The European Union's Emissions Trading System (ETS) review, proposed in July 2026, aims to align the climate policy mechanism with 2040 targets. The initiative seeks to transform the ETS into a strategic engine for innovation and investment, specifically targeting the aviation and maritime sectors.
Transport & Environment (T&E) argues that the current framework lacks the necessary structure to support clean fuel investments in these hard-to-abate industries. The organization suggests that ETS revenues from shipping and aviation should be repurposed into a specialized investment tool.
This proposed instrument would focus on de-risking and accelerating the production of e-fuels, specifically Renewable Fuels of Non-Biological Origin (RFNBOs). T&E emphasizes that early financial support is essential for establishing a domestic e-fuels value chain and maintaining the EU's industrial competitiveness.
