Emissions Trading Scheme (ETS)

European Union Emissions Trading Scheme (EU-ETS)

The European Union Emissions Trading System (EU ETS) was introduced in 2005 as a market-based instrument to reduce greenhouse gas emissions across energy-intensive sectors. Aviation was included in 2012, bringing aircraft operators flying within the European Economic Area (EEA) under the scheme.

The EU ETS operates as a cap-and-trade system: operators must monitor and report their CO₂ emissions and surrender allowances to cover them. Under the latest revision of the ETS Directive, adopted as part of the Fit for 55 package, aviation free allowances are being progressively phased out. Free allocation was reduced in 2024 and 2025 and will end entirely from 2026 onwards, meaning aircraft operators will need to purchase allowances through auctioning or the secondary market to cover all verified emissions within the system’s scope.

With the revision, while CORSIA addresses international aviation emissions on a global basis, the  EU ETS applies only to intra-EEA flights.  

EBAA encourages the EU to use its policy leverage to drive broad, global participation in CORSIA. In practice, this implies applying CORSIA consistently to international flights, including intra-EU international services, and setting a clear long-term direction to move away from running parallel ETS and CORSIA obligations for European aviation operators. A single global framework would support a level playing field, with passengers and carriers facing comparable environmental costs regardless of route or operator.

Carbon Offsetting Reduction Scheme for International Aviation (CORSIA)

The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a global market-based measure developed by ICAO to address CO₂ emissions from international aviation. Under CORSIA, operators are required to monitor, report and offset the growth in emissions above 2019 levels by purchasing carbon credits from approved schemes. For business aviation, CORSIA provides a single, worldwide framework that avoids a patchwork of national measures, but it also poses particular challenges: many small operators face high administrative and compliance costs relative to their size, and the scheme does not fully account for the operational realities of business aviation.

 EBAA therefore works to ensure that CORSIA is implemented in a way that is proportionate, fair, and workable for our sector while supporting its role as part of aviation’s broader decarbonisation pathway.