Full scope EU ETS for aviation

In its current form, the EU ETS covers all flights between European Economic Area (EEA) airports. In 2026, the European Commission will reevaluate this scope based on the performance of the ICAO CORSIA scheme. Transport and Environment (T&E) supports an extension of the EU ETS scope to all flights departing at airports within the EEA. An important counterargument of the aviation sector to the EU ETS scope extensions is the occurrence of carbon leakage. T&E has commissioned CE Delft to answer the following questions:

1. What will be the effect of the EU ETS scope extension on costs and emissions?
2. Which types of routes are at risk of carbon leakage, and what are the effects on ticket prices on alternative travel options on these routes?
3. Which instruments at EU or national level could reduce carbon leakage caused by a scope extension of the EU ETS?

Some important contributions from this study are:

• Clarification on the definition of carbon leakage. In the literature and by stakeholder, often estimates are labelled as carbon leakage, which are based on changes in market shares on route or airport level without considering whether the shifted emissions remain within or outside the EU ETS system. In many cases also a link is suggested that these are additional emissions due to longer flight routes. The  latter only occurs to a very limited extent.
• Identification and analysis of the 4 most likely types of carbon leakage that would occur if the EU ETS would cover all departing flights from EEA airport.
• Exploration of 5 potential countermeasures to prevent carbon leakage. From this first analysis we conclude that all 5 countermeasures have potential to work. However, additional research is needed.