EU Allocates €430 Million in ETS Allowances to 130 Airlines for SAF Use in 2025

The European Commission on 8 September 2026 adopted a Decision allocating approximately 5.2 million EU Emissions Trading System (ETS) allowances to airlines for their use of sustainable aviation fuels (SAF) in 2025, with the allowances valued at roughly €430 million and distributed among 130 operators. The 2025 support level is more than four times the roughly €100 million in ETS allowances granted for SAF uptake the previous year.

In addition to the €430 million in free allowances, airlines benefit from a further €135 million incentive arising from the zero-rating of SAF consumed on routes subject to the EU ETS surrendering obligation. Combined, the total ETS incentive for SAF use in 2025 amounts to approximately €565 million. Airlines collectively claimed over 530,000 tonnes of SAF in 2025, comprising biofuels and advanced biofuels, which the Commission calculates contributed to approximately 1.7 million tonnes of CO2 abatement.

The dedicated ETS support mechanism was introduced by the EU ETS Directive in 2023 to accelerate SAF adoption by granting free allowances. Starting from 2024, a total of 20 million EU ETS allowances, worth around €1.5 billion, have been set aside for this purpose, covering all or part of the price difference between fossil kerosene and eligible SAF used by commercial operators on flights subject to EU ETS carbon pricing, with all airlines treated equally under the mechanism.

In July 2026, the Commission proposed, as part of a new EU ETS review, to expand the mechanism by an additional 110 million allowances reserved from wider application to aviation emissions. This additional support is expected to amount to around €15 billion and would also support electrification and address aviation's non-CO2 climate impacts.