The Sectoral Growth Factor (SGF) and the Offset Obligation for 2025
Although operators have submitted their verified emissions data for 2025, their individual offset obligations are currently “frozen” during a calculation phase. This obligation is determined by the sectoral growth factor (SGF), a variable that reflects the total emissions growth of the international aviation sector relative to the reference value (85% of 2019 levels).
The October 2026 trigger
The ICAO Council is tasked with publishing the final SGF for 2025 no later than October 31, 2026. This publication marks the start of the reconciliation process for the 2025 CORSIA offset obligations.
- The notification period: Following the publication of the SGF, national authorities have until November 30, 2026, to formally notify each operator of its specific “offset obligation” (OR).
- The calculation formula: OR₂₀₂₅ = Verified offset emissions for 2025 × SGF₂₀₂₅
For operations and compliance managers, this notification marks the transition from “data management” to “accountability management.” Operators must ensure that their finance teams are aware of potential fluctuations in credit prices once these official “offset obligations” are issued simultaneously across the entire sector.
Procurement Strategy: Purchasing ICAO-Compliant EEUs
Now that the 2025 obligation has been quantified toward the end of the year, the focus is shifting to the procurement of CORSIA-eligible emission units (EEUs). Unlike the voluntary carbon market, CORSIA applies strict eligibility criteria that have been updated for the 2024–2026 period.
Eligibility and Article 6 of the Paris Agreement
A crucial development in 2026 is the scarcity of units accompanied by a Letter of Authorization (LoA) from host countries.
Under Article 6 of the Paris Agreement, these “Corresponding Adjustments” (CAs) are required to ensure that a CO₂ reduction is not double-counted by both the aircraft operator and the country where the project is located.
- Approved registries: Operators must ensure that credits originate from ICAO-approved programs, including the American Carbon Registry (ACR), Architecture for REDD+ Transactions (ART), Gold Standard, Verra (VCS), and others.
- “Vintage” restrictions: Credits must fall within the approved “vintages” for the first phase (compliance period 2024–2026). In general, eligible units must relate to emission reductions achieved between January 1, 2021, and December 31, 2026, originating from projects whose first crediting period began on or after January 1, 2016. The use of ineligible credits will result in rejection by the national authority during the review of the report on the cancellation of emission units.
The Deadline for Cancellation
Although the 2025 SGF will be issued in 2026, the physical “cancellation” of these credits (marking them as canceled in a registry) for the entire period 2024–2026 must be completed no later than January 31, 2028 .
Completion of the 2026 monitoring cycle
The monitoring currently being conducted will be subject to independent third-party verification by April 30, 2027 .
As the verification body, we emphasize the following for the 2026 cycle:
- Data consistency: Ensure that the fuel monitoring method (e.g., Method A, B, Block-off/Block-on, Fuel Uplift, Fuel Allocation with Block Hour) has remained consistent with your approved Emissions Monitoring Plan (EMP).
- Handling data gaps: Operators must be vigilant in identifying “data gaps” in their data. The use of the ICAO CORSIA CERT tool to fill in gaps is permitted, but only within the 5% threshold of the total number of offset flights.
- Analysis of New Routes: If your airline launched new international routes in 2026, immediately verify whether the destination country participates in CORSIA.
Transition to Phase 2 (2027 and beyond)
On January 1, 2027, while verification for 2026 is still underway, the sector will enter the second phase.
- Expanded Scope: The transition to Phase 2 will be accompanied by a mandatory expansion of the number of participating countries. As a result, routes that were not subject to CORSIA’s offsetting requirements in 2026 may become subject to these requirements starting in 2027.
- Market-related considerations: The transition to Phase 2 is expected to lead to an increase in the total demand for eligible emission units, particularly those that meet the ICAO criteria and the associated adjustment requirements of Article 6. Operators should therefore closely monitor developments in the carbon market and updates to the ICAO criteria when planning their future compliance strategy.
Conclusion for Aircraft Operators
The 2026 monitoring year is not merely an administrative repeat of 2025. It marks the final “closing period” for the first phase of CORSIA for aircraft operators. By the end of October 2026, the SGF will provide the definitive clarity needed to determine the offsetting requirements for 2025. At the same time, the rigor with which ongoing monitoring activities for 2026 are carried out will directly impact the efficiency and outcome of the final Phase 1 verification process in 2027.
Aircraft operators that adopt a “Verification-Ready” approach throughout 2026—including robust monitoring, data integrity checks, internal controls, and timely documentation management—will be better positioned to meet both the offsetting and reporting requirements of CORSIA when the scheme transitions to Phase 2.
References
- ICAO (2026). Annex 16 to the Convention on International Civil Aviation, Environmental Protection—Part IV. 2nd edition.
- ICAO Council (2025). Publication Schedule for theCORSIA Sectoral Growth Factor (SGF)for Phase I.
- UNFCCC (2026). Progress Report on the Implementationof Article 6 : Corresponding Adjustments and International Transfer of Mitigation Outcomes (ITMOs).
- IATA (2026). CORSIA 2026 Monitoring and ReportingGuidelines for Member Airlines.
- Verra/Gold Standard (2026). Joint Statement on the Provision of ICAO-Eligible Units and Associated Adjustments.
