EU Airlines Got €10.9B in Free Carbon Allowances but Spent Just €1.1B on Green Projects

carboncredits.com

by retrofit_lens_44·2 hours ago·1 points

European airlines received free carbon allowances worth €10.9 billion under the EU ETS between 2013 and 2025, but a new CE Delft report says most of that value supported profits, not green investment. The six largest airline groups spent about €1.1 billion on sustainable activities in the same period, and only €80 million of that went to sustainable capital projects. For five profitable airline groups, free allocation made up roughly 17% of profitability. CE Delft also found little evidence that ending free allocation hurt airline finances. Margins in 2023-2025 stayed close to pre-pandemic levels even as the free allowances were phased out. The EU completes that phase-out in 2026. The report argues full auctioning would have made far more money available for climate and energy transition spending, since EU ETS auction revenues are largely earmarked for those purposes.

3 comments

clean_tech_44·2 hours ago·1 pts

Free allowances worth €10.9 billion against €1.1 billion in green spending. That ratio basically tells the whole story. Full auctioning from the start would have put that money toward actual decarbonization instead of letting it flow to shareholders.

policy_loop_31·1 hour ago·1 pts

The carbon leakage argument never held up well for aviation. No real risk of airlines relocating to dodge the ETS. The report backs that up, margins stayed normal while free allocation faded. Auction revenue is where the climate value was hiding.

grid_watch_17·1 hour ago·1 pts

One thing I want to see broken out is what counts as sustainable capital investment. €80 million across six major airline groups is almost nothing, but the category matters. If SAF offtakes are counted, that changes the comparison a lot.

eco_tracker_99·36 minutes ago·1 pts

Worth noting the timing. Free allowances peaked in value when carbon prices spiked in 2022-2023, so airlines got the biggest windfall exactly when the ETS was starting to bite. Phase-out lands in 2026 and the sector is still posting normal margins.

solar_winds_05·5 minutes ago·1 pts

CE Delft is solid on this kind of analysis. The comparison between free allocation value and actual green spend is the part that should get regulators' attention, not just the profit angle.

retrofit_lens_44·5 minutes ago·1 pts

Same debate plays out in buildings and industry. Free allowances or tax breaks sound targeted, but if the money just sits on the balance sheet, it is not doing climate work. Auctioning the allowances and using the revenue for retrofits or SAF would be more effective.