Airlines resist wider EU carbon levy

Europe’s largest airline groups have warned Brussels that extending carbon charges to long-haul international flights would lift fares, raise cargo costs and deepen a dispute over how aviation should pay for its climate impact.

Chief executives from major carriers including Air France-KLM, IAG, Lufthansa, Ryanair, easyJet, TUI and AirBaltic have urged European Commission President Ursula von der Leyen not to widen the European Union’s Emissions Trading System to cover flights departing the bloc for destinations outside Europe. The intervention comes as the Commission prepares an aviation climate review due in July, with officials weighing whether the current carbon market leaves too much of the sector’s pollution outside European pricing rules.

At present, the ETS applies mainly to flights within the European Economic Area, requiring airlines to buy allowances for carbon dioxide emissions. The system caps the number of permits available and tightens supply over time, creating a price signal intended to push airlines, power producers and industrial companies towards lower emissions. International flights to and from Europe have largely remained outside the scheme under temporary exemptions linked to the UN-backed Carbon Offsetting and Reduction Scheme for International Aviation, known as CORSIA.

Airline executives argue that extending the EU system to extra-European routes would impose a unilateral cost on carriers, passengers and exporters while weakening a global framework that has taken years to build. Their letter says higher carbon costs would feed directly into ticket prices and freight rates, with European travellers and businesses bearing the burden. Airlines also contend that a wider ETS could create competitive distortions if non-European hubs attract traffic from passengers seeking cheaper connecting routes outside the bloc’s charging system.

Brussels faces pressure from climate campaigners and some policymakers to close what they see as a major gap in aviation regulation. Flights departing European airports generated emissions above pre-pandemic levels in 2025, helped by strong demand for leisure travel, the recovery of long-haul networks and growing air freight activity. Environmental groups argue that intra-European routes account for only a minority of aviation emissions linked to Europe, leaving long-haul flights with a lighter carbon burden despite producing a large share of the sector’s climate impact.

The Commission’s review is expected to assess whether CORSIA is sufficient to meet Europe’s climate objectives. CORSIA requires airlines to offset growth in international aviation emissions above a baseline, but it does not impose absolute emissions cuts. Critics say the scheme relies heavily on offset credits whose quality can vary, while the EU carbon market sets a clearer and more expensive emissions price. Airlines counter that aviation is global by nature and should not be regulated through overlapping regional systems.

The dispute is unfolding as carriers face a wider cost squeeze. Fuel remains the industry’s largest operating expense, sustainable aviation fuel is still far more expensive than conventional jet fuel, and aircraft delivery delays have limited airlines’ ability to replace older fleets with more efficient models. Labour, maintenance and airport charges have also risen across several European markets. Airline groups say adding another layer of carbon cost would make it harder to invest in fleet renewal and cleaner fuels.

Climate policy advocates reject that argument, saying higher carbon prices can accelerate investment by making inefficient operations more expensive and cleaner alternatives more attractive. Sustainable aviation fuel mandates are already being phased in across Europe, with requirements set to rise over the coming decades. Even so, supply remains limited, and airlines have warned that mandates without adequate production capacity could push up costs without delivering emissions cuts at the pace governments expect.

The Commission has defended stronger pricing as a way to ensure equal treatment between short-haul and long-haul flights. Short-haul carriers operating within Europe already face ETS costs, while long-haul routes can produce far higher emissions but remain largely outside the system. Officials are also mindful of the bloc’s wider climate targets, including the need to cut greenhouse gas emissions sharply by 2030 and move towards climate neutrality by 2050.