Download documents
Download briefingBackground
The aviation industry is responsible for an estimated 4% of historic global warming, potentially reaching 9% when considering all climate impacts. One of the hardest sectors to decarbonise, it has no credible plan to reach net zero by 2050. Roughly 60% of its total CO2 emissions, those from flights between the EEA and non-EEA countries, have remained outside the EU ETS.
This exclusion dates back to 2012 when the EU adopted the so-called “stop the clock” derogation, suspending the application of the ETS to extra-EEA flights to give the International Civil Aviation Organization (ICAO) time to agree on a global measure that became the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Intended as temporary, the derogation has been in place since.
The 2026 Commission’s assessment confirmed that CORSIA is not an effective mechanism for reducing emissions from international aviation. Instead of addressing this gap by bringing all EEA departing flights into scope from 2027, the Commission has proposed to extend the EU ETS only to flights within 5,000 km of Frankfurt, from 2029, leaving the most polluting long-haul routes unpriced.
What’s covered in the briefing?
This briefing sets out how EU co-legislators can strengthen the Commission’s proposal. Specifically, it explains how the EU should use the EU ETS revision for aviation to:
- Make the Paris Agreement temperature goals achievable: The briefing examines the proposal to extend the EU ETS from 2029 to flights departing the EEA to destinations in third countries within 5,000 km of Frankfurt, evaluating how exempting long-haul routes to destinations like the US and China defers full-scope coverage and relies on ICAO’s CORSIA until at least a further review in 2032.
- Ensure that price increases are fair and can be communicated effectively: The briefing reviews the proposal to integrate business flights into the EU ETS under the polluter-pays principle, evaluating the reliance on upcoming implementing acts to define ‘business flight’ and establish the list of covered aircraft to avoid regulatory loopholes.
- Generate revenues for Member States and EU innovation: The analysis evaluates the requirement directing at least 50% of auction revenues toward ETS sector decarbonisation, while scrutinising the shift from a mandatory to a discretionary spending obligation for remaining revenues and the risk of fossil-fuel lock-in.
- Meet the EU’s climate finance commitments: The brief examines how domestic revenue ring-fencing could restrict financial contributions to vulnerable third countries under the Paris Agreement, evaluating the need for dedicated earmarks for international climate finance.
- Support the most ambitious EU alternative fuels and technologies: The briefing details the extension of allowances to battery-electric propulsion and the phase-out of waste oils, while assessing the impact of lowering price-differential support for renewable synthetic e-fuels from 95% to 60%.
- Tackle the other half of aviation emissions – non-CO₂: The briefing analyses the proposal’s voluntary scheme granting allowances for contrail forecasting tools between 2028 and 2033, evaluating whether software tracking without mandatory rerouting delivers genuine climate mitigation.
Our recommendations
International scope
- Extend the scope to all EEA departing flights.
- Apply the extension from 2027.
Business flights
- Ensure all business flights are included.
ETS revenues
- Ensure there are stringent eligibility criteria applied to the revenue spending by Member States for their 50% mandated share for ETS contributors.
- Require Member States to allocate the protected 50% of ETS revenues across ETS-covered sectors in a way that reflects their respective emissions, contribution to ETS revenues and decarbonisation needs.
- Amend the revenue-recycling provisions to ensure that the remaining ETS revenues remain subject to a binding obligation to fund climate action, rather than giving Member States discretion over whether these revenues are used for climate spending.
Climate finance
- Introduce a binding requirement in the ETS Directive mandating that Member States earmark a defined share of international ETS revenues for international climate finance.
Alternative fuels allowances
- Introduce a binding requirement in the ETS Directive mandating that Member States earmark a defined share of international ETS revenues for international climate finance.
Non-CO2 emissions
- Replace the voluntary allowance reward with a phased fee on airlines unless they act on their contrail impacts.
