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What Is SGF? And Why Does it Matter?

CORSIA’s Sectoral Growth Factor (SGF) for 2024 was 0.159.

If that number means nothing to you, you’re in good company; most people outside aviation have never heard of it. But inside CORSIA, it is the number that activated the first meaningful offsetting requirement for international airlines.

Here’s what it represents. CORSIA requires airlines to offset growth in international aviation emissions above a defined baseline. For the First Phase (2024–2026), that baseline is 85% of 2019 emissions. The SGF measures how far emissions exceeded that baseline.

In 2024, emissions were roughly 16% above it. That translates to approximately 50 million tonnes of offset demand. During the pilot years, the SGF was zero. Aviation had not yet exceeded the baseline. CORSIA functioned more as a framework than a market. That has now changed.

For project developers, a positive SGF marks the point where CORSIA moves from policy architecture to compliance reality. But this compliance market does not look like what most people expected.

Demand is concentrated. Supply is bottlenecked. US participation is uncertain. And the January 2028 compliance deadline is close enough that projects without host-country authorizations may be running out of runway.

This article examines what's actually happening in CORSIA's First Phase: where the current eligible credits have come from, which airlines face the most significant obligations (for 2024), what US policy uncertainty means for both supply and demand, and whether project developers should be chasing authorisations or focusing their attention elsewhere.

Where CORSIA Supply Actually Stands

A Narrow and Politically Sensitive Pipeline

Despite broad methodological alignment with ICAO criteria, actual First Phase eligible supply remains limited. The constraint is not methodology. It is host country authorization with corresponding adjustments under Article 6.

At present, only a small group of projects have been correctly labeled in registries for CORSIA First Phase eligibility. These include:

• ART TREES: Guyana REDD+
• Gold Standard: Selected cookstove projects in Malawi and Tanzania
• Verra: Select cookstove projects in Rwanda, Laos, Sierra Leone, and The Gambia

In total, approximately 23 million credits have been tagged as CORSIA-eligible in registries.

Against projected First Phase demand of roughly 120–180 million credits, that is less than one-fifth of anticipated needs. The supply gap is real, but authorization is not simply a matter of waiting.

Host country approval is discretionary and revocable. Political decisions can override technical alignment. Kenya provides a cautionary example: Koko Networks, a major cookstove distributor, reportedly collapsed after years awaiting a letter of authorization that never came. Authorization risk is sovereign risk. For developers, that changes the calculus.

Eligibility Often Requires Insurance

For developers who have secured host country authorization, there is a further consideration that is often overlooked in early-stage feasibility conversations: insurance.

When evidence of a corresponding adjustment has not yet been submitted (i.e., inclusion in a Biennial Transparency Report, BTR, submitted to the UNFCCC by the host country), which may be the case for most projects as of today, both Verra and Gold Standard require developers to hold an approved insurance policy before credits can receive a CORSIA-eligible label. Ultimately, these policies are designed to try to unlock supply by providing a guarantee of credit replacement in the event of an authorization reversal or failure to apply the corresponding adjustment.

What does this mean for project developers who pursue this path? BTRs are submitted on a two-year cycle, and each registry sets its own coverage requirements:

• Verra: Coverage must remain in place for at least two years after the host country’s deadline to submit its BTR.
• Gold Standard: Coverage must remain in place until the host country’s BTR is published.

However, since the BTR falls outside a developer's control, insurance is a necessary risk-mitigation measure, and a variable that developers without corresponding adjustment evidence should factor into costs and operations upfront.

Where Demand Is Concentrated

A Small Group of Airlines Drives the Market

Analysis of ICAO-reported emissions data shows that offset obligations are highly concentrated. The top ten airlines account for roughly 55% of total expected CORSIA demand.

Three of the top ten are US carriers. Together, they represent roughly one-third of the top-tier demand. That concentration matters. Over a third of the largest potential buyers operate under a government that has never transposed CORSIA into domestic law.

We know that US carriers generate obligations on paper. The question is how enforceable and stable that demand will be.

Note: CORSIA applies only to international routes between participating states. US domestic aviation, which is larger than its international footprint, falls outside the scheme. But US airlines still dominate many international routes, making them among the largest expected CORSIA buyers globally.

US Policy: Noise or Structural Risk?

In January 2026, President Donald Trump directed the US to withdraw from 66 international organizations. CORSIA and ICAO were not included on that list, suggesting the administration views aviation standards bodies differently from climate frameworks. But here's the complication: the US never transposed CORSIA into national legislation. This leaves monitoring and reporting purely voluntary: no penalties, no enforcement mechanisms, no legal obligations.

Then there's the Paris Agreement withdrawal, which officially took effect this January (2026). Most market analysts think this means no CORSIA Phase I-eligible supply will come from US projects; without Paris membership, the US can't issue Corresponding Adjustments to prevent double-counting. But some argue the opposite: if the US isn't bound by a Nationally Determined Contribution (NDC), perhaps the CA requirement becomes moot. The debate remains unresolved.

Regardless, the First Phase offsetting deadline isn't until January 2028, and American carriers will likely continue to represent a significant source of demand. However, operating without domestic enforcement under an administration that’s already withdrawn from international climate frameworks will likely pose challenges for developers and buyers.

What is clear:

• American airlines still face reputational and international market pressures.
• The 2028 compliance deadline remains fixed.
• Procurement planning for compliance typically begins closer to deadlines.

Demand from US carriers may not disappear. But it may not behave like traditional compliance demand either. For developers, that means buyer concentration risk is real.

Is there a real CORSIA opportunity for suppliers?

Despite the constraints, CORSIA represents a genuine compliance market with actual buyers. And while the current outlook may look underwhelming, suppliers must acknowledge it to inform strategic decisions (e.g., whether to pursue CORSIA-eligible requirements).

What observations can we make? The infrastructure works: Japanese airlines have proven that, albeit at a small scale thus far. The SGF is positive and likely to stay positive as aviation grows. And while only 23 million credits are currently tagged as eligible by registries, this is a meaningful expansion in supply beyond the Guyana REDD+ project, which had been the sole eligible project for the First Phase for a while.

What assumptions and predictions can we make? A likely assumption is that airlines are waiting because limited inventory makes bulk purchasing impractical, and current prices may feel high compared to what some paid for Pilot Phase credits. But the January 2028 deadline is close enough for procurement teams to act in 2026-2027. As supply expands and reputational pressure builds, enquiries and purchasing may accelerate.

Strategic CORSIA Guidance for Project Developers

1. Authorization is a Market Access Decision

If your host country has issued authorizations, the pathway is proven. If your country signals readiness but has not yet issued authorizations, timelines are tight but achievable, and insurance becomes crucial. If your country shows no willingness, pursuing CORSIA eligibility may divert focus from more reliable demand channels. Right now, CORSIA is a selective strategy.

2. Operational Readiness Matters as Much as Eligibility

Airlines prioritize counterparties that can:

• Secure correct registry labeling
• Provide clear Article 6 documentation
• Execute streamlined retirements
• Deliver at scale

Thorough, high quality execution matters just as much as eligibility.

3. Supply Constraints Create Optionality

Limited tagged supply may suppress purchasing today, but it also positions early movers to command attention as 2028 approaches. As supply expands and reputational scrutiny increases, procurement activity may accelerate quickly between 2026 and 2027.

Being ready before that shift matters.

The Bottom Line

CORSIA is no longer a hypothetical framework: The SGF is positive, demand exists on paper, and the infrastructure works.

But supply is constrained by sovereign authorization decisions and buyer concentration introduces risk. For project developers, this is more of a portfolio strategy question than a binary decision. Do you pursue CORSIA eligibility now, secure authorization/insurance, and position for concentrated compliance demand? Or do you focus capital and attention elsewhere?

Constraints create opportunity, but only for those prepared to navigate them.

In Part 2, we will outline how to align with CORSIA requirements operationally, and highlight which project types and jurisdictions are successfully securing authorizations and engaging in procurement conversations with airlines.