Aviation is entering a new phase in its efforts to cut carbon emissions. As air travel grows, airlines face pressure to reduce emissions while meeting the demands of long-distance flight. Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and sustainable aviation fuel (SAF) are becoming key tools, creating new policies, markets, and investment opportunities across the aviation industry.

This guide explains how CORSIA works, how SAF fits into aviation’s decarbonization strategy, and where the market is headed. It covers CORSIA rules and timelines, eligible carbon credits and fuels, SAF production pathways, market trends, costs, policy drivers, and the supply gap the industry must close to reach net zero.

CORSIA and SAF: Why Aviation Needs a New Decarbonization Strategy 

Aviation is one of the harder sectors to decarbonize. Aircraft need energy-dense fuels that can support long flights without adding excessive weight. Unlike cars, most commercial aircraft cannot yet switch to large battery systems at scale.

Aviation produces about 2.5% of global human-caused CO₂ emissions, according to the International Air Transport Association (IATA). Its wider climate impact also includes non-CO₂ effects such as contrails and nitrogen oxide emissions.

This makes aviation’s transition more complex than simply replacing fossil fuels with electricity. More efficient aircraft, improved flight operations and new propulsion systems can all reduce emissions. However, sustainable aviation fuel could play a major role in the near term.

SAF can be produced from feedstocks such as used cooking oil, agricultural waste and other renewable materials. It can also be used in existing aircraft as a drop-in fuel, allowing airlines to reduce lifecycle emissions without replacing their fleets. IATA estimates SAF could provide about 65% of the emissions reductions needed for aviation to reach net-zero CO₂ emissions by 2050.

SAF is not the only solution. CORSIA, ICAO’s global market-based measure for international aviation, addresses emissions that remain after other reduction measures. Together, SAF and CORSIA form two important parts of aviation’s broader path toward net zero.

What Is CORSIA? 

CORSIA is a global system created by the International Civil Aviation Organization (ICAO) to address the growth of CO₂ emissions from international aviation. It works alongside cleaner fuels, aircraft efficiency, and improved flight operations.

CORSIA’s offsetting requirements apply to eligible international flights between participating states. Domestic aviation is outside the scheme’s offsetting system. Airlines covered by CORSIA must also monitor, report, and verify their emissions under the program’s MRV requirements.

For 2024–2035, CORSIA uses a baseline equal to 85% of 2019 emissions. When an airline has an offsetting requirement, it must cancel eligible emissions units to cover the required amount.

CORSIA is therefore different from a conventional carbon tax. It creates a framework for managing specific international aviation emissions through approved emissions units.

The scheme also recognizes the emissions benefits of CORSIA Eligible Fuels, including qualifying SAF. This creates an important link between aviation fuel markets and carbon markets.

• In simple terms, SAF helps reduce aviation’s emissions, while CORSIA provides a framework for addressing some emissions that remain.

CORSIA Timeline: From Pilot Phase to Full Implementation

CORSIA was adopted by ICAO in 2016 and is being introduced in stages. This phased approach gives airlines, governments, and carbon-market participants time to build the systems needed for monitoring emissions and meeting offsetting requirements.

The Pilot Phase ran from 2021 to 2023. During this period, participation was voluntary, allowing countries and airlines to gain experience with CORSIA’s monitoring, reporting, and verification requirements.

The First Phase covers 2024 to 2026, with states participating voluntarily. However, airlines operating on routes between participating states can still be subject to CORSIA offsetting requirements. This is the phase CORSIA is currently in.

The Second Phase will run from 2027 to 2035. Participation becomes broader, although ICAO provides exemptions for certain states based on factors such as their level of international aviation activity and development status.

As of 2026, 130 states participate voluntarily in CORSIA. ICAO lists 134 participating states from 2027, when the Second Phase begins. Together, these phases are designed to expand the system while giving countries time to establish the necessary regulatory and reporting frameworks.

Beyond 2035, CORSIA will continue to operate as part of ICAO’s wider strategy for achieving net-zero carbon emissions from international aviation by 2050.

How CORSIA Calculates Airline Offset Requirements

CORSIA does not require airlines to offset all of their international aviation emissions. Instead, it focuses on emissions above a set baseline.

• From 2024 to 2032, the system mainly uses the growth of international aviation as a whole (100%). This is called the sectoral approach. It means an airline’s offset requirement is linked to the industry’s overall emissions growth, rather than only its own growth.
• From 2033 to 2035, the calculation will use both industry-wide and airline-specific emissions growth. The sectoral share will be 85%, while the airline-specific share will be 15%.

Airlines can also reduce their CORSIA obligation by using CORSIA Eligible Fuels, including qualifying SAF. They must provide records showing the amount of fuel used and its emissions savings.

This gives airlines two main ways to lower their CORSIA costs:

1. reduce emissions, and
2. use eligible lower-carbon fuels.

CORSIA Carbon Credits: What Can Airlines Use?

Airlines with a CORSIA offsetting requirement must cancel approved CORSIA Eligible Emissions Units (carbon credits) to cover it. These are not the same as any carbon credits sold in the voluntary carbon market. ICAO has a specific approval process for carbon credit programs that want to supply units for CORSIA.

The organization checks programs against rules covering areas such as additionality, monitoring, verification, and double counting. These rules are designed to make sure the claimed emissions reductions are real and properly tracked.

ICAO updates its list of eligible programs and units over time. As of April 2026, the framework includes programs such as the American Carbon Registry, Climate Action Reserve, Gold Standard, Isometric, and Verra’s Verified Carbon Standard, subject to specific eligibility conditions.

Importantly, being part of an approved program does not mean every credit from that program can be used under CORSIA. Eligibility can depend on factors such as the credit type, vintage, compliance period, and additional authorization requirements.

This has created a potential supply problem…

A July 2026 analysis from Sylvera estimates that CORSIA could create demand for about 163 million eligible emissions units (EEUs) during its first compliance phase, rising to 198 million credits under full implementation. Yet only about 38 million credits currently qualify, covering just 23% of expected first-phase demand. This creates a potential 125 million-credit supply gap.

The problem is not a lack of issued credits. About 300 million credits have been issued. However, many can’t qualify for CORSIA. They lack the necessary host-country Letters of Authorization or Corresponding Adjustments under Article 6 of the Paris Agreement.

By January 2028, the eligible supply might hit 640 million credits. However, Sylvera estimates that only about 104 million could be eligible due to authorization risks. Just 48 million are fully confirmed.

Airline purchases also remain limited. Only around 400,000 tonnes of CORSIA credits had been retired, equal to about 0.2% of expected first-phase demand. Delayed buying could create a rush for eligible credits as compliance deadlines approach.

That shortage could push prices higher. Sylvera’s modeling puts first-phase credit prices at about $15 per tonne in a low case, $33 in a base case, and $53 in a high case by January 2028.

The long-term cost could be much larger. An MSCI Carbon Markets analysis shows that if supply tightens, CORSIA compliance costs might hit $127 billion from 2024 to 2035. By 2035, eligible credit prices could reach nearly $100 per tonne. Estimated exposure includes about $8 billion for Emirates, $6 billion for Qatar Airways, and $5 billion for United Airlines.

These figures show why CORSIA is becoming a distinct carbon market. The challenge is not simply finding credits, but securing enough high-quality, authorized units that meet CORSIA’s eligibility rules.

• SEE MORE: Airlines Face a $127 Billion Carbon Credit Bill as CORSIA Supply Tightens

What Is Sustainable Aviation Fuel (SAF)?

Sustainable aviation fuel is aviation fuel made from renewable or waste-based materials. It is designed to replace part of the fossil jet fuel used by aircraft while producing lower emissions over its full lifecycle.

SAF can be made from feedstocks such as used cooking oil, animal fats, crop residues, forestry waste, and other biomass. Newer pathways can also use renewable electricity, hydrogen, and captured carbon to make synthetic fuels.

One of SAF’s main advantages is that it can work with today’s aircraft and fuel systems. Airlines can use approved SAF by blending it with conventional jet fuel, without replacing their existing fleets.

However, SAF is not automatically low-carbon. Its climate benefits depend on the feedstock, production method, energy source, and land-use impacts. CORSIA therefore uses lifecycle emissions to measure the climate performance of eligible fuels.

SAF also remains a very small part of the global fuel market. IATA expects global SAF production to reach about 2.4 million tonnes in 2026, equal to only 0.8% of total jet fuel use. But it must increase tremendously to 449 million tonnes by 2050 for net-zero aviation.

This large gap between current supply and future demand is one of the biggest challenges facing aviation’s net-zero plans.

SAF Feedstocks and Production Technologies: How SAF is Made

SAF can be made from many different materials. The choice of feedstock affects the fuel’s cost, emissions, and ability to scale.

Today, some of the main feedstocks include used cooking oil, animal fats, agricultural residues, forestry waste, and other forms of biomass. Waste and residue feedstocks are attractive because they can avoid some of the land and food concerns linked to conventional crops. ICAO groups SAF feedstocks into categories such as primary products, by-products, wastes and residues.

Several technologies can turn these materials into jet fuel. One of the most widely used is HEFA, which processes oils and fats with hydrogen. Other pathways include Fischer-Tropsch (FT), which can turn biomass or other carbon sources into fuel, and alcohol-to-jet (ATJ), which converts alcohols such as ethanol into aviation fuel.

Another emerging option is e-SAF, also called power-to-liquid fuel. It uses renewable electricity, hydrogen, and captured carbon to produce synthetic aviation fuel. This could greatly expand SAF supply because it is less dependent on biomass.

However, each pathway faces challenges. Waste feedstocks are limited, while newer technologies are still expensive and need more production capacity.

• This creates a key issue for the SAF market: the aviation industry needs much more fuel, but sustainable feedstocks and production capacity remain limited.

What Makes SAF Eligible Under CORSIA?

Not all SAF automatically qualifies under CORSIA. To receive CORSIA benefits, the fuel must meet ICAO sustainability rules and come from a producer certified under an ICAO-approved sustainability certification scheme.

One key requirement is emissions performance. CORSIA SAF produced from 2024 onward must achieve at least a 10% reduction in lifecycle greenhouse gas emissions compared with the baseline aviation fuel.

ICAO also considers factors such as land use, carbon stocks and the sustainability of the feedstock. This helps prevent fuels with poor environmental performance from receiving CORSIA benefits.

The system measures emissions across the fuel’s full lifecycle. This can include feedstock production, processing, transport, fuel production and aircraft use. It can also account for emissions linked to land-use change.

For airlines, this matters because qualifying SAF can lower their CORSIA offsetting requirement. The fuel must be properly certified, and its emissions savings must be supported by the required records. This creates a strong link between SAF production, sustainability certification, and the aviation carbon market.

ICAO’s CORSIA Eligible Fuels page was updated in June 2026. It now lists the Fourth Edition of the CORSIA Approved Sustainability Certification Schemes, and on June 22, 2026, ICAO approved Bonsucro as a new CORSIA-approved sustainability certification scheme.

The SAF Supply Gap: From 2.4M Tonnes to 500M

The biggest question for SAF is whether production can grow fast enough to meet future demand. As mentioned, IATA expects global SAF production to reach only 2.4 million tonnes in 2026. Yet, its net-zero pathway points to millions of tonnes of SAF per year by 2050.

• That means production must increase by more than 200 times from today’s level.

The challenge is not only building more SAF plants. The industry also needs enough sustainable feedstock, hydrogen, renewable power, refining capacity, and transport infrastructure.

Waste oils and fats are useful today, but their supply is limited. Other options, such as agricultural and forestry waste, could provide more fuel but require large collection and processing networks.

E-SAF could eventually reduce some feedstock limits by using renewable electricity, hydrogen and captured carbon. But the technology remains expensive and needs much more clean power.

The 2030s will therefore be critical. Governments will need stronger policies, while airlines and fuel producers will need to commit more capital.

If production grows slowly, SAF could remain a scarce and expensive fuel. If investment and technology scale quickly, it could become a much larger part of the global aviation fuel market.

• RELEVANT: SAF Crisis Deepens: IATA Says Aviation’s Net Zero Goal Is at Risk, but Brazil Offers New Hope

What Could Slow CORSIA and SAF Growth?

CORSIA and SAF face different challenges, but they are connected by the same goal: reducing aviation’s climate impact.

• For CORSIA, one challenge is coverage. The system applies to international aviation, while domestic flights are outside its offsetting system. Its impact also depends on how many states participate and how effectively airlines follow the rules.
• SAF faces a larger physical challenge. There is simply not enough low-carbon fuel available today. Production must grow much faster, while sustainable feedstocks remain limited.
• Cost is another major barrier. Airlines operate in a price-sensitive industry, so buying large amounts of expensive SAF can be difficult without policy support or customer demand.
• There is also a need for clear sustainability rules. SAF should deliver real emissions cuts without causing major damage through land-use change or other environmental impacts.

These challenges do not mean SAF or CORSIA will fail. They show why aviation needs a mix of solutions rather than relying on one technology or policy.

Conclusion: CORSIA and SAF Have Different Jobs

CORSIA and SAF are becoming important parts of aviation’s climate strategy, but they serve different purposes.

SAF tackles emissions at the fuel level. CORSIA helps address emissions that remain from international aviation. Together, they support a wider strategy that also includes better aircraft, more efficient operations and new technologies.

Closing the huge SAF production gap will require more than airline demand. Governments will need effective policies, producers will need major investment, and the industry will need new technologies and sustainable feedstocks.

CORSIA will also continue to evolve as its Second Phase begins in 2027. ICAO’s current framework already includes rules for eligible carbon units and fuels, giving the aviation industry a common system for managing international emissions.

The long-term outcome will depend on how quickly these systems can scale. For now, one point is clear: aviation’s path to net zero will depend heavily on making cleaner fuels available at much greater scale while strengthening the global rules that support emissions reductions.

• FURTHER READING: ASEAN Could Unlock an $8.5 Billion Carbon Market Opportunity Through CORSIA

The post CORSIA and SAF: The Complete Guide to Aviation’s Net-Zero Future appeared first on Carbon Credits.

Carbon removal buyer Senken and project developer Carbonsate have signed a 50,000-tonne carbon removal agreement tied to a biomass storage project in Namibia. The multi-year deal covers removals from 2026 through 2028, with deliveries starting this year.

Senken claims it’s the largest biomass storage deal in Europe so far. This agreement is also the second-largest buyer commitment worldwide in biomass geological storage and the biggest for a project in Africa.

The deal comes as companies look for more durable ways to remove carbon from the atmosphere. The project buries waste biomass underground. This prevents it from burning or decaying. It keeps carbon locked away for at least 100 years under the current certification.

A 50,000-Tonne Commitment Through 2028

The agreement covers 50,000 tonnes of certified carbon removal across the 2026, 2027 and 2028 vintages. Senken will procure the volumes for corporate buyers that need permanent carbon removal for their climate plans.

Senken says the deal is its third multi-year carbon removal supply commitment of 2026. Its other 2026 deal covered direct air capture, industrial biochar and regenerative agriculture for the aviation sector.

The companies also see room to expand the deal.

Carbonsate’s Namibia project could scale to more than 100,000 tonnes of carbon removal per year within the next few years, according to Senken. The two companies plan to expand their agreement as new capacity becomes available.

This matters because today’s carbon removal market still has limited supply. Senken says the wider permanent removal market has delivered about 1.5 million tonnes so far. The new 50,000-tonne agreement would equal roughly 4% of that amount.

How Namibia’s Waste Biomass Becomes Carbon Storage

Biomass storage is a form of carbon dioxide removal that uses plants as the first step. Plants absorb CO2 from the atmosphere as they grow. Normally, that carbon returns to the atmosphere when the plant material burns or decomposes.

Carbonsate takes a different approach.

The company removes excess woody biomass from Namibia’s savanna and places it in specially designed underground storage chambers. The chambers limit oxygen and moisture, which slows decomposition and keeps the carbon stored.

The method does not use an energy-intensive carbon capture process. It also does not turn the biomass into biochar. Instead, the wood remains largely intact while the storage system prevents it from breaking down.

Senken says this can reduce the cost and energy needs of the removal process compared with some other engineered carbon removal methods.

The IPCC defines carbon dioxide removal as human activities that remove CO2 from the atmosphere and store it for a long period. It also stresses that carbon removal should support, rather than replace, deep emissions cuts.

• RELEVANT: Biomass Gets a Boost: What the CREST Act Means for Carbon Removal

Namibia Turns Bush Encroachment Into a Carbon Opportunity

Carbonsate’s project is located in the savanna around Otjiwarongo, Namibia. It focuses on encroaching bush, where woody plants have spread across grassland. Carbonsate says this can reduce biodiversity, limit grass growth, lower groundwater recharge, and reduce the productivity of grazing land.

The company selectively removes this excess bush as part of land management. Instead of burning the harvested wood or allowing it to decay, it stores the biomass underground. This creates a link between carbon removal and land restoration.

Carbonsate says the work can help restore grasslands, improve biodiversity and support healthier range lands. It also works with local landowners, farmers and service providers on harvesting, transport, site preparation and monitoring.

The approach therefore aims to deliver both carbon removal and local environmental benefits.

Project Uses Puro.earth Certification

The Carbonsate Namibia project has passed a third-party facility audit under Puro.earth‘s certification system and has received carbon removal certificates, or CORCs.

Puro.earth lists the project under its Terrestrial Storage of Biomass methodology. The standard requires projects to measure the amount of carbon removed and verify the results. Puro.earth says certified projects must pass facility and output audits before receiving CORCs.

The Carbonsate project has a minimum durability period of 100 years. The company uses engineered storage systems, along with a monitoring, reporting, and verification system, to track storage conditions.

Puro.earth‘s project listing shows that Carbonsate issued 799 CORCs in 2025. Senken says the project is scheduled to deliver about 10,000 credits in 2026.

That difference is important. The 50,000 tonnes covered by the deal are contracted future removals, not 50,000 carbon credits already issued.

Monitoring Is Key to Long-Term Storage

Biomass storage depends on keeping the stored material stable over time. Carbonsate uses sensors to monitor its storage sites. It also uses on-site measurements to track gas emissions and check storage performance.

Puro.earth says the project stores the biomass in engineered pits and covers it to limit oxygen and moisture. Namibia’s dry climate also supports the storage approach because of its low rainfall and high evaporation rates.

The need for monitoring is important because carbon removal is only useful if the stored carbon stays out of the atmosphere.

The Intergovernmental Panel on Climate Change (IPCC) notes that carbon removal methods differ in their storage periods, risks, and environmental effects. It also says strong governance is needed to manage these risks and maintain durable storage.

• For biomass storage, this makes the choice of feedstock, storage design, and monitoring system especially important.

Carbon Removal Market Moves Toward Longer Deals

The Senken-Carbonsate agreement also shows how buyers are helping new carbon removal methods to scale. Removal projects often need investment before they can produce large volumes. Multi-year offtake agreements give developers a clearer source of future demand.

The broader durable carbon removal market is growing, but supply remains limited. CDR.fyi reported 2.3 million tonnes of durable carbon removal contracted in the first quarter of 2026, a record first quarter. It also recorded 145,000 tonnes delivered during the quarter.

Biomass-based methods were a major part of that market. Biochar alone accounted for 93% of durable carbon removal contracted in Q1 2026, according to CDR.fyi.

Biomass storage remains a much smaller market. Senken describes it as being at an early commercial stage, with supply concentrated among a small number of projects. That makes large multi-year commitments important for developers trying to move from early projects to larger operations.

A New Test for Biomass Carbon Removal

The 50,000-tonne Senken-Carbonsate agreement gives Namibia’s biomass storage sector a major new commercial commitment. The project combines excess bush removal, underground biomass storage, and long-term monitoring. Its Puro.earth certification also gives buyers a defined framework for measuring and verifying carbon removal.

However, scaling the method will depend on more than buyer demand.

Carbonsate must expand its storage capacity while maintaining the quality and monitoring standards behind its credits. The project must prove that the stored biomass stays stable. It should also show that carbon removal is significant, even after considering emissions from harvesting, transport, storage, and monitoring.

For Senken, the deal secures future removal volumes for corporate buyers. For Carbonsate, it provides demand that can help expand its Namibia operations.

If the project delivers the contracted volumes and maintains its removal standards, the agreement could help show how biomass storage can move from an emerging carbon removal method to a larger commercial-scale supply.

• READ MORE: Beyond Carbon Credits: How KARBNZ Global Is Building a Natural Capital Platform Around Forests, Biomass, and Biochar

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Mining giant BHP delivered stronger-than-expected financial results for FY2026 as surging copper prices drove growth and lifted shareholder returns. However, the company also reported that its operational emissions edged higher.

Copper played a bigger role in the result. BHP reported that copper made up over half of its underlying operating earnings for the first time. The company also produced around 2 million tonnes of copper for the second straight year.

At the same time, BHP’s FY2026 Annual Report shows that its operational greenhouse gas emissions rose slightly year-on-year on an adjusted basis. The company reported 9.4 million tonnes of CO2e (MtCO2e) in Scope 1 and Scope 2 emissions from its operated assets.

BHP has cut adjusted operational emissions by 33% from its FY2020 baseline. However, it still finds some emissions hard to eliminate. The miner says it might need 3 million to 5 million tonnes of carbon credits to help tackle residual emissions and meet its 2050 operational net-zero target.

The contrast highlights BHP’s two-track challenge: growing its business around copper and other future-facing commodities while cutting emissions across a large and complex mining portfolio.

Copper Powers BHP Profit and Dividend Growth

BHP’s strong FY2026 financial results give the miner more room to invest in growth and its long-term decarbonization plans.

The company reported US$13.2 billion in underlying attributable profit, a 30% increase from FY2025 and above the US$12.66 billion analyst consensus cited by Reuters. BHP also reported US$9.8 billion in attributable profit for the year.

Copper drove much of the improvement. Copper, including gold and uranium byproducts, generated US$18.19 billion in operating earnings, compared with US$14.53 billion from iron ore, making copper BHP’s largest earnings contributor.

• RELATED: Copper Prices Surge Past $14,800: Will New Mines Help Ease the Supply Crunch?

BHP declared US$1.72 per share in dividends, its highest payout in four years. The company said total shareholder dividends reached 172 US cents per share, or US$8.7 billion, equal to 66% of underlying attributable profit.

The stronger result comes as BHP increases its focus on copper, which it expects to play a growing role in the global energy transition. BHP shares rose 2.65% to A$63.85 on August 18. Investors responded positively to the stronger-than-expected FY2026 results and higher dividends.

However, the Australian miner also reported rising GHG emissions in its 2026 Annual Report.

BHP’s Operational Emissions Tick Higher

BHP’s adjusted operational emissions fell from 14.1 MtCO2e in FY2020 to 9.4 MtCO2e in FY2026, a 33% reduction from its baseline. However, progress was not linear.

BHP reported higher emissions at BHP Mitsubishi Alliance (BMA) because of increased material movement and more methane-intensive mining areas. Emissions at New South Wales Energy Coal (NSWEC) also increased because of higher production and a revised methane emissions model.

Stable performance at Western Australia Iron Ore and Escondida helped balance some of those increases. The temporary suspension of Western Australia Nickel also contributed.

BHP also changed how it calculates Scope 2 emissions at its Australian operations by using a national residual mix factor (RMF) where available. Applying the new method changed the reported FY2025 comparison from a 36% reduction against the FY2020 baseline to 34%.

That makes the adjusted year-on-year comparison important. BHP says FY2026 emissions were 1% higher than FY2025 after applying the adjustments used for its climate targets.

Scope 3 Emissions Dwarf BHP’s Operational Footprint

BHP’s wider emissions footprint is much larger when it includes its value chain. The company reported 429.0 MtCO2e of Scope 3 emissions in FY2026, up 1% from 423.7 MtCO2e in FY2025. Most of those emissions come from customers processing BHP’s products.

The downstream processing of iron ore and steelmaking coal accounted for 85% of reported Scope 3 emissions. Energy coal combustion contributed another 10%, while direct suppliers accounted for 2% and upstream and downstream shipping for 1%.

BHP has a separate long-term goal to reach net-zero Scope 3 emissions by 2050. The company says reaching that goal is uncertain. It relies on customers using lower-emissions steelmaking technologies.

Its 2050 operational net-zero goal is different. That goal covers only Scope 1 and Scope 2 emissions from BHP’s operated assets.

BHP May Need 3–5 Million Carbon Credits

The biggest new carbon market figure in the report comes from BHP’s long-term operational emissions pathway. BHP says it intends to reduce emissions through structural measures wherever technology is mature, commercially available, and viable. It expects carbon credits to address emissions that remain after those measures.

The company now estimates that 3 MtCO2e to 5 MtCO2e of emissions could remain in CY2050. BHP says it would need carbon credits to offset those emissions and achieve its net-zero operational goal.

• That range translates into roughly 3 million to 5 million carbon credits, as each credit represents one tonne of CO2e.

BHP stresses that this is an estimate, not a firm future purchase commitment. The company says its estimate could change as low- and zero-emissions technologies improve.

This distinction matters. BHP does not plan to use offsets as a substitute for cutting its operational emissions. Instead, it expects credits to cover the residual emissions that it cannot eliminate.

Technology Delays Could Increase Reliance on Offsets

BHP says diesel displacement remains its largest future lever for cutting operational emissions. The company has made progress on renewable electricity. It reported 80% renewable electricity usage across its operated assets globally. BHP also says its BMA mines in Queensland moved to 100% renewable power from July 2026.

The harder challenge is replacing diesel in heavy mining equipment.

BHP began trials of battery-electric haul trucks and locomotives during FY2026. At Jimblebar in Western Australia, it started testing two Caterpillar battery-electric haul trucks in March 2026. It also began trials involving two Wabtec FLXdrive battery-electric locomotives at Port Hedland.

However, BHP does not expect broad deployment of battery-electric mining systems across its operations until after FY2030. The company says some technologies needed for diesel displacement remain under development. It also faces challenges around charging infrastructure, power systems, mine planning, maintenance, and workforce skills.

BHP expects its continued operational decarbonization work to require at least US$4 billion of incremental nominal spending in the 2030s.

Methane Remains Another Challenge

Diesel is not BHP’s only difficult emissions source. Methane accounted for 12% of BHP’s Scope 1 and Scope 2 emissions in FY2026. The company says it can capture and abate drainage methane at its underground BMA steelmaking coal mine when it is safe and practical to do so.

Open-cut mines present a harder problem. BHP says no proven technology can currently abate fugitive methane from open-cut mines at scale. The company started a proof-of-concept trial for novel methane gas drainage at an operating open-cut mine during FY2026. It will continue that work in FY2027.

These technology gaps help explain why BHP expects some residual emissions to remain in 2050.

Carbon Credits Could Become BHP’s Net-Zero Backstop

BHP’s latest financials and emissions data show both progress and a growing challenge. The company has already cut adjusted operational emissions by 33% from FY2020. It has also expanded renewable electricity use and started testing technologies that could eventually replace diesel.

Yet, emissions increased slightly in FY2026, while some of the technologies needed for deeper cuts remain immature. That leaves carbon credits as part of BHP’s long-term pathway.

The company now thinks that 3 million to 5 million tonnes of residual emissions might still exist in 2050. This could lead to a future need for a similar amount of carbon credits.

For carbon markets, the figure is significant. It shows how even major miners pursuing large operational reductions may still depend on high-quality carbon removals or other eligible credits to address hard-to-abate emissions.

The next decade will determine how large that gap ultimately becomes. If electrification, renewable power and methane technologies advance faster than expected, BHP could reduce its reliance on offsets. If technology deployment falls short, the company’s need for carbon credits could grow.

• READ MORE: BHP Delivers Record Iron Ore Output While Boosting Copper for the Clean Energy Transition

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NexGen Energy has started building its Rook I uranium project in Saskatchewan, Canada. This marks a significant step toward creating one of the largest new uranium mines in the world.

It was reported that the C$2.2 billion ($1.6 billion) project focuses on the high-grade Arrow deposit. Once completed, Rook I is expected to produce around 30 million pounds of uranium each year. This would place it among the top uranium producers globally and make NexGen a key supplier for the growing nuclear energy market.

Uranium demand is rising sharply. Nuclear power is gaining traction as countries seek reliable, low-carbon electricity. The rapid growth of artificial intelligence is also increasing energy needs, NexGen revealed in a post on X.

Rook I Moves to Construction Phase

Major earthworks and surface infrastructure are in progress. The company has commissioned a 3,000-foot airstrip and completed expanded site accommodations, which are now in use.

NexGen plans to finish the full 5,840-foot airstrip by the end of 2026. Shaft development is set to begin in 2027.

Building the underground mine and processing facilities will take about four years. The project will use conventional underground mining, followed by processing the ore into uranium concentrate, known as yellowcake.

Importantly, the project has cleared major regulatory hurdles. The Canadian Nuclear Safety Commission approved the environmental assessment in March and granted NexGen a construction license for Rook I.

This approval allows the company to move forward after years of exploration and regulatory work.

A High-Grade Uranium Deposit

The Arrow deposit gives Rook I a major edge: exceptionally high uranium grades.

• The 2021 feasibility study outlined probable reserves of about 239.6 million pounds of uranium at an average grade of 2.37% U3O8.
• NexGen’s total measured and indicated resource stands at about 256.7 million pounds, including the reserves, plus another 80.7 million pounds in inferred resources.

These grades are well above the global average for uranium deposits.

As a result, the project needs to move less rock to produce a large amount of uranium. NexGen estimates only about three trucks per day will be needed to feed the mill, while roughly 1.5 trucks per day will remove processed material.

This relatively low movement could reduce the project’s infrastructure needs and environmental impact compared to lower-grade mining operations.

The geology supports conventional underground mining. Unlike some deposits that need complex methods like in-situ recovery, Arrow is located in hard rock at depth. The company says this setting allows for a more predictable mining operation.

A Large Production Profile

The scale of Rook I is critical for the uranium market.

The 2021 feasibility study outlined an 11-year mine life and projected total production of about 233.6 million pounds of yellowcake. It estimated an after-tax net present value of C$3.5 billion at an 8% discount rate, a 52.4% internal rate of return, and a payback period of less than one year.

The planned annual production of about 30 million pounds would exceed the licensed capacity of Cameco’s McArthur River-Key Lake operations, which stands at 25 million pounds.

Cameco expects to produce between 14 million and 16.5 million pounds from those operations in 2026.

Thus, Rook I could significantly boost global uranium supply once it begins production.

Nuclear Power Is Driving Long-Term Uranium Demand

The timing of this project is crucial.

Around 80 nuclear reactors are under construction worldwide, adding about 88 gigawatts of new capacity. This could increase global nuclear capacity by roughly 20% by the early 2030s.

At the same time, 38 countries aim to triple global nuclear capacity by 2050.

If achieved, global nuclear capacity could rise from around 380 GW to about 1,200 GW. This expansion would require a substantial increase in uranium supply.

Artificial intelligence could add to the demand.

Data centers need a lot of electricity, and the global AI buildout is speeding up. If the U.S. meets its AI-related electricity needs entirely with nuclear power, uranium demand could reach as much as 60 million pounds annually by 2030, according to NexGen’s estimates.

This highlights the scale of the challenge facing the uranium industry.

The Supply Problem Could Be Even Bigger

Uranium supply cannot quickly respond to sudden demand increases.

Developing a new mine can take 15 to 20 years from discovery to production. Today’s investment decisions will affect uranium supply well into the 2030s and 2040s.

NexGen forecasts a potential uranium supply deficit of about 335 million pounds per year by 2040. Meeting projected demand of roughly 530 million pounds would require mine production to triple from current levels.

These numbers show why new projects like Rook I are increasingly important.

The industry has mined about 8.6 billion pounds of U3O8 since uranium mining began. Over the next 25 years, the world could need about 7.3 billion pounds.

In short, the nuclear industry could consume nearly as much uranium in the next quarter-century as it has mined in the last 80 years.

Rook I Could Support a Low-Carbon Energy System

The project’s potential goes beyond just uranium production.

Nuclear power generates electricity with very low operational carbon emissions. Therefore, more uranium supply could help expand nuclear generation as countries aim to cut emissions while ensuring reliable electricity.

• NexGen estimates Rook I could produce enough uranium to power around 46 million homes with carbon-free electricity.
• The company also estimates that this nuclear generation could displace over 300 million tonnes of CO2 annually, equivalent to taking nearly 70 million cars off the road each year.

These figures depend on how the uranium is used and the assumptions behind the calculations. Still, they show why high-grade uranium projects are gaining attention as nuclear power returns to global energy discussions.

For NexGen, the next challenge is execution.

With construction now underway, Rook I is shifting from long-term development to a potential new source of uranium supply. If NexGen delivers on time, the mine could start production just as nuclear power, AI-driven electricity demand, and energy security concerns put more pressure on the global uranium market.

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