eu extends emissions exemption canary islands flights 2035

EU extends emissions exemption for inter-island flights to 2035

EU steps in to protect Canary Islands from rising flight costs

The European Commission has taken decisive action to prevent a likely increase in the cost of inter-island travel – and journeys between the Canary Islands and mainland Spain – caused by higher tax burdens on shipping and airline companies. Brussels has proposed extending until 31 December 2035 the exemption enjoyed by the European Union’s outermost regions (known as RUP, from the Spanish *Regiones Ultraperiféricas*) under the European emissions trading scheme. For air transport, this means companies will not have to bear an additional – almost punitive – cost for carbon dioxide emissions on flights between the archipelago and mainland Spain.

If the initiative goes ahead, residents, businesses, and tourists will avoid a rise in ticket prices that would be particularly damaging for a territory whose connectivity depends almost entirely on air travel. Although commonly referred to as an “emissions tax”, the European mechanism works differently. It is not a tax in the strict sense, but a market for emissions allowances. The European Union sets a cap on emissions for each sector and requires companies – in this case, shipping and airline operators – to surrender allowances equivalent to the carbon dioxide they generate through their operations. These allowances are bought and sold on a market where the price fluctuates constantly. When carbon becomes more expensive, the costs for companies subject to the system also increase, and they typically pass part of that expense on to the end consumer.

And that is where the risk lies for fragmented territories far from mainland Europe, such as the Canary Islands. An analytical report commissioned by the regional government of the Canary Islands revealed that the price of each ticket for flights between the islands would rise by between two and three euros, while the cost of each ticket to the mainland would increase by between 15 and 20 euros. So the effect of this measure, this market for buying and selling emissions allowances, has a direct impact on ticket prices.

Why the outermost regions get special treatment

That is why the outermost regions receive differentiated treatment. The European Commission recognises that territories such as the Canary Islands, the Azores, Madeira, and the French overseas departments face permanent constraints – remoteness, insularity, small domestic markets, and dependence on air travel – that justify exceptions to prevent climate legislation from having disproportionate effects.

This extra cost would not only have affected residents. It would also have undermined the competitiveness of Spain’s leading tourist destination compared with other holiday markets, by raising the cost of flying to the islands at a time when airlines are fine-tuning their fares and capacity amid global uncertainty caused by the crisis in the Middle East. Moreover, higher transport costs would have affected thousands of travellers who fly for work, healthcare, education, or family reasons.

Part of a wider EU climate simplification package

The proposal presented now by the Commission – the EU’s executive body – forms part of a package to simplify European climate regulations. Brussels argues that the extension keeps environmental targets intact, while preserving territorial cohesion and taking into account the specific circumstances of the outermost regions, which are also recognised in the EU treaties, starting with the Treaty on the Functioning of the European Union itself.

The president of the Canary Islands, Fernando Clavijo, welcomed yesterday’s announcement, saying it backs the strategy developed by the regional government over recent years. In his view, the decision shows that transport decarbonisation can move forward without penalising territories far from the continent and without compromising a basic right such as mobility.

Next steps: European Parliament and Council negotiations

The proposal must now be negotiated by the European Parliament and the Council before final approval. If the text goes ahead on the terms set out by the Commission, the Canary Islands will retain a specific regime under the European emissions trading scheme until 2035.

Beyond the legal technicalities, the practical result will be that the archipelago remains protected from an increase in the cost of air travel that would ultimately have hit the pockets of residents and visitors, and would have created a new handicap for its economy. The decision also provides certainty for the aviation and tourism sectors, allowing them to plan investments and routes with a stable regulatory framework for the coming years.

What the Commission’s proposal actually says

Specifically, the European Commission’s proposals on emissions trading include a specific reference to the outermost regions: “Emissions from aircraft operators surrendered up to 31 December 2035 from flights between an aerodrome located in an outermost region of a Member State and an aerodrome located in the same Member State, including another aerodrome located in the same outermost region or in another outermost region of the same Member State, shall continue to be exempt.”

In other words: airlines will not have to buy or surrender emissions allowances for flights between the islands, or between the islands and any other port or airport in mainland Spain.

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