The 2026 EU ETS Revision: What It Means for Aviation

On 4 June 2026, the Destination 2050 alliance, representing Airlines for Europe (A4E), ACI EUROPE, ASD, CANSO Europe, and ERA, sent a joint open letter to European Commission President Ursula von der Leyen, EVP Stéphane Séjourné, and Commissioners Hoekstra and Šefčovič. The letter addresses the upcoming revision of the EU Emissions Trading System (EU ETS) for aviation, expected in Q3 2026, and puts forward three core demands: maintaining the current geographical scope of the ETS limited to intra-EEA flights, reinvesting aviation ETS revenues into sector decarbonisation tools such as SAF offtake support and R&D, and reorienting the ETS Innovation Fund to better reflect aviation’s specific needs.

Central to the debate is the so-called “stop the clock” mechanism, a derogation that has exempted extra-EEA international flights from EU carbon costs for over a decade, providing space for ICAO to develop its own global scheme, CORSIA. This exemption expires at the end of 2026, meaning that without legislative action, the ETS would automatically expand to cover all flights departing EU airports from January 2027. The Commission was due to submit a CORSIA environmental integrity report to Parliament by 1 July 2026, but as of early June it had not yet been filed.

The aviation industry argues that a unilateral expansion of the ETS would not deliver net climate benefits, but would instead divert traffic to non-European hubs and expose European carriers to competitive disadvantage. The alliance invokes the 2012 precedent, when a similar expansion attempt led the US Congress to ban American airlines from participating and triggered threats of billion-dollar retaliatory measures against Airbus contracts. Given today’s heightened geopolitical tensions, the industry warns that retaliation could be even more severe, and advocates instead for a strengthened CORSIA as the single global carbon pricing framework for international aviation.

Environmental organisations and civil society groups hold sharply different views. Transport & Environment (T&E) estimates that 68% of emissions from European departing flights went unpriced in 2025 precisely because of the ETS scope limitation, and calculates that extending the system to all departing flights could raise annual revenues from €3 billion to potentially €10 billion. T&E and Carbon Market Watch consider CORSIA to be environmentally insufficient, citing its inflated emissions baseline, reliance on questionable carbon offsets, and misalignment with Paris Agreement targets. A coalition of over 20 industry and civil society organisations has explicitly called on the EU to include all departing flights in the ETS, describing the 2026 review as “a critical opportunity to correct a longstanding gap in European climate policy”.

At the institutional level, the rules agreed in December 2022 already established that if the Commission’s CORSIA assessment finds the scheme insufficiently aligned with the Paris Agreement, the Commission is legally obligated to propose an expansion of the ETS scope to cover departing flights. The European Parliament is tracking the revision closely under its legislative train, and the EU Climate Law, formally adopted on 11 March 2026, reinforces the overarching 2050 net-zero trajectory. The Commission’s pending CORSIA report, expected by 1 July 2026, will therefore be the pivotal document shaping whether the EU moves towards full-scope ETS coverage or preserves the current limited framework.

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