The European Union reached a deal in the early hours of Wednesday on a law to increase the price that airlines have to pay when they emit planet-heating carbon dioxide emissions, adding pressure to the sector to shift away from fossil fuels.
Airlines running flights within Europe currently have to submit permits from the EU’s carbon market to cover their carbon dioxide emissions, but the EU gives them most of those permits for free.
That is set to change under the law agreed by negotiators from EU countries and the European Parliament, which would phase out those free permits by 2026, sources familiar with the discussions told Reuters.
That will mean airlines will have to pay for their CO2 permits, providing a financial incentive for them to pollute less.
A far smaller amount of free CO2 permits will be made available to airlines that use sustainable aviation fuels (SAF) to partly compensate them for the price difference between SAFs and far cheaper fossil fuel kerosene, the sources said.
The EU has so far limited its carbon market to covering emissions from flights within the EU, but negotiators agreed Brussels will assess in 2026 whether the U.N. aviation agency ICAO’s scheme to offset international flights’ CO2 emissions is on track to deliver net zero emissions by 2050 – and if it is not, the EU will propose extending its carbon market to cover emissions from all departing flights.
Climate campaigners lamented that emissions from international flights would not be added to the carbon market sooner.
“Average European families will continue to pay much more for their CO2 emissions than frequent long-haul flyers. We are about to lose another decade of climate inaction,” said Jo Dardenne, aviation director at non-profit group Transport and Environment.
EU countries and the bloc’s Parliament both need to formally approve the law before it takes effect.