The ETS investment engine: scaling Europe’s strategic e-fuel market for shipping and aviation

The EU Emissions Trading System (ETS) review proposal published in July 2026 is intended to make the EU’s most vital climate policy mechanism fit for its 2040 climate targets. It also carries the ambition to turn the ETS into an ‘’engine for innovation and investment”.

This policy brief looks at the investment dimension of the ETS proposal with respect to the aviation and maritime sectors. They are major contributors to the ETS revenue generation. We argue, however, that the proposed framework is not fit for purpose to adequately support clean fuel investments in these hard-to-abate sectors.

The ETS Review is an opportunity to set up a tailor-made investment tool to de-risk and boost the production and uptake of e-fuels, using the ETS funds from aviation and shipping. Early financial support is crucial for the development of a domestic e-fuels value chain, Europe’s geostrategic autonomy and the EU’s industrial position in the global competition for clean technologies. RFNBOs are the most scalable fuels needed to reach the targets under FuelEU Maritime and ReFuelEU Aviation.

• 1 Use national ETS revenues: earmark 50% of national ETS revenues for decarbonisation support in priority sectors, including for the production and uptake of aviation and maritime e-fuels, and ensure compliance via stricter reporting rules.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →