EU considers extending carbon pricing to international flights; airlines warn fares will rise

Europe's biggest airlines are pushing back against a European Commission plan to expand the EU Emissions Trading System (ETS) to cover international flights departing from the EU. Currently, the ETS only applies to flights within Europe. In a letter to Commission President Ursula von der Leyen, CEOs from Air France-KLM, IAG, Lufthansa, Ryanair, and 15 other carriers warned the move would raise ticket prices and hurt European passengers and businesses. The airlines argue the expansion undermines the UN's CORSIA offset scheme for international aviation. But Brussels is skeptical that CORSIA alone can cut emissions, citing a 2021 study that found the scheme unlikely to reduce emissions and potentially harmful to Europe's climate goals. The Commission says extending the ETS would ensure equal treatment across airlines and avoid disadvantaging short-haul carriers. The debate highlights a core tension in carbon market design: whether regional pricing should override global offset schemes to drive real emissions cuts, and who bears the cost. The Commission's review is due next month.