Sector growth factor: Its impact and the role of CORSIA-eligible fuels and emission units in claims and reporting.

Introduction

CORSIA, adopted in 2016, establishes a global system for monitoring, reporting, verifying and offsetting international aviation emissions above 2019 emission levels. Now in its first phase, aircraft operators may face offsetting obligations for the first time. The sectoral growth factor (SGF) for 2024, to be released in October 2025, is expected to be positive. States will notify each operator of its compensation obligations by November 30 of the following year (e.g., 2024 obligations in 2025, 2025 in 2026, and so on). On Nov. 30, 2027, states will also notify operators of the 2026 obligation and the final obligation for the 2024-2026 compliance cycle.

Operators can purchase and cancel eligible emission units at any time during the compliance cycle, but must ensure that all final obligations are met by Jan. 31, 2028, or within 60 days of notification. These obligations can be reduced by using CORSIA-eligible fuels (CEFs), provided the claims are fully documented.

1. Sectoral growth factor (SGF) and its impact.

The sectoral growth factor (SGF) is one of the cornerstones of CORSIA. The SGF represents the growth rate of international aviation CO₂ emissions above the 2019 baseline and is applied uniformly to all participating operators.

Formula:

Where:

SEy = Total sectoral CO₂ emissions for state savings subject to offset requirements in the given year y

SEB,y = 85% of total annual sectoral CO₂ emissions for state pairs subject to compensation requirements in 2019 in the given year y.

Application

Each operator's offset requirement = Operator's offset emissions × SGF.

Objective:

The SGF ensures that compensation obligations are linked to the growth of the collective sector, promoting equity and competitive neutrality. By applying the same growth factor to all operators, CORSIA prevents individual carriers from being penalized for traffic patterns, market share, or regional differences in growth.

Allocation Approach

• 2024-2032: Bonds are fully sectoral, 100% based on the sectoral component.
• From 2033: Bonds are blended, 85% sectoral and 15% individual growth, introducing stronger accountability for each operator's own performance while maintaining a level playing field.

Impact of SGF 2024

The 2024 SGF will be released in October 2025 and based on traffic projections, it is expected to be positive, indicating that total sector emissions have exceeded the 2019 baseline emissions levels. This outcome has direct implications:

• A positive SGF creates an offset requirement for each operator assigned to a participating state.
• While operators can make preliminary calculations once the SGF is released, the final official obligation will be communicated by their state no later than Nov. 30, 2025.
• Operators must then purchase and cancel CORSIA Eligible Emissions Units (EEUs) equal to that obligation for the first phase (2024-2026) no later than Jan. 31, 2028.

The SGF thus acts as the trigger mechanism in CORSIA, converting sector-level emissions data into enforceable offset obligations for individual operators.

Publication

The official CORSIA annual sector growth factor (SGF) document will be published on ICAO 's CORSIA website in the CORSIA Central Registry (CCR), ensuring transparency and equal access to data for all stakeholders.

2. CORSIA eligible fuels (CEFs).

CORSIA-eligible fuels (CEFs) are aviation fuels that provide life-cycle greenhouse gas emission reductions compared to fossil aviation fuel and meet ICAO sustainability requirements. They can be used to reduce an operator's total offset obligation for a compliance cycle and include sustainable aviation fuels (SAFs) and low carbon aviation fuels (LCAFs).

SAFs under CORSIA:

SAFs produced from renewable resources such as waste oils, agricultural residues or advanced biomaterials must:

• Provide at least 10% life cycle greenhouse gas emission reduction compared to fossil jet fuel.
• Meet ICAO's 14 sustainability criteria (relating to land use, biodiversity, labor rights, etc.).
• Are certified under an ICAO-approved sustainability certification system (SCS).

LCAFs under CORSIA:

Unlike SAFs, LCAFs are derived from fossil sources but provide lower life-cycle emissions due to improved production methods, carbon capture or cleaner use of hydrogen in refining. LCAFs are recognized as CORSIA-eligible fuels if they meet ICAO life-cycle and sustainability requirements.

Claiming CEFs:

To reduce offset obligations, operators must:

• Emissions Report.
• Supplementary CEF information document to the emissions report.
• Supporting evidence, such as:
  - Proof of Sustainability (PoS) or Proof of Compliance (PoC).
  - Product transfer document (PTD).
  - Purchase receipt.
  - Statement of calculated blended percentage (if fuel is blended).
  - Statement that no duplicate claims are submitted.

Verification ensures that claims are robust and prevents double counting, strengthening transparency and credibility.

3. Eligible Emission Units (EEUs).

When reductions from CEFs and operational measures are not sufficient to meet offset requirements, operators use Eligible Emissions Units (EEUs).

• Definition: Carbon credits approved by the ICAO Council for use in CORSIA, based on recommendations of the Technical Advisory Body (TAB).
• Core safeguards: Units must be genuine, supplemental, permanent, verified and not double counted.

Eligibility criteria for emission units.

Approval of EEUs is based on CORSIA criteria for eligibility of emission units. These criteria ensure both environmental and social integrity and consist of two main layers:

1. Program design criteria - covering governance, transparency, recordkeeping systems and safeguards against duplicate issuance or use.
2. Criteria for assessing the integrity of carbon offset credits - to ensure that credits represent real, additional, permanent emission reductions without leakage.

TAB conducts program-level reviews and only programs that meet the criteria are recommended to the Council for approval. Emission unit programs are approved by the ICAO Council to provide CORSIA-eligible emission units. Although several programs were approved in the pilot phase, not all of them advance to the first phase (2024-2026). Operators should therefore ensure that units are sourced only from ICAO-approved programs for the relevant compliance period.

Meeting compensation requirements (OR).

Under CORSIA, each aircraft operator must meet its offset requirement (as calculated and formally communicated by its state) by canceling a quantity of CORSIA-eligible emission units equal to its final obligation for that compliance period.

• Timeline: Aircraft operators will be notified of their offset obligations by November 30, 2025 (for 2024 emissions).
• Exemption threshold: If the sum of an aircraft operator's offset requirements (OR) over the three years of a compliance cycle (OR1,C + OR2,C + OR3,C) is less than 3,000 tons of CO₂, then the operator has no offset obligation for that compliance period.

EUCR (Emissions Unit Cancellation Report): After cancellation, operators must prepare and submit an EUCR.

• EUCR verification can be done annually to ease the reporting workload or at the end of the cycle.
• The deadline for submitting verified EUCR (with the verification report) to the states is April 30, 2028 for the first phase.

This process ensures that operators' obligations are not only met but also independently verified, thereby maintaining the integrity and credibility of the scheme.

4. Verification

While the SGF, CEFs and EEEs are the technical foundations of CORSIA, its credibility rests on independent verification.

As a trusted third-party verifier, Normec Verifavia ensures:

• Accuracy of operator emissions reports.
• Completeness of CEF claim documentation.
• Verification of EEU cancellations and EUCRs.

This independent oversight gives regulators, customers and investors confidence in operator compliance.

Conclusion

The Sectoral Growth Factor (SGF) for 2024, due out in October 2025, is expected to be positive, creating compensation obligations under CORSIA. States will confirm these by November 30, 2025, with operators required to purchase and cancel emission units within the compliance period, or at the end of it, supported by verified EUCRs. Obligations can be reduced through CORSIA eligible fuels, provided claims are fully documented and verified. At Normec Verifavia, we ensure that operators not only meet compliance requirements, but also demonstrate real progress on aviation's journey to net zero.