EU ETS scope expansion for aviation

The report analyzes the potential demand response to an EU ETS scope expansion for extra-EEA flights. It finds that demand effects are generally small at current price levels, particularly for high-emitting segments such as long-haul flights, business travel, and private aviation, which exhibit low price elasticity. The study highlights that cost pass-through rates are higher in competitive markets and at uncongested airports. Non-price factors, including value of time, airline loyalty, and airport attractiveness, are identified as primary drivers of the observed differences in price sensitivity across market segments.

• The overall demand response to an EU ETS scope expansion is expected to be relatively small for most segments at current price levels, typically limited to a few percentage points.
• Long-haul commercial flights (over 9 hours) are significantly less price-sensitive than short-haul flights (under 1.5 hours), with an average elasticity that is 41% lower.
• Business travellers exhibit much lower price sensitivity than leisure travellers, with a difference of 54% for short-haul and 74% for long-haul flights.
• Private aviation is the most price-inelastic segment, with elasticities approximately 9 times lower than long-haul commercial leisure flights and 15 times lower than short-haul flights.
• Frequent flyers (defined as those flying five or more return trips per year) are less price-sensitive than occasional flyers, by 29% for leisure travel and 52% for business travel.
• Cost pass-through rates vary by market conditions: airlines pass through a higher share of costs in more competitive markets and at uncongested airports, while passing through less in less competitive markets or at congested airports.
• Non-price factors—specifically value of time, airline loyalty, airport attractiveness, and the availability of substitute transport—significantly dampen the influence of price on passenger choices.
• The report concludes that the EU ETS price increase will have a relatively low effect on the highest emitters, such as business class and private jet passengers, who are the least price-sensitive.
• Demand response for return tickets is expected to be significantly lower (approximately 50% lower) than for one-way tickets because only the departing leg is priced under the EU ETS.

APA

Leestemaker, L., Meijer, C., Boerdijk, S., & Heijink, M. (2026). EU ETS scope expansion for aviation. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2026/06/CE_Delft_260133_EU_ETS_scope_expansion_for_aviation_Def-.pdf

Chicago

Leestemaker, Louis, Christiaan Meijer, Sjoerd Boerdijk, and Merit Heijink. EU ETS scope expansion for aviation. Carbon Market Watch, 2026. https://carbonmarketwatch.org/wp-content/uploads/2026/06/CE_Delft_260133_EU_ETS_scope_expansion_for_aviation_Def-.pdf.

Wikipedia

{{cite report |last1=Leestemaker |first1=Louis |last2=Meijer |first2=Christiaan |last3=Boerdijk |first3=Sjoerd |last4=Heijink |first4=Merit |title=EU ETS scope expansion for aviation |publisher=Carbon Market Watch |date=May 2026 |url=https://carbonmarketwatch.org/wp-content/uploads/2026/06/CE_Delft_260133_EU_ETS_scope_expansion_for_aviation_Def-.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{leestemaker2026ets, author = {Leestemaker, Louis and Meijer, Christiaan and Boerdijk, Sjoerd and Heijink, Merit}, title = {{EU ETS scope expansion for aviation}}, institution = {Carbon Market Watch}, year = {2026}, month = may, url = {https://carbonmarketwatch.org/wp-content/uploads/2026/06/CE_Delft_260133_EU_ETS_scope_expansion_for_aviation_Def-.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }