European Union expands carbon emissions trading system

The European Union is expanding its Emissions Trading System (ETS) to include more sectors as part of its climate policy. In the aviation sector, a proposal from the European Commission aims to extend carbon quotas beyond intra-European flights. Starting in 2029, the system could include flights to destinations within 5,000 kilometers of Frankfurt, potentially impacting major Gulf carriers and increasing costs for airlines.

Simultaneously, the ETS2 mechanism will extend carbon pricing to fuels used for road transport and building heating. While not a direct tax on motorists, fuel suppliers will be required to purchase quotas for CO2 emissions, a cost that may be passed to consumers. Estimates suggest this could increase fuel prices by 10 to 15 cents per liter, depending on market fluctuations. To allow member states to prepare social support measures and alternative energy investments, the implementation date has been moved from 2027 to 2028.