- The European Commission is reviewing whether to expand its Emissions Trading System to cover flights departing the EU. Currently, only flights within Europe are subject to the carbon market.
- Senior official Polona Gregorin said the extension would ensure equal treatment for all routes, but the move risks backlash from non‑EU partners such as the US, which opposed a similar proposal in 2011.
- International flights are covered by the UN’s CORSIA offsetting scheme, which a 2021 study for the Commission found unlikely to deliver emission reductions and could undermine EU climate goals.
The European Commission has launched a review that could fundamentally reshape aviation’s climate obligations. Under the current EU Emissions Trading System (ETS), airlines must buy carbon permits for flights within the European Economic Area.
Flights departing the EU to destinations outside Europe fall under the International Civil Aviation Organization’s CORSIA offsetting scheme, which allows airlines to offset the growth in their emissions through carbon credits instead of reducing emissions outright. Critics argue CORSIA is too weak and undermines the EU’s climate ambitions.
Polona Gregorin, a senior official in the Commission’s climate department, said the review will explore extending the ETS to international flights departing Europe. Doing so would impose a carbon price on a much larger share of aviation emissions and ensure fair treatment between carriers operating intra‑EU and long‑haul routes.
The Commission is studying how to design such a system to avoid double regulation and legal challenges. However, any extension risks reigniting trade disputes.
In 2011, the EU attempted to include international aviation in its carbon market and faced fierce opposition from the US, China and other countries. The move was ultimately watered down under political pressure.
Level playing field
The review comes amid broader changes to the ETS. Brussels is weighing whether to grant heavy industries more free carbon permits for longer and slow the rate of emissions cuts during the 2030s. Member states and industrial lobbies have warned that rapidly tightening carbon caps could undermine Europe’s competitiveness as the Iran war drives up energy costs.
Extending the ETS to international flights would raise the cost of long‑haul travel and could force airlines to invest in sustainable aviation fuels or pay more for carbon allowances – costs that may be passed on to passengers.
Environmental groups support the move as a necessary step to align aviation with the bloc’s 2040 climate goals. They argue that without a strong price signal, airlines will not scale up cleaner fuels or efficiency improvements. The Commission’s analysis may also consider the environmental benefits of harmonising the EU and UK carbon markets, given that the UK runs its own emissions trading scheme post‑Brexit.
For UK carriers, an EU extension could mean higher operating costs on flights from London to Asia or North America. Conversely, aligning policies could simplify compliance for airlines operating across both jurisdictions.
While any legislative changes are likely years away, the review signals that Brussels is prepared to revisit aviation’s climate obligations. It underscores the tension between Europe’s climate ambition and concerns about competitiveness and trade relations.
UK industry should watch for details on how aviation emissions will be priced across borders and the potential impacts on fuel demand, sustainable aviation fuel development and airline investment decisions.
