– In the wee hours of Wednesday, the European Union reached an agreement on a law to raise the price that airlines must pay when they emit climate-warming carbon dioxide emissions, increasing pressure on the industry to move away from fossil fuels.
In order to cover their carbon dioxide emissions, airlines operating flights within Europe currently need to submit permits from the EU’s carbon market, but the EU provides them with the majority of those permits for free.
The law reached by negotiators from the EU countries and the European Parliament is expected to change that and phase out those free permits by 2026. Free licences would be reduced by 25% in 2024 and by 50% in 2025.
As a result, airlines will be required to pay for their CO2 permits, giving them a financial incentive to reduce their pollution.
20 million fewer free CO2 permits will be made available to airlines that use sustainable aviation fuels (SAF) between 2024 and 2030 to partially offset the price difference between SAFs and the much cheaper fossil fuel kerosene.
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