European airlines are subject to carbon markets that are riddled with exemptions. Right now, airlines only have to pay for emissions for flights within the EEA, the UK and Switzerland, meaning that long-haul flights – which are the most polluting – are exempt from carbon pricing. Airlines also receive free allowances for their European flights, further reducing the price of CO2.
Extending the scope of Europe’s carbon markets to all departing flights would deliver significant climate benefits and generate revenues. T&E estimates that an extension of the EU and UK ETS could have generated an additional €7.5 billion euros in 2024 if extra-European emissions were priced, which could have supported the development of green technologies like sustainable aviation fuels (SAFs) and electric and hydrogen aircraft.