The International Air Transport Association (IATA) has urged the European Union to undertake a comprehensive reassessment of its Emissions Trading System (EU ETS), warning that the current structure could weaken the competitiveness of European aviation.
According to IATA, misalignment between regional and global frameworks risks increasing operational costs, limiting connectivity, and diverting investment away from sustainable aviation solutions.
Willie Walsh, Director General of IATA, stressed that aviation policy must strike a balance between environmental ambition and economic resilience. He called for the full implementation of CORSIA, the reinvestment of ETS revenues into sustainable aviation fuel (SAF), and the elimination of overlapping regulatory measures.
The association highlighted that layering EU-specific rules on top of global mechanisms introduces complexity without delivering additional environmental benefits.
A key recommendation is the introduction of a “book-and-claim” system for SAF, allowing airlines to claim emissions reductions based on fuel purchases rather than physical usage. This approach would enhance transparency, prevent double-counting, and create a more level playing field across Europe.
IATA also emphasized the scale of financial flows linked to the ETS. Between 2026 and 2030, aviation is expected to surrender nearly 330 million allowances, generating billions in revenues for EU member states. The association argues that a larger share of these funds should be reinvested into decarbonisation initiatives.
Current mechanisms remain insufficient. Existing SAF incentives are projected to meet only 4–5% of demand over the same period, while achieving long-term targets could require investments of up to €376 billion by 2050.
IATA concluded that a harmonised, globally aligned framework is essential to ensure predictable compliance, maintain connectivity, and support the sector’s transition to net-zero emissions.
