Closing Ireland’s aviation climate gap

In 2026, Ireland assumes the Presidency of the Council of the EU. This report examines how the country can place climate action at the heart of its leadership while generating significant revenue through introducing a fair air travel levy and expanding the EU Emissions Trading System (EU ETS) to include international flights.  

Background

Climate change is a major threat to Ireland’s prosperity and growth. The aviation industry is a significant contributor to climate change, yet the sector enjoys a range of privileges exempting it from the climate regulation that other industries are subject to. Furthermore, it has long avoided making even standard fiscal contributions to the state. This deep imbalance in the tax system makes flying – one of the most carbon-intensive activities – artificially cheap, while placing a higher relative burden on household domestic consumption.

Despite these waivers and aviation contributing around 10% of Ireland’s greenhouse gas (GHG) emissions, the Irish government is not only neglecting to reduce the sector’s emissions, but is actively allowing them to rise. Plans to facilitate airport expansion and remove the passenger cap at Dublin Airport have received government support, and the implications are dire.

Despite these challenges, the Irish government has a unique opportunity to play a critical leadership role in reducing aviation emissions and mobilising finance for national and global climate action through two key measures: an aviation passenger tax and greenhouse gas (GHG) emissions pricing.

What’s covered in the report?

• Aviation’s climate and fiscal gap: Aviation is a significant contributor to Ireland’s greenhouse gas emissions (10%). However, the sector benefits from tax exemptions, untaxed jet fuel, and ticket VAT exemptions, while plans to expand airports threaten to further increase emissions. Closing this gap is both an environmental necessity and a fiscal opportunity.

• Revenue potential from fair air travel taxes: Reintroducing a modernised air travel levy, modelled on the UK’s Air Passenger Duty (APD) or French Solidarity Tax, could generate €6.3bn over five years while reducing emissions by 1.8m tonnes, driven by reduced passenger numbers and behavioural changes.

• Ireland’s EU presidency as a leadership moment: Implementing aviation levies and supporting the expansion of the EU ETS to non-EU flights would strengthen Ireland’s credibility as a climate leader. It would also generate substantial revenues, and correct longstanding regulatory exemptions costing Europe billions in lost revenues and unregulated emissions.

• Aviation revenues for a just energy transition: Revenues from air travel levies and the ETS should be reinvested to support households facing energy poverty, drive sustainable aviation innovation, and fund international climate finance, ensuring both a just domestic transition and global climate leadership.

Our recommendations

• We recommend that the Irish government should: Introduce an Irish Aviation passenger tax based on the UK’s APD.

• Advocate for the EU to expand the scope of the EU ETS to include international aviation, particularly during its presidency of the Council of the EU.

• Earmark revenues generated from an expanded ETS and Irish aviation passenger tax for:

  • Driving innovation in fossil free alternatives to polluting air travel.

  • Providing general budgetary support in Ireland to reduce emissions and energy poverty.

  • Contributing to climate finance in climate vulnerable third countries, in line with Ireland’s international commitments.