Closing the gaps: Policy recommendations for EU ETS on aviation and maritime

Summary

With the revision of the EU emissions trading system (ETS), the EU has the potential to turn the carbon price into a real driver of clean aviation and shipping. By widening its scope to more aviation and maritime emissions and backing the right technologies, the ETS can help innovative European companies scale and secure Europe's industrial leadership in e-fuels and zero-carbon emission technologies.

Europe has a real head start. More than half of the world's planned e-fuels capacity is in Europe, and European companies are at the forefront of battery-electric and hydrogen aircraft and vessels. Done right, the EU ETS can put a meaningful price on emissions, generate revenues for the transition and help these technologies scale.

The Commission proposal goes in the right direction: it expands coverage, extends support for e-fuels and, for the first time, supports zero-carbon emission technologies. But fundamental gaps remain.

The SASHA Coalition calls on co-legislators to close these gaps by:

1. Putting more aviation and maritime emissions under the carbon price, by covering all flights departing the EEA, extending the ETS to all vessels between 400 and 5,000 GT, and deleting the transshipment discount for large containerships.

2. Backing Europe's e-fuels industry, with 90% price-gap coverage for e-fuels and renewable hydrogen and frontloaded allowances conditional to long term offtake agreement, rather than prolonging reliance on biofuels and fossil-based "low-carbon" fuels.

3. Supporting zero-carbon emission aircraft and vessels to reflect their real costs, including battery degradation and replacement for electric aircraft.

4. Reinvesting a fair share of ETS revenues in aviation and maritime decarbonisation, with dedicated Innovation Fund and Industrial Decarbonisation Bank support.

For more details and our full list of recommendations, read our briefings on aviation and maritime below.

We urge the European Parliament and Council to seize this opportunity to make the EU ETS a real driver of clean aviation and shipping in Europe, cut emissions, and reinvest revenues in the European industries that can lead the transition.