EU Plan to Expand Carbon Costs on International Flights Sparks Airline Opposition Over Fare Hikes

Major European airlines including Air France-KLM, IAG, Lufthansa, and Ryanair have sent a joint letter to EU Commission President Ursula von der Leyen opposing plans to extend the Emissions Trading System to cover flights departing the EU. The current scheme only covers intra-European flights. The CEOs warn the expansion would raise ticket prices and cargo costs for passengers and businesses. The airline group argues the move undermines the UN's CORSIA offset scheme, which requires airlines to buy CO2 offsets for emissions growth but does not mandate absolute cuts. The EU Commission contends that extending the ETS ensures equal treatment across carriers and that CORSIA alone is unlikely to deliver sufficient decarbonization. A 2021 study for the Commission warned the UN scheme could actually undermine Europe's climate goals. The debate highlights a core tension in carbon market design: whether to rely on offset-based systems or direct carbon pricing with binding caps. The EU's review is due next month and will determine whether international aviation faces tighter carbon costs.