It is surprising that the debate on the European Emissions Trading System (ETS), whose review was scheduled for this month of July, continues to focus almost exclusively on how much it costs to reduce aviation emissions. What should really matter is how we use the resources generated by the ETS itself over the next decade to reduce our energy dependence, strengthen the European industry, and accelerate innovation.
This review offers the opportunity to make that qualitative leap and stop understanding the ETS solely as a climate instrument, but as a tool for industrial policy, technological innovation, and energy sovereignty.
Too often, the ETS has been presented as a tax. The reality is much more complex. Since its creation, the European carbon market has contributed to introducing a stable economic signal that allows directing investment decisions towards more efficient technologies that are less dependent on fossil fuels. It has accelerated innovation, incentivized operational improvements, and begun to create the necessary conditions for the development of new sustainable fuels for aviation.
In an increasingly uncertain geopolitical context, this dimension takes on even greater relevance
Recent international tensions have once again demonstrated that the greatest vulnerability of European air transport does not come from the ETS, but from its enormous dependence on imported fossil kerosene. Each energy crisis, each disruption in supply chains, and each episode of volatility in international oil markets ends up directly affecting the price of fossil fuel and, consequently, the cost of air transport. In fact, during the recent crisis with Iran, the increase in fuel prices added around 29 euros to the cost per passenger on an intra-European flight, while the cost associated with the ETS for that same route was only 7 euros. Energy markets, more than climate policy, remain the main risk factor for European aviation.
Reducing that dependence is not only a climate necessity. It is, above all, a matter of economic competitiveness and strategic autonomy.
Spain starts from a privileged position to lead this transformation. Our country has some of the largest renewable resources in Europe, a growing capacity to produce renewable hydrogen, a highly competitive energy industry, large airport and port infrastructures, and an industrial ecosystem capable of attracting investments in sustainable aviation fuels (SAF) and synthetic fuels (e-SAF).
But having that potential does not guarantee leveraging it.
The revision of the ETS represents an opportunity to direct part of the revenues generated towards those investments that allow for reducing future emissions from the sector, such as accelerating the production of SAF, developing renewable fuels of non-biological origin (RFNBO or e-SAF), modernizing airport infrastructures, promoting the electrification of ground operations, strengthening energy networks, and supporting industrial innovation.
In other words, transforming climate revenue into productive investment
This debate about the destination of the revenues becomes even more relevant if the revision expands the scope of the ETS to flights departing from Europe. In that scenario, the revenues from the system in Spain could increase from the 176 million euros collected in 2024 to approximately 1.400 million euros annually in 2030. The question is no longer just how much to collect, but how to strategically use those resources to accelerate decarbonization, strengthen European competitiveness, and reduce our energy dependency.
This is probably the least debated aspect of the ETS and, however, one of the most decisive for its political and economic success.
When revenues from carbon are reinvested in the decarbonization process itself, the system gains social legitimacy, provides certainty to investors, and accelerates the development of technologies that still need to scale to compete fully in the market. The ETS then ceases to be perceived solely as a revenue-generating mechanism and becomes an instrument of economic transformation.
Precisely for that reason, the discussion about the review of the system should not focus exclusively on the geographical scope of the covered emissions. Europe today has different options to develop the ETS while preserving the competitiveness of its airlines and reducing possible competitive distortions. The goal should not be to choose between climate ambition and competitiveness, but to design an intelligent regulatory framework that allows progress in both directions at the same time. A well-designed ETS allows for a price signal on carbon where it is most effective and, at the same time, reinvest those resources in strategic technologies that reduce future emissions and strengthen the competitiveness of the sector.
The European climate policy has repeatedly shown that real solutions are not the most ideological, but the most pragmatic. Those capable of sending clear signals to the market, offering regulatory stability, and mobilizing private investment.
In Spain, we have much to gain if we approach this discussion from that perspective
Our country legitimately aspires to become one of the major European hubs for the production of sustainable fuels for aviation. That ambition requires more than regulatory objectives. It requires financing, predictability, and instruments capable of reducing the risk of the necessary investments over the next decade.
The ETS can provide precisely that link between regulation and investment.
The European energy transition will not be completed solely by setting more ambitious goals. It will be completed by intelligently using the economic resources that the decarbonization process itself already generates. If the next review of the ETS manages to reinforce that logic of reinvestment, Europe will have taken an important step not only to reduce emissions but also to strengthen its industry, improve its energy security, and consolidate its technological leadership.
Because the real debate about the ETS is no longer carbon, but investment. And there are few opportunities as relevant to demonstrate that climate policy can also become a top-level industrial policy, capable of building the most competitive, resilient, and sovereign economy that Europe will need tomorrow.