EU weighs extending carbon market to flights beyond Europe
European Commission Considers Expanding Emissions Trading System
LONDON/BRUSSELS, May 12 (Reuters) - The European Commission is looking at extending its carbon market to cover international flights, seeking to put a price on more of the sector's emissions and ensure fair treatment across airlines, a senior official said on Tuesday.
Redesigning the EU Emissions Trading System
Brussels is redesigning the European Union's Emissions Trading System (EU ETS), which requires power plants and industries to buy carbon permits for their greenhouse gas emissions. The scheme caps the amount of permits available, to steer industries towards meeting EU climate targets.
Potential Extension to International Flights
Polona Gregorin, a senior official at the Commission's climate department, said the review would consider extending the ETS to put a carbon price on emissions from flights departing the EU. Currently, the scheme only imposes carbon costs on flights within Europe.
The change would aim to ensure equal treatment between routes for all operators, Gregorin said.
International Backlash and Trade Concerns
However, the move risks a backlash from trade partners including the United States, which opposed a previous EU attempt to expand its carbon market to cover international flights in 2011.
Current International Aviation Emissions Schemes
Emissions from international flights are currently covered by a separate United Nations scheme, known as CORSIA, which requires airlines to buy CO2 offsets to cover the growth in their emissions, but does not require them to reduce emissions outright.
A 2021 study conducted for the European Commission warned that the U.N. scheme was unlikely to reduce emissions, and may undercut Europe's climate goals.
Industry and Political Reactions
The ETS has come under growing political pressure from member states worried about Europe's faltering economic competitiveness, while some heavy industries have urged Brussels to give them more free permits to ease the cost of complying.
Under the ETS, some free emissions permits are given to industrial sectors to discourage them from relocating production outside the EU.
Future of Free Permits and Emissions Reduction Pace
The Commission is considering whether to give industries free carbon permits for longer than previously planned, as some struggle to cut emissions and remain competitive in the face of cheap imports and stiff competition in global markets.
The Commission said it also plans to slow down the speed at which the ETS cuts emissions during the 2030s, which could give industries some breathing space while still ensuring that emissions fall fast enough to align with the EU's 2040 climate goals.
(Reporting by Nina Chestney and Susanna Twidale; Editing by Louise Heavens and Kevin Liffey)
