Public Commentary: The material below outlines FG Capital’s approach to CORSIA-eligible carbon-project structuring. It is provided solely for informational purposes and does not constitute investment advice or a solicitation.
CORSIA-Eligible Project Structuring – Aviation Carbon Credit Solutions
The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) obliges airlines to offset growth-related emissions with credits that meet stringent eligibility tests. Projects must comply with International Civil Aviation Organization (ICAO) criteria covering additionality, permanence, double-counting prevention, and robust Monitoring, Reporting & Verification (MRV). FG Capital provides end-to-end advisory, capital structuring, and registry liaison to deliver credits that satisfy airline demand while maximising sponsor revenue.
Key CORSIA Eligibility Requirements
• Approved Programme:
Credits must originate from a programme endorsed by ICAO (e.g., Verra VCS, ACR, Gold Standard, ART).
• Vintage Criteria:
Emission reductions must occur during the pilot (2021-2023), first (2024-2026), or subsequent phases and be listed as eligible by ICAO’s Technical Advisory Body.
• Host-Country Corresponding Adjustment:
For post-2020 vintages, projects must secure a written assurance that the host nation will apply Article 6 adjustments to avoid double claiming.
• Permanence & Buffer Mechanisms:
Robust reversal-risk mitigation (buffer pools, insurance, or physical safeguards) is mandatory.
• No Double Counting:
Credits cannot be used simultaneously for Nationally Determined Contributions or other compliance systems.
Project Types Aligning with Airline Demand
• Renewable Energy (RE):
Wind, solar, and run-of-river hydro projects with clearly additional baselines.
• High-Integrity Nature-Based Solutions:
Avoided deforestation (REDD+), afforestation/reforestation (ARR), and blue-carbon projects with conservative leakage accounting.
• Methane Abatement:
Landfill gas, livestock digesters, and coal-mine methane—high volume, measurable, and low permanence risk.
• Industrial Gas Destruction:
N 2
O, HFC-23, and SF 6
abatement with stringent monitoring.
• Emerging Removals:
Biochar, BECCS, and DAC with verified tonne-year accounting where accepted.
Our Structuring Framework
1 | Eligibility Screening
• Programme approval, methodology alignment, and host-country policy review.
2 | Baseline & Additionality Validation
• Financial-additionality tests, conservative baseline setting, and leakage analysis.
3 | Capital Structuring
• Senior green loans, subordinated facilities, or advance credit purchases matched to expected issuance schedule.
• Contractual clauses ensuring vintage compliance and corresponding adjustments.
4 | MRV & Registry Liaison
• Digital data-capture systems, third-party verification, and timely registry submissions.
5 | Credit Placement
• Long-term offtake contracts with IATA member airlines and airline-led purchasing coalitions; spot trades arranged post-issuance.
Indicative Financial Parameters
| Metric | Energy / Methane Projects | Nature-Based Removals |
|---|---|---|
| Forward Credit Price (USD / t) | 8 – 12 | 14 – 20 |
| Senior Debt Margin | SOFR + 250 – 325 bps | SOFR + 275 – 350 bps |
| Target Equity IRR (post-tax) | 11 % – 15 % | 14 % – 18 % |
Representative Capital Stack
| Tier | Security Package | Cost of Capital | Typical Providers |
|---|---|---|---|
| Senior Green Loan | Pledge over project assets and credit revenues | SOFR + 250 – 325 bps | Infrastructure lenders, multilateral banks |
| Subordinated Facility | Second lien; cash-sweep covenant | SOFR + 450 – 600 bps | Private credit funds |
| Advance Credit Purchase | Delivery contract with make-good provisions (vintage-specific) | Fixed price per tier above | Airline consortia, brokered pools |
| Sponsor Equity | Residual cash flow | Target IRR per tier above | Project developers, strategic investors |
Stakeholder Benefits
- Airlines: Guaranteed access to eligible credits, mitigating CORSIA compliance liability.
- Project Sponsors: Early-stage liquidity, faster verification cycles, and premium pricing.
- Investors: Predictable cash flows backed by long-term airline demand and regulatory drivers.
- Communities & Regulators: Verified climate outcomes with stringent safeguards against double counting.
Engagement
Developers and investors pursuing CORSIA-eligible projects are invited to consult our advisory team. We would be pleased to discuss eligibility screening, financing options, and long-term offtake strategies.
This document is provided for informational purposes only. It does not constitute investment advice and should not be interpreted as an offer to buy or sell any security, financial instrument, or service. Independent professional guidance is advised before acting on any information contained herein.
