Aviation Emissions Case Hits European Court of Justice

11 July 2011

The European Court of Justice last week started proceedings on the EU's controversial legislation requiring all airlines flying to and from Europe to pay a fee to offset emissions from 2012 onwards. Airlines around the world have lashed out at the proposed element of the bloc's Emissions Trading System (ETS), arguing that the measure will be costly, illegal, and particularly unfair for long-haul carriers.

Three US airlines (American, Continental, and United) and the Air Transport Association of America (ATA) have taken legal action against the EU legislation, claiming it is against international law. Success by the ATA and the US airlines will have profound implications for the future of EU climate policies relating to aviation, and possibly also to maritime emissions as well. Other airline groups have warned of a possible "air war" if the legal status of the EU legislation is not clarified soon.

From the 1 January onwards, non-EU airlines will have to surrender allowances for their greenhouse gas emissions upon arrival in or departure from an EU airport. Even though a high proportion of the allowances will be allocated free of charge, this proportion is based on historical emissions, and aviation emissions are growing rapidly.

The US airlines and the ATA are mainly contesting the unilateral and extra-territorial nature of the EU's legislation.

"As proposed, the EU ETS provisions would regulate an entire flight from across the United States to the EU, even though the flight would be in EU airspace for only a tiny fraction of the journey," ATA told the court. "If the EU ETS regime implemented an international agreement agreed by third countries, as well as by the EU, we would not be here today."

To be more precise, it is argued that the EU measure violates the Kyoto Protocol - which provides that parties should regulate greenhouse gas emissions from international aviation through the International Civil Aviation Organization (ICAO), several articles of the Chicago Convention, the EU/US Open Skies Agreement - which liberalises air transport between the US and the EU, as well as established principles of customary international law.

The European Commission remains convinced that the Luxembourg-based court will rule that its legislation is consistent with international law.

"We don't intend to withdraw or amend the law at all," said Isaac Valero-Ladron, a spokesperson for EU Climate Commissioner Connie Hedegaard. "The purpose of the directive is to reduce emissions, not to charge companies. We can't impose a burden only to European airlines and not include others, it would be distortion of competition."

The advocate general of the European Court of Justice is expected to issue an opinion on 6 October, which can then be accepted or rejected by the court. The final judgment will likely be issues some six months following the preliminary finding.

ICTSD Reporting; "European Court of Justice begins hearing US airlines' ETS challenge," AIR TRANSPORT WORLD, 6 July 2011; "The ATA case against the EU ETS," ENVIRONMENTAL LAW & MANAGEMENT, October 2010; "ATA: EU Trying To Regulate U.S. Emissions," AVIATION WEEK, 6 July 2011.

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