The European Court of Justice has rejected a legal challenge by US airlines to the inclusion of carriers in European emissions trading.
In a preliminary finding, the advocate general of the Court of Justice of the European Union ruled the requirement for airlines to join the EU emissions trading scheme (ETS) from January would not breach international law.
The US Air Transport Association (ATA) and leading US carriers brought the case in an effort to stop the launch of the scheme, arguing the Chicago Convention on international aviation – which prohibits any fuel tax on international flights – made the scheme illegal. They also argued the scheme would breach the US-EU open-skies agreement. The court rejected both arguments.
The scheme will require any airline flying into or out of an EU airport to hold permits to emit carbon dioxide, the main contributor to global warming.
Airline association Iata expressed disappointment, but director general Tony Tyler said: “This is only part of a complex set of developments concerning the EU ETS. The Court of Justice’s opinion that Europe is within its rights is not shared by the international community.”
Representatives of more than 20 governments – including the US, China, India, Russia and Japan – signed a pledge to challenge the scheme last week. The airline industry wants a global scheme established by the International Civil Aviation Organisation (ICAO) – a call repeated this week by International Airlines Group chief executive Willie Walsh at Abta’s Travel Convention.
The EU argues ICAO has failed to come up with proposals. One study has suggested emissions trading will cost the global airline industry 360 million euros in the first year. However, the true costs are unknown.
Mehran Massih of law firm Shearman and Sterling, a specialist in the area, said: “Most of the airlines’ emissions will be covered by free [carbon] credits, but there will be a shortfall for many airlines. The market for aviation credits has not yet really developed.”
He added: “EU and even US regulation of pollution from mobile sources coming into their borders is nothing new. Pollution from ships has been regulated like this for years.”