The CO2 exchange Climate Impact

This move comes after the International Civil Aviation Organization (ICAO) approved four additional carbon registries – Climate Action Reserve, Global Carbon Council, Gold Standard and Verra – to provide credits for the first phase of this offset scheme from 2024 to the end of 2026.

This brings the total number of registries to six, with the American Carbon Registry and the Architecture for Redd+ Transactions – a global initiative to reduce emissions from deforestation and forest degradation (Redd) – approved earlier this year.

The first phase of the offset scheme, known as the Carbon Offsetting and Reduction Scheme for International Aviation (Corsia), requires airlines to offset all carbon emissions above 85 percent of 2019 levels to stabilize the sector’s net emissions.

As more carbon registries deliver credits to Corsia, CIX anticipates an increase in demand for Corsia eligible credits and has designed the contract to accommodate the expected increase.

The Temasek-backed carbon exchange announced on Thursday that this will be the first contract in the market to accept eligible carbon credits issued by all fully approved ICAO registries for the first phase of compliance between 2024 and 2026.

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CIX is also the first exchange to connect to the entire network of current fully ICAO accredited registries. Connectivity to these registers is an important prerequisite for mapping a market-representative Corsia price, said the CO2 exchange.

“CIX’s latest offering addresses key challenges in Corsia and broader carbon markets, including fragmented liquidity and opaque pricing, by providing an efficient, standardized tool for spot trading of Corsia-enabled credits,” it added. It also says this will open up new opportunities for airlines and other market participants to trade emissions reductions on a large scale.

Only credits that have been specifically identified as Corsia Eligible or Corsia Compliant by the six registrars will qualify for delivery in the contract. To ensure transparency and easy access, CIX announced that it will provide market participants with a daily updated list of eligible loans through its trading portal.

Ellery Sutanto, head of exchanges at CIX, said the market needed a transparent and reliable pricing mechanism for loans approved for Corsia as more registries and projects had received ICAO approval.

“Our new contract will help facilitate on-screen pricing while providing an efficient tool for airlines and market participants to access large volumes of credits eligible under Corsia Phase 1 as supply increases,” explained he. “This will lay the foundation for a more liquid and well-functioning market.”

Aviation accounts for around 2 percent of global greenhouse gas emissions, and airlines are facing increasing pressure from regulators, consumers and investors to accelerate decarbonization.

According to CIX, demand for Corsia-eligible credits is expected to grow exponentially as the deadline for airlines to meet their obligations under the first compliance period approaches.

The International Air Transport Association assumes that CO2 emissions will rise to up to 162 million tons by 2026.