EU ETS expansion could raise airline carbon costs for extra-EEA flights, European carriers warn

European airlines including Air France-KLM, Lufthansa, Ryanair, easyJet, and TUI are pushing back against a possible expansion of the EU Emissions Trading System to cover flights departing the European Economic Area for non-EEA destinations. Currently, only intra-EEA flights fall under the EU ETS, while long-haul routes are handled through CORSIA. The European Commission is reviewing CORSIA's effectiveness and could propose extending the EU ETS to departing extra-EEA flights if the global scheme is deemed insufficient. Airlines argue that adding carbon costs to long-haul departures would raise international airfares, increase cargo expenses, and pressure hub connectivity, especially for network carriers operating through major European airports like Paris, Amsterdam, Frankfurt, and Munich. Free allowances have already been cut, and full auctioning began in 2026, meaning carriers already face higher compliance costs. An expansion would create materially greater obligations on long-haul routes, potentially shifting costs to passengers and shippers. No final decision has been made, and the actual impact depends on allowance prices, competitive conditions, and any safeguards in the final proposal. The outcome will be closely watched by carbon market participants and anyone tracking how climate policy affects aviation and cross-border trade.