EU ETS review leaves e-fuel investment gap, Transport & Environment says

The briefing, carried by CleanTechnica on 2 November, argues the review proposal "is not fit for purpose to adequately support clean fuel investments" in aviation and maritime. Those are the two sectors the ETS leans on most heavily for revenue. T&E wants the money routed into a dedicated investment tool rather than left to existing funds.

Its central ask is simple arithmetic. National governments should earmark 50% of their ETS revenues for decarbonisation support in priority sectors, including production and uptake of aviation and maritime e-fuels. Stricter reporting would check compliance.

That is a big number to attach to a review sold as an innovation engine. The proposal, published in July 2026, is meant to align the EU's flagship carbon market with its 2040 climate targets. T&E says the investment architecture has not caught up with that ambition. It wants aviation and shipping brought inside the ETS Investment Booster, the Industrial Decarbonisation Bank and the Modernisation Fund, so hard-to-abate sectors are treated consistently.

The group also proposes a dedicated e-fuels funding pool. It would channel ETS revenues and other sources into a market intermediary by 2028. Alongside it, T&E backs market-making schemes such as double-sided auctions. It says these are needed to remove the barriers holding back pending final investment decisions and to connect supply with offtake. Sustainable aviation fuel allowances and the shipping-related SMAP scheme get a qualified welcome: useful for offtake support, but no substitute for structural de-risking. The brief frames renewable fuels of non-biological origin as the most scalable option for hitting FuelEU Maritime and ReFuelEU Aviation targets.

Investment data points one way

The timing matters because the wider European funding picture is not generous. Tech.eu reported on 2 November that it tracked more than 60 European tech funding deals worth over €1.3 billion in the previous week. AI took €815.6 million, healthtech €121.1 million and fintech €104.1 million. The UK accounted for €1 billion of that total, Switzerland €74.4 million and Spain €59.5 million.

Those are venture and debt numbers, not energy infrastructure, and the two markets behave differently. Still, the concentration is the point. Capital is clustering in software and health, not in first-of-a-kind fuel plants. Those plants need years of guaranteed offtake before a board will sign.

T&E's answer is to make the carbon market do that job. Whether member states accept an earmark of half their ETS receipts is another question. National budgets currently treat that revenue as general income.

What Europe is being measured against

The comparison T&E keeps making is with China. It made it at length in an earlier piece published by CleanTechnica on 29 October. That article, drawing on a reporting trip, puts two-thirds of all new cars in China as electric and 40% of truck sales as electric. Battery swapping there operates as a commercial service rather than a pilot.

It also cites Ningde, described as producing 300GWh of battery capacity, more than the whole of Europe. The author quotes an unnamed interlocutor saying "you have politicians, we have statesmen". It notes France and Germany had agreed a deal to remake Europe's auto industry.

Those figures come from a single T&E-authored piece and are not independently verified. Treat them as the group's own account of what it saw, not as audited statistics.

Elsewhere in the briefing pack

Two other items touch industrial policy without addressing hydrogen or e-fuels directly. The Diplomat reported on 30 October that India deployed more than 2,500 security personnel in Arunachal Pradesh in the last week of October. It said protests over the 11,200-MW Upper Siang hydropower project on the Siang river turned violent after police used tear gas on 23 October. Beijing is building a 60,000-MW project on the same river at Medog.

In Shanghai, the South China Morning Post reported on 30 October that Cambricon co-founder Chen Yunji told a science forum that within 10 years AI models would improve AI models and AI chips would improve AI chips. He described recursive self-improvement as the key development. SpaceNews, meanwhile, published a podcast episode on 29 October with Epsilon3 chief executive Laura Crabtree on speeding up testing and certification in space companies.

None of that changes the Brussels arithmetic. The ETS review is the instrument. The question T&E poses is whether the revenue from flights and voyages will be recycled into fuel plants or absorbed elsewhere.