In our ‘EU ETS vs CORSIA: Which better navigates the turbulence of the climate crisis?’ paper Carbon Market Watch reported that the EU’s carbon market only priced around 7% of the climate impacts from the EU aviation sector in 2023. While this should increase to around 15% in 2026 when aviation’s free allowances will be phased out, it remains an outrageously tiny share for a sector whose emissions rose again by 15% last year and which benefits only the privileged few who fly regularly.
This lack of adequate climate action contrasts with major findings from the June 2025 Eurobarometer public opinion survey that not only 85% of EU citizens identify climate change as a serious threat, but that most believe their countries aren’t doing enough and want to speed up the climate transition.
On top of this, more than 75% of EU citizens agree that public financial support should be given to the transition to clean energies even if it means subsidies to fossil fuels should be reduced or stopped. Yet, fossil fuels are still very much subsidised in Europe, and the aviation industry’s fuel source of choice, kerosene, is undertaxed.
Separate polling conducted last year in the most populous Western European countries reveals that most participants agree it is unfair that we have to pay taxes on the fuel we use in cars and trains, but airlines don’t have to pay taxes on the fuel they use in their planes.
Public demand for greater action that finally addresses aviation’s climate impacts couldn’t be any clearer.
In addition to more stringent rules to start (!) decarbonisation of the aviation sector, greater funding support for complementary policies that target aviation decarbonisation, allocating funds to less pollutant transport options and fairly distributing support to citizens and states most in need during the transition, is necessary.
EU governments are currently determining the bloc’s 2028-2034 budget, including decisions over the EU’s own revenue sources. In parallel, the Union is struggling to balance the imperatives of supporting a competitive European industrial base with higher climate ambition – an exercise that was unfavourable to the latter consideration in the latest period.
The European Commission will propose a revision of the EU Emissions Trading System (ETS) Directive by September 2026. While this is a chance to reaffirm the environmental integrity of the EU ETS against attempts to water it down, it also offers the opportunity to better address aviation’s climate impacts and raise significant revenue.
In this context, Carbon Market Watch commissioned a study by environmental consultancy Carbone 4 to assess the revenue generation potential and revenue allocation options from the aviation EU ETS based on scope extension scenarios. In this policy briefing, we present the study’s main findings and share our policy recommendations for how the EU should consider aviation carbon pricing.
