EU Carbon Rules Under Fire: IATA Seeks Urgent Review to Protect Aviation Growth

The International Air Transport Association (IATA) has called on the European Union to urgently review its Emissions Trading System (EU ETS), warning that current policies risk undermining the competitiveness of Europe’s aviation sector at a critical time for decarbonisation.

In its latest assessment, IATA stressed that while climate goals remain essential, the regulatory approach must be balanced with economic realities to safeguard air connectivity and resilience. The body cautioned that overlapping and complex regional measures could fragment the global aviation framework and impose unnecessary financial and administrative burdens on airlines.

A key recommendation from IATA is the full implementation of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) across all international flights, including those within Europe. According to the organisation, a unified global system is crucial to avoid duplication of costs and inefficiencies that could arise from parallel regional mechanisms.

The association has also pushed for the introduction of a “book-and-claim” system for Sustainable Aviation Fuel (SAF) under the EU ETS. This would allow airlines to invest in cleaner fuels more flexibly, boosting affordability and accelerating the transition to low-emission aviation.

Another major concern raised is the use of revenues generated through the EU ETS. IATA argues that a larger share of these funds should be reinvested directly into aviation decarbonisation efforts, particularly for scaling up SAF production and supporting next-generation zero-emission technologies.

The warning comes amid growing unease among policymakers and industry leaders about the economic impact of Europe’s climate policies. IATA believes that without careful recalibration, the EU risks weakening its aviation sector’s global standing at a time when connectivity is vital for trade, tourism and economic stability.

Director General Willie Walsh emphasised that the goal should be a harmonised policy framework that delivers real emissions reductions without compromising competitiveness. He underlined that aviation, as a global industry, requires globally aligned solutions rather than fragmented regional rules.

As geopolitical uncertainty and cost pressures continue to weigh on airlines, IATA’s message is clear: Europe must strike the right balance between environmental ambition and economic sustainability to ensure the future growth of its aviation sector.