Article 6 and CORSIA: why authorised credits are reshaping demand

Karbuna

Sep 27

3 min read

Updated: 3 days ago

Airplane wing above the clouds seen through a window

A growing share of carbon credit demand now asks a question that most projects were never designed to answer: has a government authorised this credit? Two systems are driving that change. One is Article 6 of the Paris Agreement. The other is the aviation industry's offsetting scheme, CORSIA. Together they are reshaping what buyers want from new projects.

What Article 6 does

Article 6 lets countries cooperate to meet their climate targets. Under Article 6.2, countries can transfer emission reductions to each other through bilateral arrangements. Under Article 6.4, a UN-supervised system called the Paris Agreement Crediting Mechanism issues credits for approved projects. A 12-member Supervisory Body oversees it.

The key idea is the corresponding adjustment. When a host country authorises a credit for use by someone else, it adjusts its own emissions accounts so the same reduction is not counted twice. That protects the integrity of both countries' claims. It also means the host government becomes a party to the credit's story.

The mechanism is now issuing credits. In February 2026, it approved its first issuance, for a clean cooking programme in Myanmar that moved across from the Kyoto-era Clean Development Mechanism. The rules take a 5 per cent share of proceeds for the Adaptation Fund and cancel at least 2 per cent of credits to deliver an overall reduction in global emissions.

Why aviation matters

CORSIA is the International Civil Aviation Organization's scheme for offsetting growth in emissions from international flights. As of 1 January 2026, 130 states were taking part. Its first phase runs from 2024 to 2026.

Not every credit qualifies. For the first phase, a CORSIA-eligible unit must:

come from a programme approved by ICAO (eight programmes were approved by November 2025);
carry a letter of authorisation from the host country, so that a corresponding adjustment is applied; and
represent reductions made between 2021 and 2026, from activities whose crediting periods began in 2016 or later.

The gap between demand and supply is large. The airline industry body IATA expects first-phase demand of 170 to 236 million units. In June 2026 it put eligible supply at close to 40 million. The bottleneck is not project quality. It is the time host countries take to put authorisation rules in place and issue letters.

What it means for new projects

Authorised credits open doors to buyers that ordinary voluntary credits cannot reach. They also add work at every stage. For a project owner, five points stand out.

Talk to the host government early. Authorisation is a government decision. Knowing whether a country has an Article 6 framework, and what it expects in return, shapes the whole project.
Choose the standard and method with eligibility in mind. CORSIA eligibility depends on the programme and, in some cases, on the methodology. Changing course later is costly.
Write the contracts for it. Agreements should say who applies for authorisation, who carries the risk if it is delayed or refused, and how that affects price and delivery.
Plan the timeline realistically. Authorisation processes add months, sometimes more, on top of registration and verification.
Know which buyers need it. Not every buyer needs an authorised credit. A company making a voluntary contribution may be well served without one. The choice is commercial as much as technical.

A two-tier market

The result is a market with two tiers. Authorised credits serve compliance schemes and national targets, and are in short supply. Non-authorised credits continue to serve voluntary buyers. Projects that plan for authorisation from the start keep both routes open. Projects that do not may find one route closed at the point of sale.

Our view

Karbuna does not buy, sell or broker credits, and the decision on authorisation always rests with the host country and the project owner. Our role is to make sure the projects we support are designed with these routes in view: the right standard, the right methodology, clear rights and contracts, and early engagement with the authorities that matter.

The rules are still settling, and they will keep changing. The principle behind them is clear, and it rewards projects that can show exactly what each credit represents and who can claim it.

This article is general information only. It is not legal, financial or investment advice.