A provisional agreement on reform of the European Union’s Emissions Trading System (ETS) with regards to aviation has prompted a mixed reaction from airlines.

Notably, the deal announced on 6 December would see the ETS continuing to apply only to intra-European flights through to 2026, when the EU will assess whether ICAO’s global CORSIA offsetting scheme – which will cover international flights into and out of the bloc – is sufficient to meet the targets of the Paris Agreement.

The proposal states that should the EU deem CORSIA unfit for purpose in 2026, the ETS will be extended to cover all flights departing the bloc.

That prompted an angry response from Ryanair, with the giant European low-cost carrier again claiming that short-haul operators are being unfairly targeted by ETS costs. 

“While the richest Americans, Europeans and Asians on long-haul flights pay zero [environmental] taxes, Europe’s most price sensitive passengers and their families travelling on short-haul flights, many to the peripheral member states such as Ireland, Portugal, Spain, Greece, Malta, and Cyprus, and who have no alternative to flying, are forced to pay all of Europe’s ETS taxes, while they generate less than half of EU aviation emissions,” says Ryanair group chief executive Michael O’Leary.

“This is clearly unfair,” he adds.

Ryanair chief executive

Source: Ed Telling Photography

O’Leary has long said that the ETS should apply to long-haul flights

But airline industry association IATA had earlier in the week said during its Global Media Day that it continued to oppose the idea of the ETS applying to international flights out of the bloc, in line with its belief that CORSIA should be sufficient and that such measures risk putting local carriers at a competitive disadvantage.

Among other measures proposed by the EU, free carbon allowances for the aviation sector will be phased out by 2026, in line with the the bloc’s ‘polluter pays’ principle.

Industry body Airlines for Europe (A4E) says it is “extremely disappointed about the decision to phase out free ETS allowances”, stating that 2026 is “well before truly effective decarbonisation solutions will be available at the scale needed for them to be effective”.

”We must not forget that airlines have been paying for their emissions through the EU ETS since 2012,” A4E says. “The cost of compliance for the ETS is likely to have increased five times in size by 2025 to over €5 billion annually.”

On the other hand, however, A4E says that it “welcomes the decision to better support decarbonisation in civil aviation”.

It cites the “novel system” of sustainable aviation fuel (SAF) allowances announced in the proposal as a positive development, saying it will “help stimulate the rapid deployment of SAF”.

The deal will also create a new system for airlines to monitor, report and verify non-CO2 emissions and the climate effects of aviation.

Aviation’s reformed role in the ETS will from part of the sector’s contribution to the EU’s ‘Fit for 55’ initiative, setting in law its contribution to the target of reducing the bloc’s net greenhouse gas emissions by at least 55% by 2030.

The aviation agreement is still to be formally adopted by the EU.