The process of harmonization of Cyprus with the European Directive 2023/958 on greenhouse gas emissions in the aviation sector enters the final stretch. Today, the Parliamentary Committee on the Environment will consider for final placement the bill entitled "The Establishment of the Greenhouse Gas Emission Allowance Trading System (Amendment) Law of 2025". Immediately afterwards, it is expected to be forwarded to the Plenary for a vote.
This is a crucial step, as the passage of the bill is expected to allow the filing of the relevant infringement procedure that is underway by the European Commission due to a delay in the transposition of provisions of the Directive into national law.
The bill is essentially a transposition into Cypriot law of European legislation that strengthens the Emissions Trading System (ETS) and concerns, among other things, the phasing out of free emission allowances in the aviation sector and a complete abolition in 2026.
According to the provisions of the bill, from 2027, airlines may pass on the increased cost of purchasing emission allowances to consumers, which may lead to increases in air ticket prices. This raises concerns about the economic impact on households and the general accessibility of air travel.
An important provision of the bill is the commitment, by 2030, of a maximum number of 20 million emission allowances exclusively for commercial operators using sustainable aviation fuels, with the aim of strengthening the green transition in the aviation sector. The provisions will apply equally to European and non-European airlines. In Cyprus, five airlines are affected.
The adoption of the amending law was deemed imperative following the reasoned opinion sent by the European Commission to the Republic of Cyprus on 7 May 2025. The Commission notes that, despite previous communications, Cyprus had not yet incorporated into its national law specific points of the Directive, notably articles relating to monitoring and reporting obligations for air transport, as well as the compatibility of the ETS with the global CORSIA scheme (Carbon Offsetting and Reduction Scheme for International Aviation).
According to the Department of the Environment, the disputed provisions have now been incorporated into the bill that will be put before today's meeting of the Committee. In case the Plenary approves the law, the competent services of the Republic of Cyprus will immediately inform Brussels, with the aim of avoiding fines and other sanctions by the Court of Justice of the European Union.
The European Commission has already indicated that, if the transposition of the envisaged provisions is not completed immediately, it will consider financial penalties, as provided for in Article 260(3) of the EU Treaty. It is noted that Cyprus was obliged to comply by 31 December 2023.
On the basis of the bill, the Department of the Environment informs the European Commission and the Parliamentary Committee on the Environment of the House of Representatives, about the use of the revenues and the measures taken, including this information in the reports submitted. It is stressed that tightening the regulatory framework for emissions in the aviation sector is an important step towards achieving the EU's environmental objectives, but this transition may be accompanied by social and economic consequences.
