EU Parliament's Lead ETS Negotiator Liese Strips CORSIA Exemption Language and Backs Unlimited Carbon Removals
Peter Liese's removal of CORSIA exemption language from the EU ETS reform draft clarifies aviation's domestic carbon obligations while expanding scope for permanent removals.
Peter Liese, the European Parliament's lead negotiator on EU Emissions Trading System reform, moved to delete what he described as an inconsistency in the draft reform text around CORSIA, the UN's international aviation carbon offsetting scheme, and separately backed integrating permanent domestic carbon removals into the ETS without any numerical cap. Liese made his position on removals at an industry event on Tuesday (2026-09-08), as reported by Montel.6
Aviation's treatment in EU carbon law has been contested for years. ICAO's decision to bar Zimbabwe's carbon credits from CORSIA — reported by Carbon Pulse on Friday (2026-06-05) — exposed a disconnect between the international scheme's eligibility standards and Paris Agreement rules. That tension affects ETS drafting directly: when CORSIA's standards diverge from the EU's own requirements, exemption language tied to CORSIA compliance creates ambiguity in how carriers account for their domestic ETS obligations. Liese's deletion removes that ambiguity from the text.2
ICE EUA Dec-rolling prices stood at €86.27 per tonne of CO2 as of Tuesday (2026-09-22), with four bearish signals outweighing zero bullish ones in available market data. The direction reflects the weight of legislative uncertainty still pressing on the market. [EUA price data]
Liese's positions feed into a Commission reform proposal that is broad in scope. An August (2026-08-11) legal analysis summarised the proposal's key provisions: from 2036, high-integrity international credits could cover up to 5% of the EU's goal of cutting net emissions by 90% by 2040 against 1990 levels. If such credits prove unavailable, the linear reduction factor — the annual cap tightening rate — reverts to 2.7% rather than 1.7%.5
Scope is expanding domestically too. The Commission proposes phasing municipal waste incineration into the ETS between 2031 and 2034, starting at 25% of verified emissions in 2031 and reaching full coverage from 2034. The scheme already covers around 40% of the EU's total greenhouse gas emissions across heavy industry, energy and aviation.5,3
The Market Stability Reserve is also targeted for recalibration. The Commission wants to adjust the rate at which the MSR absorbs surplus allowances, reflecting the expected reduction in total EUA supply as the cap falls. The specifics remain in draft form.5
On supply, the EEX exchange has confirmed it will stop auctioning allowances under the REPowerEU programme once the €20 billion revenue target is hit, ending one source of incremental permit supply — though no date has been given for when that threshold will be reached.2
Industry groups are urging sequencing restraint on a parallel track. Sarah Hay, climate policy lead at Norsk Hydro, told Montel on Thursday (2026-05-21) that international offsets should remain outside any expansion of the carbon border adjustment mechanism until the ETS itself clarifies their eligibility. "There shouldn't be anything new coming in under CBAM that you don't have under the EU ETS now," she said. Liese's still-evolving positions make that clarification harder to predict.1
The environment committee was due to vote on September 10 (2026-09-10) on a proposal to stop automatically cancelling surplus allowances held in the MSR — a move that, if approved, would preserve more supply in circulation. That vote's outcome, combined with where Liese's positions land in the final Parliament text, shapes what the Commission and Council face when trilogue begins.4