EU ETS

Duration: 1.May.2021 - 31.December.2021

Based on the EU Commission’s Fit for 55 proposals published in July 2021, a joint study by CE Delft and DLR commissioned by the European Parliament (TRAN Committee) discusses the challenges and impacts resulting from the integration of the maritime sector in the EU ETS, and from a more stringent EU ETS for aviation which will also include the ICAO CORSIA offsetting scheme. It considers implementation challenges, consequences for the competitiveness of European stakeholders, e.g. caused by carbon leakage, and impacts on competition and sectoral employment.

Based on mainly qualitative analysis and the results of stakeholder consultations, recommendations on how to overcome implementation issues and adverse competitive and societal effects are provided. In the project, DLR was responsible for assessing the aviation sector. Here, there seems to be no reason to fundamentally amend the EU-ETS related provisions of the proposal, except for some clarification on exact ETS and offsetting exemptions (e.g. for flights to States exempt from CORSIA from 2027 onwards) and on potential exemptions for rotorcraft operations.

To lower the competitive disadvantage of European carriers on indirect routings via EEA hubs to non-EEA locations, a carbon leakage protection could be introduced, which would reduce ETS-related cost of intra-EEA feeder flights proportionally to the share of non-EEA transfer passengers. A dedicated recycling of auctioning revenues to the development of emission reduction measures in the sector, such as SAF feedstock development, production and distribution, could help green the sector in the long run through new technologies.