The European Union (EU) could raise up to ten times more revenue for climate action by overhauling how it charges the aviation industry for its climate impact, according to a new study, announced on Monday.

Commissioned by non-profit watchdog and research organization Carbon Market Watch and conducted by French consultancy Carbone 4, the study models four scenarios for revising the EU Emissions Trading System (EU ETS) in 2026.

Under current rules, just 15% of aviation’s climate impact will be priced in 2026, leaving significant pollution untaxed.

According to Bastien Bonnet-Cantalloube, aviation policy expert at Carbon Market Watch, this is a missed opportunity.

“It is scandalous that the aviation industry has skirted paying for its climate impacts for so long,” he said in a comment to the report announcement.

Since 2012, the EU ETS has only covered flights within the European Economic Area (EEA).

Expanding it to include all departing flights would at least double the current revenue from aviation emissions.

Reversing the controversial ‘Stop the clock’ exemption—introduced in 2012 to temporarily limit international flight coverage—could quadruple that amount.

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The report also highlights the climate-warming effects of aviation emissions, different from carbon dioxide (CO2), like contrails and nitrous oxide (N2O), which are currently unpriced but could triple aviation’s true climate cost.

Private jets are another blind spot, with 67% of their emissions currently exempt from EU ETS coverage.

Revenue raised could support the decarbonization of aviation through cleaner fuels like e-kerosene and fund upgrades to Europe’s rail network as a low-carbon alternative to short-haul flights.

With the EU facing a $1.3 trillion climate funding gap by 2035, researchers say now is the time to act.

The upcoming EU ETS review has the potential to steer the aviation sector toward decarbonization while also increasing revenue to support the EU’s climate initiatives, Bonnet-Cantalloube concluded.

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