A Historic Leader at a Crossroads
For decades, the European Union has served as a beacon of progressive climate policy. The launch of its Emissions Trading System (ETS) in 2005 was nothing short of a global milestone. It created a blueprint for market-based emissions control and inspired similar systems across continents. Yet, amid this trailblazing effort, a key sector has consistently slipped through the regulatory net—international aviation.
This exemption, now entering its 13th year, has left a significant portion of aviation emissions unregulated, challenging the very integrity of the EU’s climate ambitions. With a renewed opportunity on the horizon to correct course, the question is no longer whether the EU can act—it is whether it will.
Understanding the Impact: Aviation and the Climate Equation
Aviation is often described as a hard-to-abate sector, but its climate impact is no less urgent. Responsible for around 4 percent of global climate effects annually, aviation’s true environmental footprint is significantly underrepresented in conventional metrics. While CO2 emissions are routinely measured and reported, non-CO2 effects—particularly contrails and soot particles at high altitudes—are frequently ignored. These have a warming potential equal to or greater than carbon emissions alone.
By focusing only on CO2, we have allowed a critical underestimation of aviation’s climate impact to persist. This distortion has contributed to the continuation of outdated policies and allowed flights departing the European Economic Area to remain largely unaccountable. Nearly 61 percent of European aviation emissions go unpriced as a result.
A Free Pass That Costs Billions
Between 2012 and 2023, international aviation emissions equivalent to those of Greece went unregulated within the EU framework. In monetary terms, the cost of exempting these emissions from the ETS is estimated at €26 billion in lost revenue. More than a policy gap, this represents a missed opportunity to invest in adaptation, innovation, and justice for the communities most affected by climate change.
While many policymakers hoped that global frameworks such as the International Civil Aviation Organization’s (ICAO) CORSIA would provide adequate regulatory cover, the results have been underwhelming. CORSIA’s reliance on voluntary offsets and high thresholds has effectively meant that airlines have not been required to take any meaningful climate responsibility thus far.
The Political Backdrop: Resistance and Retreat
The EU’s initial attempt to regulate international aviation emissions under the ETS in 2011 faced aggressive opposition from the United States and airline industry lobbies. Accusations of protectionism, legal threats, and diplomatic pressure culminated in a retreat from a fully inclusive ETS. Despite a favorable ruling from the European Court of Justice, the EU deferred action and granted what was to be a temporary exemption.
That exemption has since been extended repeatedly, locking in over a decade of climate inaction for a sector growing faster than almost any other.
A Global Challenge Demanding Regional Courage
While ICAO has an admirable track record in ensuring aviation safety, its climate credentials remain questionable. The infrequent and exclusive nature of its policy meetings further weakens its legitimacy as a forum to lead global climate action. Many of the world’s most climate-vulnerable nations are either excluded or unable to meaningfully participate in ICAO’s decision-making processes.
The EU, with its history of championing equitable climate measures, now faces a responsibility to restore integrity to its policy approach. This involves confronting not only the emissions themselves but also the underlying inequalities that climate change exacerbates.
Policy Innovation with Purpose
Including international aviation in the ETS would not merely be a pricing decision—it would be a principled stand. It would reflect the EU’s ongoing commitment to ensure that those who contribute to environmental harm are also those who help pay to repair it. Under current ETS rules, revenue generated from allowances is directed towards climate-focused initiatives. Expanding this to include international aviation opens up avenues to fund adaptation in countries facing existential climate threats.
For a world where 80 percent of people have never flown, placing the financial burden of aviation’s emissions on the many instead of the few is neither fair nor sustainable. A recalibrated ETS can help correct this imbalance.
Anticipating and Managing Pushback
Of course, such a move will not go uncontested. The United States has already signaled strong resistance, with key lawmakers historically pushing back against EU climate policies on aviation. This time, however, the EU is not acting in isolation. The climate stakes are higher, and the urgency is greater. The ETS is no longer a novelty—it is an established, effective system with proven results.
Pushing forward now sends a message that Europe remains a moral and strategic climate leader. It signals that fairness and climate ambition are not mutually exclusive, even in the face of geopolitical complexity.
A Call for Strategic Boldness
The ETS has always been more than a carbon market. It is a declaration of shared values, innovation, and responsibility. Reintegrating international aviation emissions is not just about tightening a loophole—it is about reaffirming that climate action must be consistent, even when inconvenient.
And while the challenges are real, so too are the opportunities. More than ever, the EU can prove that bold decisions grounded in fairness and foresight will always be its compass.
Conclusion: Leading by Example
In an era of growing climate volatility and rising geopolitical tension, real leadership lies in choosing long-term vision over short-term convenience. Reintroducing international aviation emissions into the EU ETS is not simply a regulatory step—it is a defining moment of climate integrity.
As the global community eyes Europe’s next move, this decision will echo far beyond its borders. It will influence not just emissions accounting but the credibility of multilateral climate commitments around the world.
Ultimately, pricing pollution is not a punishment. It is an acknowledgment that the privilege of flight must come with responsibility. The EU now stands at the threshold of a renewed legacy—one that prioritizes both environmental stewardship and global justice.