Platts seeks feedback on capturing shift from CORSIA Pilot to Phase 1 within CEC assessment

Platts, part S&P Global Commodity Insights, is seeking feedback on how to best to evolve its CEC assessment in the context of the upcoming expiry of the Pilot phase of the International Civil Aviation Organization, or ICAO, CORSIA scheme to Phase 1, slated for Jan. 2024.

Under the ICAO, airlines have committed to reducing their carbon footprint through an initial voluntary period -- the Pilot Phase, 2021-2023 -- and a subsequent mandatory reduction period -- Phase 1, 2024-2026 and Phase 2, from 2027 onwards -- according to the registry and methodology limits set out here.

While to date Platts has not specified which phase of the CORSIA program its CEC assessment covers, it has reflected market activity for CORSIA-eligible credits during the Pilot phase. Vintages reflected in the assessment have been 2016-2020, as outlined by CORSIA for the Pilot.

Under Phase 1 of the CORSIA scheme, vintages will roll to 2021-2026. An additional expected criteria of Phase 1 is the presence of a Corresponding Adjustment attached to the credit, guaranteeing that the host country will not claim the credits against its climate goals, thus avoiding double counting.

At present, Platts understands that there are no credits eligible for CORSIA Phase 1 that have also obtained a Corresponding Adjustment, creating uncertainty around which credits will be CORSIA eligible at the time of retirement.

In this context, Platts is seeking feedback on how market participants determine the value of Phase 1 eligible CORSIA credits, including:

• In the absence of a Corresponding Adjustment, what do counterparties consider reasonable assurance for CORSIA Phase 1 eligibility?
• How does the presence of a Letter of Agreement impact the price of credits?
• Is there relevance to understanding the value of Pilot phase credits in addition to Phase 1 credits?
• Is there correlation in value between Pilot credits and Phase 1 credits?

Platts also welcomes feedback and comments on any other factors or criteria deemed relevant in understanding the value of CORSIA-eligible credits from January 2024 onwards, and how these should be reflected in its market coverage from Jan. 2, 2024.

Full details on the current specifications of Platts CEC are set out in the Carbon Markets Specifications Guide available here.

Please send any feedback to Platts_Carbon@spglobal.com and pricegroup@spglobal.com by Nov. 10, 2023.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.