This is an HTML version of an attachment to the Freedom of Information request 'Meetings between Commissioner Frans Timmermans and industry'.


Air Transport is one of the industries most 
affected by carbon leakage

Sectoral distribution of the carbon leakage (2025-2050)
(leakage due to EU-ETS policy)
According to a cross-sectoral study 
made for AFEP*
by E3 Modelling using the 
GEM-E3 model**, 
Air Transport ranks 
in the sectors affected by
carbon leakage
just behind the
Cement sector.
(*) AFEP = Association of French Private Companies
(**) GEM-E3 model :
Source : AFEP / E3 Modelling -

Illustration of competition distortion induced by 
potential EU measures

Via a European hub
(9300 km)
EU SAF Mandate
of the round trip 
Route example :
mileage is subject to a EU 
Although non-EU competitors 
Madrid – Beijing - Madrid via a hub
will also be subject to a SAF 
incorporation obligation when 
+ Fuel Tax
departing from a European 
airport, carriers with hubs 
located close to Europe (e.g. 
Istanbul) will have a limited 
cost penalty.
no EU measure
EU-ETS and Fuel Tax
Intra-EEA Traffic connecting to 
no EU measure
and from non-EEA countries 
Via Istanbul
(illustrated here with a Madrid 
(9700 km)
passenger connecting to/from 
Only 14% of the round 
Beijing) pays EU-ETS and a 
trip mileage is subject to a 
EU mandate
Fuel Tax when connecting via 
+ no EU-ETS
a European hub, while no EU-
+ no Fuel Tax
ETS and no Fuel Tax is 
applicable when travelling via 
non-EEA hubs.
(*) : EU SAF mandate from Madrid to Istanbul 
can be significantly circumvented though 
fuel tankering


Fuel tankering : case analysis of Turkish 
Airlines on Istanbul-Madrid-Istanbul route 

ƒ A SAF mandate in the EU will increase fuel cost in Madrid, and 
Widebody fleet (twin aisle)
create an incentive for Turkish Airlines to carry extra fuel from 
Istanbul (tankering).

Airbus A330, Boeing B777

83% of the seat capacity to Madrid
ƒ Turkish Airlines is able to load in Istanbul more than 90% of the 

Able to fly Istanbul-Madrid round-
fuel that they would normally load in Madrid.
trip without refueling in Madrid.
ƒ With a EU SAF mandate of 7% or more, Turkish Airlines would 
have a positive financial incentive to do tankering: the 10% 
increase in fuel consumption due to tankering would be more than 
offset by the gains of buying cheaper fuel in Istanbul rather than 
Narrowbody fleet (single aisle)

Airbus A320, Boeing B737
ƒ Tankering and extra fuel consumption would result in 

17% of the seat capacity to Madrid
approximately 6000 tCO2 additional emissions each year for the 

Able to fly Istanbul-Madrid and 
Istanbul-Madrid route only.
more than half of the Madrid-
Istanbul flight with fuel loaded in 
ƒ Through tankering, Turkish Airlines would also not use the SAF 
that they should buy in Madrid, resulting in more than 3000 tCO2 
additional emissions.
Based on 2019 schedules

In the absence of a CBAM, free allowances
should be considered for connecting traffic

General description of a EU-ETS scheme addressing competition distorsion risks:
Revision of the 
• The current scheme of EU-ETS, including upcoming reduction in free allowances, 
current scheme, 
should apply to intra-EEA travel, excluding intra-EEA travel in connection to/from non-
and application of 
EEA countries.
Green Deal 
• The reduction of free allowances currently planned needs a proper calibration, taking
into account the difficult situation of the aviation sector in Europe.
• Intra-EEA travel connecting to non-EEA countries is subject to carbon leakage risks and 
New allowances 
for intra-EEA 
competition distortion factors.
traffic connecting
• As a consequence, carriers exposed to this market could be granted free allowances on 
to/from non-EEA 
a separate basis, based on the percentage of their intra-EEA traffic which connects
to/from non-EEA countries.

In the absence of a CBAM, free allowances
should be considered for connecting traffic

Application considerations:

Free allowances were distributed to each carrier for the period 2012-2020 according to ratio of 0.6422 allowances per 1,000 tonne-kilometres 
flown in 2010.

Traffic taken into account in 2010 for the distribution of free allowances was including intra EEA-traffic connecting to/from non-EEA countries. 
In order not to give to this type of traffic free allowances twice, the reference amount of free allowances initially given to each carrier should 
be diminished in proportion to its 2010 traffic connecting to/from non-EEA countries. 

Based on this decreased 2010 reference for free allowances, Green Deal measures could be applied through a reduction of free allowances 
(e.g. from 82% free, 15% auctionned, 3% reserve to 42% free, 55% auctionned, 3% reserve). This would result in a new general allocation 
calculated for each carrier. 

On top of this evolution of the current scheme, free allowances would be granted each year to each carrier for their emissions related to 
travel of intra-EEA passengers connecting to non-EEA destinations. The number of free allowances allocated for this purpose could be 
calculated each year by multiplying the CO2 emissions and the share of connecting traffic (expressed in passenger-kilometers) of previous 

The total number allocated to a carrier for a specific year would be the sum of the general allocation, and free allowances attributed to cover 
intra-EEA traffic connecting to/from non-EEA countries.