EU Drops Stricter Carbon Credit Rules For CORSIA Phase 1, But Maintains Tougher Standards For Phase 2

The European Commission has withdrawn proposed additional quality criteria for CORSIA Phase 1, covering 2024–2026 emissions, while retaining stricter requirements for Phase 2 (2027–2035). The revised approach means Phase 1 credits from High Forest-Low Deforestation projects and cookstove or other projects displacing non-renewable biomass will not be barred under the proposed EU rules. Meeting minutes described the change as a goodwill gesture intended to secure a positive autumn vote. Market participants had expected the shift because little time remains in Phase 1 and eligible supply is constrained. Traders anticipate Phase 2 market fragmentation, with EU-eligible credits carrying a $5–6 per tonne premium. Asian airline RFPs totaling about 700,000 tonnes also boosted purchasing in early July ahead of the Commission’s broader EU ETS review.
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