“Over the years we’ve invested significantly in our field data team - focusing on producing trusted ratings. While this ensures the accuracy of our Ratings, it doesn’t allow the scale across the thousands of projects that buyers are considering.”
For more information on carbon credit procurement trends, read our "Key Takeaways for 2025" article. We share five, data-backed tips to improve your procurement strategy.
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This is an abridged version of an in-depth expert blog exclusively available on Sylvera's Article 6 & CORSIA Hub. To get a demo of the platform and access exclusive content, click here.
Carbon markets have existed for decades, but the market for authorized credits is new, and its integrity depends on one thing: national reporting.
Under the Paris Agreement's Article 6.2 guidance, governments can authorize carbon credits for use toward another country's emission reduction target, or toward international compliance schemes like CORSIA. When they do, they commit to applying corresponding adjustments (CAs) — adding those emissions reductions back to their own national balance so they aren't counted twice.
But a CA is only as credible as the reporting behind it. Issuing a Letter of Authorization (LoA) is just the start of national tracking and reporting obligations, both domestically and under the UNFCCC's Enhanced Transparency Framework.
This matters to a wider group than it might first appear: host countries issuing authorizations, airlines complying with CORSIA, sovereign governments using credits toward their own climate targets, investors backing the underlying projects, and insurers. For many host countries, these Article 6.2 reporting requirements are far more complex than anything they've had to manage before, and officials are working through unfamiliar questions about how many credits they can afford to transfer while still meeting their own targets. Sylvera's Article 6 & CORSIA Hub was built to help these stakeholders make sense of that complexity.
Why reporting is the backbone of the system
Article 13 of the Paris Agreement established the Enhanced Transparency Framework, which requires all participating countries to submit a Biennial Transparency Report (BTR) and National GHG Inventory on their emissions and progress. Countries that take on Article 6.2 obligations layer additional requirements on top: an Initial Report covering all authorized activities, an annual Agreed Electronic Format (AEF) submission with transaction-level data, and a Structured Summary and Regular Information disclosure that together account for how CAs have been applied over time. Taken together, these submissions form the reporting architecture that lets the market verify a credit hasn't been double-counted.
Least Developed Countries and Small Island Developing States get some flexibility on deadlines. But that flexibility isn't a permanent exemption — and without an up-to-date emissions inventory, verifying a CA isn't reliably possible, no matter how much runway a country has been given.
Three patterns showing up in early submissions — and why that's a normal part of getting there
Sylvera's Article 6 & CORSIA Hub tracks country-level risk directly from what we're seeing in the first wave of real-world Article 6.2 reporting. Three patterns stand out. None of them are surprising: this is genuinely new territory for every government involved, and learning by doing is exactly how the market matures. Early movers are effectively writing the playbook as they go, and the fact that gaps are showing up now — while volumes are still relatively low — is what lets the whole system improve before the stakes get higher.
Timeliness. Some countries are filing later than the guidance intends. That's an understandable growing pain for anyone navigating a genuinely new process. Still, as CORSIA's first compliance phase approaches, timeliness is worth watching, since persistent lateness could eventually become a material factor for credits already in circulation.
Completeness. Some submissions are missing key data, particularly around credit volumes, vintages, or the methodology used to calculate a CA. This is often simply a matter of capacity-building: countries are standing up new reporting processes for the first time, and completeness tends to improve markedly as they gain experience with successive filings.
Accuracy. In some cases, figures reported in one place don't yet reconcile with figures reported elsewhere. These mismatches usually reflect honest differences in interpretation or the challenge of coordinating across government ministries, rather than anything more serious. However, it creates confusion and uncertainty about what the real supply is and complicates verifying whether a CA has been applied.
What this means for buyers, investors, and insurers
An authorization is a signal of intent, not a guarantee. When a host country's reporting is late, incomplete, or inconsistent, the risk shows up differently depending on who you are.
Airlines and sovereign buyers carry similar underlying exposure, but it surfaces in different ways. CORSIA doesn't require airlines to verify a credit's authorization themselves, but weak host-country reporting still undermines the integrity of the supply they're relying on. Sovereign governments using credits toward their own NDC targets face this risk more directly, since their ability to claim legitimate progress depends on the same reporting holding up.
Investors and project developers may have committed capital on the assumption that an authorization would be straightforward to substantiate. An LoA that can't be backed up by the required reporting is functionally weaker than it looks on paper, even if it's never formally withdrawn. For project developers, weaker host-country reporting can mean friction at every stage, from buyer due diligence to secondary market liquidity.
Insurers underwriting carbon credit delivery risk are increasingly factoring reporting quality into how they price and structure coverage. As this market matures, reporting gaps are likely to show up as higher premiums or narrower coverage.
What good looks like
The frameworks and templates for solid Article 6.2 reporting already exist, and technical support from UNFCCC and other initiatives is expanding. From here, progress depends on a few things happening in parallel: host countries building dedicated reporting capacity across ministries, buyers and investors treating reporting quality as a standard part of due diligence rather than an afterthought, and insurers and accreditation bodies building country-level reporting track records into their risk assessments.
With CORSIA's first compliance deadline approaching and sovereign buyers racing toward their 2030 targets, reporting quality is quickly becoming too important to treat as a secondary concern.
This is an abridged version of an in-depth expert blog exclusively available on Sylvera's Article 6 & CORSIA Hub. To get a demo of the platform and access exclusive content, click here.
Sylvera's Article 6 & CORSIA Hub offers a detailed, country-level assessment of authorization and reporting risk, so buyers, investors, and insurers can see exactly where a country stands before they're exposed to its gaps. Get in touch to learn more about the Article 6 & CORSIA Hub.
