The European Union’s proposed review of its Emissions Trading System (ETS), published in July 2026, aims to align the climate policy with the bloc’s 2040 targets and make it a driver of innovation and investment. But a policy brief focused on aviation and shipping says the current proposal would not adequately support clean-fuel investment in either sector.
The brief notes that aviation and maritime transport are significant sources of ETS revenue and argues that some of those funds should be used to reduce the risks of producing and adopting e-fuels. It identifies renewable fuels of non-biological origin (RFNBOs) as important to meeting the targets of the FuelEU Maritime and ReFuelEU Aviation rules.
Among its recommendations, the brief calls for earmarking 50% of national ETS revenues for decarbonisation in priority sectors, including e-fuels for aviation and shipping, with stricter reporting to ensure compliance. It also proposes including the two sectors in EU-level funding mechanisms such as the ETS Investment Booster, the Industrial Decarbonisation Bank and the Modernisation Fund.
The authors further recommend creating an e-fuels funding pool by 2028 and using market-making measures, including double-sided auctions, to connect supply with demand and help advance investment decisions. They say existing support schemes for sustainable aviation fuel and the maritime sector should also be improved, while noting that these measures cannot replace the broader market-building role of auctions.
The article presenting the brief was published by CleanTechnica and identifies T&E as its source.
Sources: CleanTechnica.