The review of the European Emissions Trading System (EU ETS) would subject the transport sector to a limited but significant expansion of the scope of carbon pricing, particularly in aviation. According to the article, published on the basis of an analysis by Transport & Environment (T&E), the proposal would cover all flights departing for airports located within 5,000 kilometers of Frankfurt Airport, with the expansion due to begin in 2029.
This represents a change from the current situation, which does not cover a large share of long-haul flights. However, the proposal would not impose a carbon price on every flight departing from Europe; a flight from Paris to Dubai would fall within the scope, while the proposed rule would not cover a flight from Paris to New York. T&E presents this design as a compromise that expands coverage while avoiding airports in the United States and China, which could reduce the risk of geopolitical responses, and brings competing hubs such as Dubai, Doha and Istanbul into the system.
A Broader Scope, but the Pricing Gap Remains
The article estimates that the new scope would increase the share of aviation emissions departing from Europe that are subject to pricing from approximately 44% currently to nearly 59%. Coverage would begin to increase in 2029, but the use of allowances linked to sustainable aviation fuel (SAF) would reduce the proportion of emissions actually priced to approximately 57% that year.
The practical result is that nearly half of European aviation emissions would remain outside the carbon price even after the proposed expansion. T&E therefore does not view the proposal as a final solution, but as a first step, and calls for accelerating the expansion to cover all departing flights starting in 2028 instead of 2029. This part expresses the organization’s position and recommendation, rather than a final rule established in the article.
Why Does This Matter for Air Transport?
The analysis is based on a divergent trajectory among sectors of the European economy. Since the EU ETS was launched in 2005, emissions from sectors covered by the system have fallen by approximately 50%, while aviation emissions have increased by more than 30% over the same period. The article states that long-haul flights were among the main sources of uncovered emissions, making the impact of carbon pricing on aviation smaller than its impact on other sectors.
These figures indicate that expanding the system is not merely about adding air routes to a regulatory list, but about attempting to address a gap in a climate instrument that relies on a declining emissions cap and a carbon price. The article also links the continuation of the carbon price signal to long-term investment decisions in electricity, electrification and low-emission technologies.
Additional Measures for Private Aircraft and Aviation Effects
The proposed review is not limited to commercial flights within the 5,000-kilometer scope. The article states that it would introduce a price on the climate impact of private aircraft for the first time within the system, after these aircraft had remained largely outside the EU ETS. The European Commission’s proposal also includes free allowances for airlines that succeed in avoiding the formation of contrails that contribute to warming.
Including these non-CO2 effects represents an expansion in how aviation’s climate impact is measured, but the article provides no quantitative details on the expected scale of reductions or the mechanism for verifying airlines’ success in avoiding contrails. The effectiveness of this part therefore remains dependent on the design of the implementing rules, an open question that cannot be resolved by the available information.
What Does This Mean in Practice?
For European airlines and airports, expanding the scope could reduce the regulatory gap with competing hubs on routes such as Dubai, Doha and Istanbul, according to T&E’s assessment. For passengers and transport companies, bringing more flights into a carbon-pricing system could alter operating and investment incentives, but the article does not specify the impact on ticket prices.
At the European policy level, T&E advocates maintaining a strong and predictable emissions cap after 2030, while directing system revenues more strategically toward decarbonization, electrification, grids and clean technologies. The organization bases this position on the fact that the system has generated more than €230 billion in auction revenues since its launch, while Europe spends approximately €400 billion annually on fossil-fuel imports.
The key takeaway is that the EU ETS review concerns not only aviation, but also the balancing of three objectives: reducing emissions, protecting competitiveness and providing regulatory certainty for long-term investments. The article presents T&E’s position that weakening the system would not solve the industry’s problems, but could increase uncertainty and financing costs. However, the proposal’s final details, the date of its adoption, and the method for applying free allowances for sustainable aviation fuel and contrails still require monitoring before their actual impact can be assessed.