The European Commission has allocated €100 million worth of EU ETS allowances to 53 airlines, a move designed to incentivize the use of sustainable aviation fuels (SAF) and reduce the aviation sector's carbon footprint.
The European Commission has taken a decisive step to accelerate the green transition in the aviation sector, announcing on September 12, 2025, the allocation of approximately €100 million in EU ETS allowances to help airlines purchase Sustainable Aviation Fuels (SAF). This move, which applies to the 2024 calendar year, marks the official launch of a new, dedicated support mechanism designed to make cleaner fuels more economically viable for commercial aircraft operators.
The allocation amounts to about 1.3 million EU ETS allowances, distributed among 53 different operators. The value of these allowances is based on a price of €75 per allowance, totaling the announced €100 million. The support is directly tied to the volume of eligible SAF used by each airline on flights covered by the EU ETS, effectively subsidizing the price difference between traditional fossil kerosene and the more environmentally friendly fuels. This direct financial aid is a key component of the EU’s strategy to overcome one of the main hurdles to SAF adoption: its high cost relative to conventional jet fuel.
This latest action stems from a recent amendment to the EU ETS Directive, which established a comprehensive support system for SAF uptake. Under the new framework, a total of 20 million EU ETS allowances, valued at around €1.5 billion at current prices, have been set aside for this purpose, to be distributed over the coming years. The 2024 allocation represents the first installment of this long-term commitment.
The support system offers a two-fold benefit to operators. First, they receive the financial value of the allocated allowances, which in 2024 amounts to the aforementioned €100 million. Second, and equally important, is the "zero-rating" incentive. Airlines are not required to surrender allowances for the emissions from the portion of fuel used that is sustainable. This exemption provides an additional financial advantage, valued at approximately €25 million in 2024. Combined, these two mechanisms create a powerful financial incentive for airlines, with the total ETS support for SAF use in 2024 reaching an impressive €125 million.
Beyond this direct support, the EU ETS also plays a critical role in financing the Innovation Fund. This fund is a crucial instrument for developing and scaling up innovative clean technologies, including those within the aviation sector, to further reduce its climate impact.
