European airlines are pushing back against a European Commission plan to extend the EU Emissions Trading System to international flights departing the bloc. Carriers including Lufthansa, Air France-KLM, and IAG say the move could add over 5 billion euros in annual costs and raise ticket prices on long haul routes to North America, Asia, and the Middle East. They argue the existing UN backed CORSIA offset program already covers international aviation emissions. The European Commission argues that CORSIA offsets are too weak to drive real decarbonization and that direct carbon pricing under the ETS creates stronger incentives for airlines to invest in sustainable aviation fuels and more efficient aircraft. The review is expected next month as part of the EU’s 2030 climate target to cut emissions by 55% from 1990 levels. Aviation accounts for about 4% of EU greenhouse gas emissions and is one of the fastest growing sources. The outcome will affect carbon allowance demand, sustainable aviation fuel investment timelines, and the broader debate over regional versus global carbon pricing for hard to abate sectors. If the expansion goes ahead, airlines will need to buy additional EUAs for outbound long haul flights, increasing compliance costs and potentially accelerating fleet modernization.
