Europe’s largest airlines have urged the European Union to reconsider plans to extend its Emissions Trading System to cover international flights, warning that the move could significantly increase ticket prices and place additional financial pressure on the aviation sector.
The proposal under review by the European Commission would expand the existing carbon pricing mechanism beyond intra-European flights to include outbound international routes. At present, the system applies only to flights operating within the EU, requiring airlines to purchase carbon allowances or invest in offsetting measures to compensate for emissions.
The debate comes as aviation industry leaders express concern over the feasibility and cost of deeper climate obligations. Speaking about the system, aviation analyst Gerry Byrne noted that aircraft cannot transition away from fossil fuels in the same way as road vehicles, pointing out that large-scale battery-powered aviation remains unrealistic with current technology.
He explained that airlines participating in the system effectively pay into environmental compensation schemes, often linked to projects such as reforestation. However, expanding the framework globally would introduce additional complexity, particularly on routes involving countries without comparable carbon pricing structures.
Industry representatives, including members of the International Air Transport Association International Air Transport Association, have argued that the proposed expansion would create unsustainable cost pressures. The organisation represents more than 370 airlines and accounts for the vast majority of global air traffic.
According to Byrne, the aviation sector is already struggling to meet long-term environmental commitments. While airlines have pledged to reach net-zero emissions by 2050, he suggested that current technological limitations make the target highly challenging. Sustainable aviation fuel, often cited as a key pathway to decarbonisation, still accounts for less than 1% of global aviation fuel consumption.
He added that scaling up alternative fuels would require vast agricultural expansion to produce bio-based energy sources, raising further questions about practicality and environmental trade-offs.
Financial pressures on the industry are also mounting. IATA had previously projected record profits for airlines, but that outlook has been significantly reduced following global disruptions and rising costs. Aircraft delivery delays from manufacturers such as Boeing and Airbus have forced airlines to extend the use of older fleets, increasing maintenance expenses.
At the same time, geopolitical tensions have driven up oil prices, pushing jet fuel costs higher. IATA Director General Willie Walsh has warned that fuel prices could rise by as much as 70% over the course of 2026.
Although many carriers have attempted to protect themselves through fuel hedging strategies, analysts say those buffers are temporary. Byrne noted that airlines will eventually need to purchase fuel at prevailing market rates, exposing them to sharply higher operating costs.
He warned that as hedged supplies are exhausted, carriers could face significant financial strain, particularly if fuel prices remain elevated and regulatory costs increase simultaneously.
The European Commission has not yet reached a final decision on the proposed expansion, but the discussion highlights ongoing tensions between environmental policy goals and the economic realities facing the aviation industry.
