Source Source In Cyprus

NICOSIA, Cyprus: Cyprus is in the final stages of harmonising with European Union Directive 2023/958 on greenhouse gas emissions in the aviation sector as parliament prepares to vote on legislation that could prevent EU fines.

The parliamentary Environment Committee will today examine for final consideration the bill titled “The Greenhouse Gas Emission Rights Trading System (Amendment) Law of 2025”. The legislation is expected to be forwarded to the plenary session for voting immediately afterwards.

The move represents a critical step, as passage of the bill is expected to allow the archiving of ongoing infringement proceedings by the European Commission due to delays in transposing the directive’s provisions into national law.

The bill essentially transposes into Cypriot law European legislation that strengthens the Emissions Trading System (ETS) and concerns, among other things, the gradual elimination of free emission allowances in the aviation sector with complete abolition by 2026.

Airline ticket prices may rise
According to the bill’s provisions, from 2027 airlines may pass on the increased cost of purchasing emission allowances to consumers, potentially leading to increases in airline ticket prices.

This possibility raises concerns about economic impacts on households and general accessibility to air travel.

A significant provision of the bill is the commitment, by 2030, of a maximum 20 million emission allowances exclusively for commercial entities using sustainable aviation fuels, aimed at strengthening the green transition in the aviation sector.

The provisions will apply equally to European and non-European airlines. Five airlines in Cyprus are affected.

EU warned of potential sanctions
Passage of the amendment law was deemed urgent following an opinion sent by the European Commission to the Republic of Cyprus on 7 May 2025.

The Commission found that, despite previous communications, Cyprus had not yet incorporated specific points of the directive into its national law, mainly articles concerning monitoring and reporting obligations for aviation, as well as ETS compatibility with the global CORSIA system (carbon offsetting and reduction scheme for international aviation).

According to the Department of Environment, the disputed provisions have now been incorporated into the bill that will be presented to today’s committee session.

Should the plenary approve the law, competent services of the Republic of Cyprus will immediately inform Brussels, aiming to avoid fines and other sanctions from the European Union Court of Justice.

The European Commission has already indicated that if the transposition of the required provisions is not completed immediately, it will consider monetary sanctions as provided for in Article 260(3) of the EU Treaty. Cyprus was required to comply by 31 December 2023.

Revenue reporting requirements included
Under the bill, the Department of Environment will inform the European Commission and the parliamentary Environment Committee of the House of Representatives regarding revenue use and measures taken, including this information in submitted reports.

The strengthening of the regulatory framework for emissions in the aviation sector represents a significant step towards achieving the EU’s environmental goals, but this transition may be accompanied by social and economic impacts.