# EU agrees law to make airlines pay more to pollute Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-07 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: EU Aviation Law: Carbon Pricing Boosts Climate Action Meta Description: The EU law will increase financial incentives for airlines to pollute less by phasing out free CO2 permits and making sustainable aviation fuels more appealing. URL: https://financedigest.com/eu-agrees-law-to-make-airlines-pay-more-to-pollutehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-07t193420z4lynxmpeib60i7rtroptp4climate-change-eu-aviation-1736814747633-compressed.jpg) By Kate Abnett BRUSSELS (Reuters) -The European Union reached a deal in the early hours of Wednesday on a law to increase the price that airlines have to pay when they emit planet-heating carbon dioxide emissions, adding pressure to the sector to shift away from fossil fuels. Airlines running flights within Europe currently have to submit permits from the EU’s carbon market to cover their carbon dioxide emissions, but the EU gives them most of those permits for free. That is set to change under the law agreed by negotiators from EU [countries and the European](https://www.financedigest.com/four-european-countries-call-for-special-treatment-of-defence-in-eu-debt-rules-document.html "Four European countries call for special treatment of defence in EU debt rules – document") Parliament, which would phase out those free permits by 2026. Free permits would be cut by 25% in 2024 and 50% in 2025. That will mean airlines will have to pay for their CO2 permits, [providing a financial](https://www.financedigest.com/mazars-to-acquire-financial-modelling-consultancy-and-training-provider-corality-financial-group.html "Mazars to acquire financial modelling consultancy and training provider, Corality Financial Group") incentive for them to pollute less. A smaller amount of free CO2 permits – 20 million – will be made available from 2024-2030 to airlines that use sustainable aviation fuels (SAF) to partly compensate them for the price difference between SAFs and far cheaper [fossil fuel](https://www.financedigest.com/eu-approves-effective-ban-on-new-fossil-fuel-cars-from-2035.html "EU approves effective ban on new fossil fuel cars from 2035") kerosene. We stand with the sector through the process of the [green transition,” EU parliament’s lead](https://www.financedigest.com/eu-announces-plans-to-lead-green-industrial-revolution.html "EU announces plans to lead green industrial revolution") negotiator Suncana Glavak said. Industry group Airlines for [Europe said it was “extremely](https://www.financedigest.com/europe-unveils-hi-tech-satellite-to-speed-up-extreme-weather-warnings.html "Europe unveils hi-tech satellite to speed up extreme weather warnings") disappointed” with the plan to phase out free permits by 2026. This is well before truly effective decarbonisation [solutions will be available at the scale needed for them to be effective,” the group](https://www.financedigest.com/james-trainor-top-fbi-cyber-expert-joins-aons-cyber-solutions-group.html "James Trainor, top FBI cyber expert, joins Aon’s Cyber Solutions Group") said in a statement. The EU has so far limited its [carbon market](https://www.financedigest.com/diamond-like-carbon-market-to-perceive-substantial-growth-during-2016-2024.html "Diamond Like Carbon Market to Perceive Substantial Growth During 2016-2024") to covering emissions from flights within the EU, but negotiators agreed to assess in 2026 whether the U.N. aviation agency ICAO’s scheme to offset international flights’ CO2 emissions is on track to deliver net zero emissions by 2050 – and if it is not, the EU will [propose extending its carbon market to cover emissions](https://www.financedigest.com/euro-7-emissions-proposals-the-sequel-europes-carmakers-dont-want-to-see.html "Euro 7 emissions proposals, the sequel Europe’s carmakers don’t want to see") from all departing flights. Climate [campaigners lamented that international flights would not be added to the carbon](https://www.financedigest.com/coca-cola-digital-ad-campaigns-use-seenthis-streaming-technology-to-avoid-excessive-carbon-footprint.html "Coca-Cola Digital Ad Campaigns Use SeenThis Streaming Technology to Avoid Excessive Carbon Footprint") market sooner. Average European families will continue to pay much more for their [CO2 emissions](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA") than frequent long-haul flyers,” said Jo Dardenne, aviation director at non-profit group Transport and Environment. Airlines will also have to start reporting other pollutants including nitrogen oxides and soot particles from 2025, with the EU [planning in 2028 to propose adding those emissions to the carbon market](https://www.financedigest.com/eus-planned-reforms-aim-to-better-protect-power-bills-from-market-swings.html "EU’s planned reforms aim to better protect power bills from market swings"). EU countries and the bloc’s parliament will now formally [approve the law](https://www.financedigest.com/eu-approves-law-to-end-sales-of-new-co2-emitting-cars-by-2035.html "EU approves law to end sales of new CO2-emitting cars by 2035") before it takes effect. (Reporting by Kate Abnett; Editing by Benoit Van Overstraeten, Louise Heavens and David Evans) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---