To sate their voracious appetite for greenwashing offsets, major fossil fuel companies have invested considerable resources and effort to lobby, both directly and indirectly, to weaken carbon market federal regulations in the United States and state regulations in California, concludes a new Carbon Market Watch investigation.
Aviation continues to enjoy massive tax privileges, dodging around €20 billion in taxation every year through exemptions on kerosene and no VAT on tickets. These loopholes are fundamentally incompatible with the EU’s climate objectives and the polluter-pays principle, which require proper taxation and carbon pricing. The exemptions underscore the need to extend the EU ETS to long-haul flights.
Expanding the EU ETS to all departing EEA flights, including those operated by US airlines, is crucial to generate much needed revenue and spark aviation’s green transition.
The International Civil Aviation Organisation hailed its Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) as a global, harmonised answer to aviation’s growing climate impact. Yet the reality is very different: patchy enforcement, limited coverage, and heavy reliance on problematic offsetting with carbon credits.
Despite being the most climate-damaging form of travel, private jet use has reached record highs, yet most flights are exempt from paying a carbon price, and all are exempt from fuel taxes. This must end.
The European Commission’s Sustainable Transport Investment Plan (STIP) is a promising step towards promoting cleaner fuels in aviation and maritime transport. However, directing revenue from the EU Emissions Trading System towards these sectors should go hand in hand with expanding the EU ETS to cover all shipping and aviation emissions.
In this policy briefing, CMW presents the main findings and shares our policy recommendations for how the EU should consider aviation carbon pricing.
By confronting the aviation industry’s full climate impact, our research shows that by applying the polluter-pays principle and expanding carbon pricing to non-covered aviation climate impacts, there could be a tenfold increase in EU ETS revenues between 2025 and 2040 from the aviation sector.
The EU Emissions Trading System (ETS), which requires polluters to pay for their emissions, was a world first, yet international aviation emissions are still exempt from ETS pricing despite their huge climate damage. The EU must now bring international aviation back under regulation, stand up for its values and reaffirm its role as a global climate action leader.
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