The International Air Transport Association (IATA) has called for the review of the European Union’s Emissions Trading System (EU ETS).
IATA says this call follows growing skepticism among EU leaders regarding the effectiveness of the EU ETS and its negative impact on European competitiveness. This position aligns with the Draghi Report, it says, which identifies high costs, regulatory complexity, and underinvestment as critical barriers to the bloc’s economic resilience.
According to the association, the review could enhance European air connectivity and economic resilience by improving the competitiveness of Europe’s air transport industry.
The areas that IATA highlights are as follows:
- Ensuring full implementation of CORSIA for all international flights, including flights within the European Economic Area (EEA) routes. To prevent market fragmentations, the EU should avoid regional derogations, additional eligibility hurdles, and overlapping measures that conflict with this global framework.
- Enabling a Sustainable Aviation Fuel (SAF) book-and-claim system for the claiming of environmental attributes under the EU ETS and allowing purchase-based SAF claiming will enhance investment certainty and affordability which are needed to maintain a level playing field for all operators.
- Reinvesting revenue into decarbonisation and directing a greater portion of aviation’s EU ETS contributions back into the industry’s transition. Priority should be given to scaling SAF production and supporting the development of emerging zero-emission technologies.
- Balancing climate policy for resilience which should involve pursuing ambitious climate targets while safeguarding the air transport industry’s global competitiveness. All measures must be grounded in scientific facts and harmonised with international standards to avoid disproportionate administrative burdens and excessive costs.
Willie Walsh, IATA’s Director General, said: “European aviation policy must bolster competitiveness as it advances decarbonisation. Reviewing the EU ETS offers a critical opportunity to refocus efforts on cost-effective emission reductions. The priority must be the full implementation of CORSIA, the reinvestment of EU ETS revenues into SAF and other credible decarbonisation solutions, and the elimination of overlapping measures that add cost and complexity without environmental gain.
“By doing so, we will protect European air connectivity—a vital strategic asset foundational to EU integration, trade, and commerce. Amid global economic strain and geopolitical volatility, the EU ETS review must deliver a harmonized climate policy framework that balances the sector’s competitiveness with its climate ambitions.”
