EU ETS Aviation Could Expand in 2029 - Here's What Changes

For airlines flying in and out of Europe, aviation's carbon-pricing story isn't about free allowances anymore. The European Commission's proposal COM(2026)616, published July 17, 2026, focuses instead on where EU carbon pricing applies, how it treats business aviation, and how it interacts with CORSIA. Nothing here is adopted law yet, but the direction is specific enough to matter for planning.

Full Auctioning, As Planned 

Start with what isn't changing. Free allocation for aircraft operators is being phased out under existing rules, reduced 25% in 2024 and 50% in 2025, moving to full auctioning from 2026. COM(2026)616 doesn't touch that schedule. Its aviation provisions are about what happens after 2026, not before it.

New Geographic Boundary

The proposal's biggest structural change is geographic. Today, the EU ETS mainly covers intra-EEA flights plus routes to Switzerland and the UK. Starting in 2029, coverage would extend to flights departing the EEA and landing within 5,000 kilometers of Frankfurt, pulling in destinations like Istanbul, Dubai, Abu Dhabi, Riyadh, Casablanca, Marrakech, Tunis, Algiers, and Cairo. Longer routes to New York, Toronto, São Paulo, Tokyo, Singapore, or Beijing would stay outside the expanded scope.

The expansion was originally planned for 2027 but has since been pushed to a single 2029 start date. In practical terms, that means roughly 19 million tonnes of CO2 from extra-EEA flights could come under the system, on top of the 64 million tonnes already covered under the current, narrower scope.

Private Jets, Now Defined 

The proposal introduces specific definitions for business flights and business aircraft, formally bringing business aviation into the EU ETS regulatory framework for the first time. Exactly which operators fall inside that scope still depends on implementing acts the Commission hasn't finalized yet, worth watching rather than treating as settled, since the monitoring and reporting obligations that follow will depend on those details.

SAF Support Extends to 2040, With a Catch

The current SAF Allowances reserve, capped at 20 million through 2030, would gain an additional reserve of up to 110 million allowances and run through 2040, with eligibility widened to cover any flight departing an EEA airport. Airlines with fuel supply contracts of at least three years could also secure advance SAF allowance reservations up to five years out, subject to a 10 million allowance cap.

The proposal isn't uniformly generous, though. Support for biofuels like HEFA would actually drop from 50% to 30%, with eligibility ending in 2029, while renewable hydrogen and RFNBOs would keep stronger support at 60%, a clear signal the Commission is steering support toward next-generation fuels and away from conventional biofuel pathways.

CORSIA Enters the Formula 

Rather than let EU ETS and CORSIA operate as fully separate systems, the proposal lets airlines reduce their EU ETS surrender obligations by accounting for CORSIA offsetting costs already incurred, weighing the relative value of CORSIA credits against EU allowances. Roughly 75% of the non-EEA countries that would fall under the EU ETS's expanded scope are already subject to CORSIA, which is exactly the overlap this mechanism is meant to address.

What Happens Next

COM(2026)616 is a proposal, not adopted legislation. It still has to move through the European Parliament and Council, and the details, particularly around business jet scope and implementation timing, are likely to shift before anything becomes binding.

The headline change doesn't undo any airline budgets; instead, it's an expansion into uncharted territory. Airlines flying medium-haul routes into the Middle East, Turkey, and North Africa could see EU carbon obligations appear on routes that have never carried them before, while genuinely long-haul flying stays untouched for now. Combined with a larger, longer SAF support window and a CORSIA-offset mechanism designed to prevent double charging, the practical takeaway is straightforward: airlines with meaningful non-European route networks have a new compliance map to plan around, and 2029 is closer than the current legislative timeline might suggest.