The European Commission has proposed extending its Emissions Trading System (ETS) to international flights arriving in Europe from destinations within 5,000 km starting in 2029. Routes like Frankfurt-Dubai and Frankfurt-Istanbul would be included, while longer sectors such as Frankfurt-Tokyo and flights from the US and China would be exempt. The move aims to address competitive imbalances with Gulf airlines and curb rising aviation emissions, the only major sector where emissions are still increasing. Under the revised ETS, industrial companies would retain free emissions allowances beyond 2030 but must publish board-approved decarbonisation investment plans to receive them. Eighty percent of free allowances would be given upfront, with the remaining 20 percent released only after investments and emissions reductions are delivered. The Commission also wants at least 50% of national ETS revenues reinvested in covered sectors including aviation, maritime, and energy-intensive industry. The proposal responds to a legal obligation to consider expanding carbon pricing beyond intra-European flights if the ICAO CORSIA offsetting scheme is deemed insufficient by 2032. Critics warn against weakening the ETS due to fossil fuel interests, while supporters say the reform preserves investment certainty and aligns with the EU's 2040 climate target of 90% emissions reduction.
