opposition. IMO pledged to try again this year. The agency will meet next month to consider next steps toward achieving its greenhouse gas emissions goals. "Achieving a price signal of this magnitude will be challenging, but without it, the economics are unlikely to support the transition to new fuels at scale," the GCMD said. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Find out more

News

Oil, gas industry can deliver more emission cuts: OGCI

01/10/26

News

01/10/26

Oil, gas industry can deliver more emission cuts: OGCI

Edinburgh, 1 October (Argus) — Major oil and gas companies meeting their 2025 carbon and methane intensity targets shows the wider industry can deliver further emissions reductions from operated assets, although financial and geopolitical obstacles remain, the industry-led Oil and Gas Climate Initiative (OGCI) said today. The 12 OGCI members reduced their average upstream carbon intensity from operated assets to 16.5kg of CO2 equivalent per barrel of oil equivalent (CO₂e/boe) in 2025, from 17.2kg CO2e/boe in 2024. The group's voluntary target was to reach or be below 17kg CO2e/boe last year. Their collective upstream methane intensity was 0.13pc in 2025, compared with 0.12pc a year earlier, meeting their ambition to stay below 0.20pc. Methane intensity is calculated as emissions from operated upstream assets as a share of marketed gas. OGCI members comprise state-controlled Saudi Aramco, BP, Chevron, China's CNPC, Italy's Eni, Norway's Equinor, ExxonMobil, US firm Occidental, Brazil's Petrobras, Spain's Repsol, Shell and TotalEnergies. The members' total operated scope 1 emissions, including from downstream operations, fell to 542mn t of CO2e in 2025, from 545mn t a year earlier and 709mn t in the 2017 base year. Their upstream methane emissions fell to 760,000t in 2025 from 1.95mn t in 2017. Operated oil and gas production from the 12 companies rose by 3pc on the year to 43.4mn boe/d in 2025, equivalent to around 24pc of global output. But their operated upstream assets accounted for only 1pc of methane emissions from global oil and gas operations, according to OGCI. "We continue to believe that flaring can come down for the OGCI members and the industry at large," OGCI executive committee chairman Bjorn Otto Sverdrup said. The biggest opportunity for OGCI members to reduce flaring further is through their non-operated joint ventures and partnerships, he said. The firms reduced upstream gas flaring by 62pc from 2017 levels to 9.2bn m³ in 2025. Routine flaring fell by 74pc from its 2018 baseline to 1.45bn m³. The companies are showing that methane emissions can be reduced across oil and gas assets globally, OGCI managing director Julien Perez said. OGCI also acts as the secretariat of the Oil and Gas Decarbonization Charter (OGDC), giving it direct links to national oil companies (NOCs) in emerging economies. A total of 56 oil and gas companies have signed the charter since its launch at the UN Cop 28 climate summit in 2023. Awareness of methane leaks is essential to fixing them, and so access to data, measurements and detection technologies including satellites and drones is crucial, Perez said. OGCI is helping companies outside the initiative by using aircraft to assess leaks, supported by data from non-profit organisation Carbon Mapper, as well as providing advice. Financing constraints, geopolitical pressure Many methane leaks can often be reduced without mobilising large sums of capital, but in some cases it requires substantial spending, Perez said. The operating environment and the regulatory landscape vary from country to country, and for some NOCs, allocating capital to reducing methane leaks is not easy, he said, pointing out that the cost of debt is much higher for firms in developing countries. "It is a long process, and they need finance and raise debt," Perez said. OGCI is working closely with the World Bank's Global Flaring and Methane Reduction Partnership fund to lower financing costs for these companies. But geopolitical and sanctions restrictions prevent OGCI from working in some countries where methane leaks are known to be substantial, according to Perez. The UN has more capacity to address the potential for emissions reductions in those countries, Perez said. "The geopolitical context has been challenging with the Ukraine crisis and now the crisis in the Middle East, but the message from the CEOs [in the OGCI] is to stay the course" on reducing emissions and flaring, Perez said. The Middle East conflict is particularly challenging for Gulf oil and gas companies, "but we have not seen changes in their desire to maintain a clear focus on the goals they have set", he said. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

News

EU warns against ETS price controls

01/10/26

News

01/10/26

EU warns against ETS price controls

Brussels, 1 October (Argus) — Brussels has warned that proposed changes to carbon-market intervention rules could weaken the EU emissions trading system (ETS) and has criticised broader free allocation exemptions in the European Parliament's draft reform package, but the European Commission has broadly welcomed German centre-right EPP lawmaker Peter Liese's draft report ahead of internal parliamentary negotiations. The proposed changes to the excessive price fluctuation mechanism under Article 29a of the ETS directive would ultimately weaken the bloc's carbon market, a senior commission official told the European Parliament's environment committee today. "Trying to engineer a carbon price through frequent market intervention will lead to less cost effectiveness and will reduce market and investment predictability. It will ultimately weaken our well-designed ETS system," said Rosalinde van der Vlies, director for carbon markets and clean mobility at the commission's climate directorate. Van der Vlies also criticised Liese's proposal to broaden exemptions from conditionality requirements for free ETS allocations granted to installations among the 40pc most efficient facilities in a sector or sub-sector. "We want to stop being in the business of handing out free lunches," she said, while acknowledging Liese's "very solid report" and his efforts to build a majority in the parliamentary committee. While Liese's draft proposal "may not be perfect", he said he was open to ideas to improve it. "But we need to work fast," he said. EU states are eyeing agreements on their position on ETS reform for a meeting of climate and environment ministers on 11 December. A key priority for Liese is ensuring member states make more effective use of ETS revenues. "Too much of their money has not been used efficiently enough," he said. On aviation, Liese said including flights to the US and Asia within the ETS could have triggered "serious" reactions from third countries. "The 5,000km approach improves environmental integrity while being fairer to European hubs and tourist regions. But the devil is still in the details," he said. On maritime transport, Liese said the commission had proposed a sound approach. "We are looking at improvements, particularly to protect European ports against evasion," he said. On waste, Liese noted parliament has repeatedly called for waste incineration to be included in the ETS, but said a 2028 start date would be too early. "The commission's gradual approach towards 2034 is more pragmatic," he said, adding that member states should use the intervening period to prevent waste being diverted to landfill. "I don't believe that the commission's proposal, nor Liese's proposal, will fulfil the climate law," Dutch S&D lawmaker Mohammed Chahim said. Chahim, who is drafting parliament's opinion on reform of the carbon border adjustment mechanism, noted that both member states and parliament had approved the EU Climate Law. "And then they come with legislation that breaks the climate law," he said. Chahim argued that under the current proposals, sectors covered by the effort-sharing regulation would have to deliver deeper emissions cuts if the ETS is to achieve its 2040 target. "That's agriculture, that's transport, that's all non-ETS sectors," he said. Far-right Patriots lawmaker Mathilde Androuet said Europe's decarbonisation targets remain overly ambitious. "We cannot shift the industrial burden on to agriculture and transport, which are already struggling," she said. Androuet called for the annual reduction rate of ETS allowances, known as the linear reduction factor, to be cut to 1.7pc for 2031-35 and to 1.3pc from 2036, and from 3.7pc and 1.7pc proposed by the commission, respectively. The Patriots group also opposes the inclusion of municipal waste incinerators in the ETS and rejects conditions attached to member states' use of ETS auction revenues, particularly minimum spending requirements. "States must remain free to allocate these resources," Androuet said. She also voiced opposition to extending the ETS to international flights. Lawmakers have until 6 October to offer amendments to the draft report. The environment committee is expected to vote on its position on 1 December, followed by a plenary vote later in the same month. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

News

Turkey adopts ETS pilot phase rules

01/10/26

News

01/10/26

Turkey adopts ETS pilot phase rules

London, 1 October (Argus) — Turkey has adopted rules and procedures for the functioning of the pilot phase of its emissions trading system (ETS), which will be implemented in 2026-27. While obligated companies will only be subject to monitoring, reporting and verification (MRV) in 2026, the first compliance obligation will only arise for 2027 emissions, with the deadline for surrendering allowances equivalent to verified emissions set to be the last working day of November 2028. Free allocation will be set at 100pc for 2027, and the rules also confirm that banks and other financial institutions will not be allowed to participate in the pilot phase. Offsetting through carbon credits may only be allowed if specifically approved by the Carbon Market Board (CMB), according to the rules. This came as a surprise to market participants, as authorities have in the past indicated there will be no offsetting during the pilot phase. Allowances issued during the pilot can only be used for pilot obligations, and not be carried to the final phase. Any unmet pilot phase obligations will be carried forward into obligations under the first full implementation period. Benchmark values — which will determine free allocations for each category — will be set differently for power and non-power sectors. Power benchmarks will be calculated using five-year weighted-average emissions intensity — 2023-27 for the pilot phase. Benchmarks will be determined separately for each power plant, through a CMB decision. Industrial benchmarks, on the other hand, will rely on current-year sector-wide emission intensities. The directorate for climate change under the ministry will establish and publish benchmarks for each sub-installation for industrial firms. Benchmarks will be published through the national allocation plan, after verification reports are submitted. Obligated firms in the pilot phase must submit initial monitoring methodology plans by the end of October, according to the recently adopted ETS implementing act. The deadline to submit verified data for 2026 emissions is set on 30 April 2027 and for 2027 emissions on 30 April 2028. Power generators must submit historical emissions intensity data for 2023-25 by 30 June. The pilot phase is limited to five sectors which are also subject to the EU's carbon border adjustment mechanism (CBAM) — namely, electricity, cement, iron and steel, aluminium and fertilisers. Installations emitting 50,000t of CO2 equivalent or above must participate. The CMB can amend the pilot phase's scope, duration or implementation rules, according to the adopted text. It also confirmed that Turkey's first formal ETS compliance period will run during 2028-35, split into the 2028-30 and 2031-35 sub-periods. By Erisa Senerdem Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

News

EU committee calls for more climate finance at Cop 31

01/10/26

News

01/10/26

EU committee calls for more climate finance at Cop 31

Brussels, 1 October (Argus) — The EU and its member states should continue increasing climate finance through EU and national budgets, the European Parliament's environment committee said in a non-binding resolution it adopted today. The committee met ahead of the UN Cop 31 climate summit, which takes place in Antalya, Turkey, on 9-20 November. Backed by the EPP, S&D, Renew, Green and Left political groups, the resolution calls for stronger climate action from the aviation and maritime sectors. The clear cross-party majority in committee, of 50 votes with 16 against and 3 abstentions, indicates the likelihood of backing being given by the whole parliament at its 19-22 October plenary session. The draft resolution urges the International Civil Aviation Organization's Carbon Offsetting and Reduction Scheme for International Aviation (Corsia) and international shipping policies to align with a 1.5°C pathway, warning that the International Maritime Organization's draft net-zero framework is unlikely on its own to achieve that goal. The Paris climate agreement seeks to curb the global rise in temperature to "well below" 2°C above pre-industrial levels and pursues a 1.5°C limit. The committee said climate finance should be provided primarily through grants and concessional finance, while mobilising private capital. It stressed that funding should be additional to official development assistance and warned against double counting under the new collective quantified goal (NCQG) — which targets a minimum of $300bn/yr by 2035 . Lawmakers also called for a "dedicated and predictable" EU public finance mechanism to ensure the bloc delivers its fair share. The resolution highlighted the need for robust standards for high-quality carbon credits. The European Commission in July proposed allowing up to 260mn international credits in 2036-40 to count towards the EU's 2040 climate target, subject to safeguards on environmental integrity. Members of parliament also stressed the need for transparency, additionality and the avoidance of double counting. The committee further called on member states not to include fossil fuel lobbyists, or representatives of fossil fuel industry associations, in their Cop 31 delegations. EU member states are also expected to adopt conclusions before Cop 31, with diplomats discussing language on scaling up climate finance for developing countries and recognising "innovative" funding sources, including high-quality international carbon credits. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more