On Tuesday night, Parliament and Council reached a provisional agreement on revising the EU Emissions Trading System (ETS) for aviation.
EU negotiators agreed to tighten the requirements for reducing carbon dioxide emissions from aviation in order to ensure that the sector contributes to reaching EU and global climate targets. The new law will integrate, into the revised ETS, ICAO’s agreed global market-based Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). In case of a negative evaluation of CORSIA’s progress by 1 July 2026, the Commission would be required to make a proposal to include in the scope of the EU ETS emissions of flights departing from an airport located in the European Economic Area (EEA) to a third country. As of 2027, flights to third countries not applying CORSIA will fall under the scope of the ETS.
Phasing out of free allocations by 2026
The deal includes an end to free allocations of allowances to the aviation sector by 2026, one year ahead of the timetable proposed by the Commission. To ensure the gradual phase out, a decrease of 25% in free allocations is foreseen for 2024 and 50% for 2025.
Promoting the use of sustainable aviation fuels
Negotiators agreed to reserving 20 million allowances, between 1 January 2024 and 31 December 2030, for commercial aircraft operators that increase their use of sustainable aviation fuels (SAF), such as hydrogen from renewable energy sources, renewable fuels from non-biological origin and advanced biofuels.
Addressing the impact of non-CO2 aviation emissions
After many years of calling for regulatory action, Parliament successfully negotiated a two-step approach to mitigate the impact of non-CO2 emissions, such as nitrogen oxides, sulphur dioxide and soot particles. Firstly, the Commission will establish and apply a framework for monitoring, reporting and verification (MRV) of non-CO2 aviation emissions as of 2025. Then, an evaluation will be made in 2027, followed by a legal proposal in 2028 extending the scope of the EU ETS to cover these emissions.
Other measures foreseen by the legislation:
- Revenues from auctioning 5 million allowances for aviation will be used through the Innovation Fund to support innovation, new technologies, including electrification in the sector;
- A derogation will be provided for emissions taking place until 2030 from flights between an airport located in an outermost region of an EU country and an airport located in the same country, and flights between airports located in an outermost region of the same EU country;
- As of 2023, aggregated annual emissions related data will be published in a user-friendly manner, in order to improve transparency.
Rapporteur Sunčana GLAVAK (EPP, HR) said:
“We have reached a political agreement that strikes a good balance between climate ambition in aviation and supporting the industry in this transition. I am extremely happy that we have been able to provide a tangible tool to help decarbonise the sector by earmarking 20 million SAF allowances. This is a key measure that will be available when sustainable aviation fuels are used. With this decision, we are stating that we stand with the sector through the process of the green transition. Furthermore, with the agreement we are improving transparency in aviation, which is an important step forward.”
Parliament and Council will have to formally approve the agreement before it can come into force.
ETS aviation is part of the “Fit for 55 in 2030 package”. Aviation accounts for 2-3% of global CO2 emissions and 3.7% in the EU. While the COVID-19 pandemic caused a temporary reduction of aviation traffic, projections point to an increase in European aviation activity of 44% by 2050 compared to 2019.
On 11 November 2022, an agreement was already reached on a temporary measure implementing member states’ notification to EU-based airlines of their offsetting for 2021 under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) of the International Civil Aviation Organisation (ICAO).