IATA Opposes EU Plan to Expand Carbon Trading Rules

The International Air Transport Association (IATA) has criticised the European Union's proposal to extend its Emissions Trading System (EU ETS) beyond European borders, warning that the move could create international tensions, weaken aviation's global climate efforts and increase costs for airlines, businesses and travellers.

IATA said the proposal revives an approach that was widely challenged more than a decade ago and urged European policymakers to work through globally agreed climate measures instead of introducing rules with effects outside the EU.

Industry Warns Against Extraterritorial Rules

IATA Director General Willie Walsh said extending the EU ETS beyond Europe would repeat what he described as a historic mistake, arguing that applying regional carbon rules to international aviation risks creating disputes over jurisdiction and international cooperation. He said such a policy could slow progress toward reducing aviation emissions while affecting Europe's competitiveness, with higher costs ultimately falling on passengers and businesses.

Global Climate Framework Preferred

Instead of expanding the EU ETS, IATA called on the European Union to strengthen support for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), the global carbon reduction framework developed through the International Civil Aviation Organization (ICAO).

According to the association, a coordinated international approach offers a more effective path for cutting aviation emissions while avoiding conflicting regional regulations that could complicate global airline operations.

Sustainable Aviation Fuel Incentives Needed

IATA also highlighted the importance of expanding the use of Sustainable Aviation Fuel (SAF), which is considered one of the aviation sector's most important tools for reducing carbon emissions. The association said increasing SAF allowances and introducing a book-and-claim system could encourage wider adoption of sustainable fuels. However, it stressed that the design and implementation of these measures will determine how effective they become.

Dialogue with EU to Continue

IATA said it will continue to engage with European policymakers to promote climate policies that avoid extraterritorial measures, fully support CORSIA, and create practical incentives that accelerate investment in Sustainable Aviation Fuel. The association believes that international cooperation and globally aligned policies will deliver better outcomes for aviation's long-term decarbonisation while maintaining fair competition across the industry.