In August we wrote that the binding constraint in CORSIA had never really been demand. It was supply. ICAO's latest number makes that harder to ignore.
At the end of October, ICAO published the Sector's Growth Factor for 2025 at 0.18157674, or roughly 18.2%. The 2024 figure, revised in December, was 15.4%. That is close to an 18% jump year on year, and it lands at the upper half of what most of the market had modelled.
What the SGF actually does
The SGF is the single number that turns sector-wide emissions data into individual airline obligations. Every operator on a covered route multiplies its verified 2025 emissions by the same factor, and the result is the tonnage it has to offset. Using the same factor for everyone is deliberate. It stops CORSIA penalising an airline for its own growth or market share and keeps the cost competitively neutral across carriers.
National authorities now have until 30 November to formally notify each operator of its 2025 requirement. Airlines can reduce that figure with CORSIA Eligible Fuels, but SAF volumes are still small, so in practice almost all of it will be met by cancelling eligible emissions units.
What the number tells us
An SGF of 18.2% means emissions on covered routes in 2025 sat about 22% above the scheme's baseline of 85% of 2019 levels. In 2024 the gap was around 18%. International traffic kept growing faster than the baseline, which is exactly what the scheme is designed to price.
The 2024 requirement came in at 55.6 million tonnes. Before the release, IATA had put the 2025 requirement somewhere between 58.8 and 81.5 million tonnes, with a midpoint of 70.2 million at an SGF of 18.6%. The final figure sits just below that midpoint, which on our estimate puts the 2025 requirement in the high sixties of millions of tonnes. Taken together, the first two years of Phase 1 now account for well over 120 million tonnes.
The third year will likely be a little lighter. IATA's update on 30 October expects the 2026 SGF to come in moderately below 2025, partly because geopolitical disruption has weighed on traffic and partly because Dominica and Vietnam joining the scheme this year raised the baseline. Even so, IATA now puts total Phase 1 demand at between 169.5 and 214.8 million tonnes.
The gap between obligation and supply
Against that, IATA counts roughly 54 million tagged CORSIA-eligible units currently available. In August we cited around 41 million. Three months on, supply has moved slowly, while confirmed obligations have more than doubled.
Put simply, airlines already owe two and a half times the number of units that exist today, and they have until 31 January 2028 to cancel them. That deadline also overlaps with the start of Phase 2 on 1 January 2027, when participation becomes mandatory for most states and a second wave of procurement begins on top of the first.
IATA's own response is telling. It has launched the Aviation Carbon Market Compact and the CORSIA Supporting Alliance specifically to address the barriers holding back eligible supply. When the airlines' own industry body is organising around the supply problem, it is no longer a theoretical risk.
What this means for airlines
For compliance teams, the 2025 release removes the last reason to wait. Two of the three Phase 1 years are now fixed, and the third can be estimated within a fairly narrow range. The question has moved from how much to buy to where the units will come from and when.
A few things follow from that. Not every unit described as CORSIA-eligible can be used today. What matters is whether the host country has issued its letter of authorisation and the credits carry the CORSIA tag in the registry. Volume that depends on an authorisation still in progress carries timing risk that should be priced into any contract. And buyers who secure tagged volume early will be in a far stronger position than those competing for it in late 2027, when every airline in Phase 1 is trying to close out at once.
What this means for supply
For project developers, the release confirms a demand signal that is no longer in question. The value in this market is accruing to projects that have been taken all the way through: built to the required measurement standard, authorised by their host government and tagged. There are plenty of projects. There are far fewer that have completed that process.
That is the sequencing we have followed. Our tranche from DelAgua's Rwanda programme is already authorised and available for Phase 1 compliance. Our Uganda programme with DelAgua, covering 210,000 stoves, was designed for CORSIA from day one and is positioned to deliver into Phase 2 from 2027.
The 2025 SGF did not change the direction of this market. It confirmed the size of the obligation and shortened the runway to meet it. The next fourteen months will show how much of that gap the supply side can close.
Written By - Benjamin Michelson
