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The European Parliament is working towards an ENVI Committee vote on the revision of the European Union Emissions Trading System (EU ETS) on 01 December 2026, followed by a plenary vote later that month. With compromise negotiations taking place throughout October and November, political groups are setting out their priorities on transport coverage, competitiveness and support for decarbonisation. ENVI leads the file, with Peter Liese (EPP, Germany) as rapporteur. The Transport Committee (TRAN) is preparing an opinion under Matteo Ricci (S&D, Italy).

On aviation, the Greens propose extending the ETS to all flights departing from the European Economic Area, beyond the Commission’s proposed extension from 2029 to destinations within 5,000 km of Frankfurt airport. They also propose requiring airlines to surrender allowances for the climate impact of contrails from January 2029. In TRAN, EPP shadow rapporteur Nina Carberry has taken a different approach, opposing the extension to international flights and favouring a realistic intra-EU scope.

The inclusion of smaller vessels is another dividing issue. Renew Europe proposes bringing all vessels between 400 and 5,000 gross tonnage into the ETS from 2029, including passenger ships and mixed passenger and freight ferries. The Greens also support including these categories, whereas the Commission would consider their inclusion only after 2031.

EPP representatives in TRAN favour greater caution. MEP Carberry opposes including vessels below 5,000 gross tonnage at this stage. On the related maritime emissions monitoring regulation (MRV), Isabelle Le Callennec calls for a comprehensive impact assessment before extending coverage to smaller vessels and for suitable monitoring rules to be operational before offshore activities enter the ETS. Renew’s MRV shadow rapporteur Jeannette Baljeu also favours phasing in these provisions, while S&D broadly supports the Commission’s approach with gradual implementation for smaller vessels.

Renew further proposes strengthening safeguards against the diversion of container transhipment to neighbouring non-EU ports, extending the proposed 150-nautical-mile criterion to 300 nautical miles. Its TRAN representative Asger Christensen has also stressed the need to avoid double payment under the ETS and a future IMO framework, while protecting European operators and hubs from competitive disadvantages.

There is more common ground on using ETS revenues to support decarbonisation. Peter Liese proposes directing 75% of revenues, excluding those used for indirect cost compensation, towards the industries covered, compared with the Commission’s proposed 50%. S&D would require all revenues to support decarbonisation, climate adaptation and associated social consequences, with at least 60% specifically allocated to decarbonising ETS sectors. The percentages therefore apply to different revenue bases. Both support making rail eligible for funding, while Ricci’s proposal in TRAN to earmark 75% of revenues for ETS sectors attracted broad support.

Renew also seeks higher support for sustainable aviation and maritime fuels and would retain support for HEFA aviation fuels beyond 2029, considering their proposed exclusion premature. It proposes extending exemptions for connections to the EU’s outermost regions until 2040.

The coming weeks will determine how these proposals are reflected in Parliament’s position before negotiations with the Council.