On July 16 and 17, 2025, Verra and Gold Standard each announced new insurance frameworks and eligibility criteria aimed at supporting the integrity of CORSIA-eligible carbon credits. These insurance mechanisms are designed to address political risks associated with the potential double counting of emission reductions. As CORSIA enters a new phase of implementation, these developments represent a critical advancement in strengthening the credibility of the program, directly addressing one of its most prominent criticisms.
CORSIA, Double Counting Issues
The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), established by the International Civil Aviation Organization (ICAO) in 2016, is a global carbon compliance mechanism designed to offset emissions from international civil aviation. The scheme is divided into three phases: the pilot phase (2021–2023) and the first phase (2024–2026), which are voluntary, followed by the second phase (2027–2035), which becomes mandatory for most participating countries.
Given the nature of the credits used, CORSIA highlights how the Voluntary Carbon Market (VCM) is increasingly aligning with regulatory compliance standards. The program is based on the use of Eligible Emission Units (EEUs), VCM-originated credits approved by ICAO’s Technical Advisory Body.
To address the risk of double counting, CORSIA mandates that all eligible credits be accompanied by a Letter of Authorization (LoA) issued under Article 6 of the Paris Agreement. This LoA affirms that the host country (the country where the emissions reduction activity takes place) will not claim the reduction in its national inventory, thereby preserving the integrity of the credit for international compliance purposes.
However, these LoAs carry significant political risk, as host countries may revoke or amend their authorization at a later date, potentially resulting in the same reduction being counted both domestically and internationally. To mitigate this risk, Verra and Gold Standard have introduced political risk insurance frameworks specifically designed for CORSIA-eligible credits, offering additional assurance to credit buyers and reinforcing confidence in the system.
Verra’s Draft Insurance Criteria
On July 16, Verra released its draft criteria for insurance products designed to cover CORSIA-eligible carbon credits, specifically addressing scenarios in which emission reductions might be claimed by both the host country and the purchasing airline. Under these criteria, only Verified Carbon Units (VCUs) issued from 2021 onward will be eligible for use under CORSIA.
To receive a CORSIA-eligible label under the VCS Program, VCUs issued from 2021 onward must carry an Article 6 label, indicating that the host country has authorized the use of those credits under Article 6 of the Paris Agreement. In addition, the credits must meet one of the following two conditions:
- A completed corresponding adjustment for the mitigation outcomes represented by the respective VCUs;
- A forthcoming CORSIA Accounting Representation must be signed by an entity committing to compensate for any VCUs subject to double claiming, accompanied by a certificate of insurance for a Verra-approved insurance product.
To be considered eligible, the insurance product must satisfy several key requirements:
- If triggered, the insurance must deliver either an equivalent volume of VCUs (or other CORSIA-eligible units issued by a Verra-approved crediting program) or a financial payout sufficient to purchase equivalent replacement credits. This must be supported by a mechanism that monitors and adjusts for market price fluctuations.
- The insurance must be callable at any time at Verra’s discretion, in accordance with the CORSIA Label Guidance Rules. Furthermore, coverage must remain active for a minimum of two years beyond the host country’s deadline to submit its Biennial Transparency Report (BTR) following the first transfer of the covered VCUs. This condition is intended to allow adequate time to verify that no double counting has occurred.
- The insurance provider must hold a strong credit rating and be independent of both the host country and the project developer. The provider is also required to submit regular reports to Verra, disclosing details such as the VCUs covered, any changes in coverage, and any claims made under the policy.
As a next step, Verra plans to engage an insurance specialist to evaluate whether submitted insurance products meet the proposed criteria. Once this evaluation is complete, Verra will publish a list of approved insurance products. The draft criteria remain subject to revision based on the outcome of this assessment process.
Gold Standard Insurance Assessment Process
Verra’s announcement was followed a day later by Gold Standard’s launch of an assessment process for private insurance policies intended to enhance the eligibility of carbon credits under CORSIA. This framework is currently applicable only during CORSIA’s first phase.
To address the risk of double counting, Gold Standard outlined the following criteria for eligible insurance products:
- In the event that double-claimed units are identified, the insurance policy must support the project developer by either delivering an equivalent volume of Eligible Replacement Units (ERUs), or providing a cash payout (in U.S. dollars) based on current market rates to enable the purchase of equivalent ERUs.
- Insurance coverage must remain in effect for the entire period during which credits are exposed to potential adverse events. Specifically, the policy must remain valid until the host country publishes its BTR, thereby ensuring the credits are not counted twice.
- A Third Party Administrator (TPA) must be designated for the duration of the coverage. The TPA is responsible for retiring and/or procuring ERUs on behalf of the project developer or insolvency practitioner. The TPA must be a qualified organization with recognized expertise in converting insurance payouts into credits.
- Insurance claims must be processed within defined timelines. Payouts in ERUs must be completed within six months of receiving a Demand Notice, and within three months for cash settlements. Additionally, the insurance provider must hold a minimum security rating of A- from S&P, or an equivalent rating from another recognized agency.
Gold Standard has appointed Howden Group, a leading global insurance intermediary, to manage the assessment process for insurance policy submissions. Howden will oversee the evaluation of submitted products against criteria developed by Gold Standard, with assessments expected to begin in the coming weeks.
Gold Standard has issued a request for proposals to appoint independent technical experts responsible for delivering quality assurance on assessment outcomes. It has also released an updated Deed of Undertaking for VERs eligible under CORSIA Phase 1.