EU ETS backed by European court

Polluters must pay but US bill may ban US airlines from complying

After a protracted legal fight, the German advocate general of the European Court of Justice, mother of six, Juliane Kokott, has issued an opinion that the EU Emissions Trading Scheme does in fact conform to international law.

The case had been brought by American Airlines, Continental and United, backed by the Air Transport Association of America, and will now be referred back to the UK High Court to make a formal ruling.

The objections to the scheme stemmed from the fact that if an operator flies from the US to the EU, the majority of their emissions take place over US, Canadian and international territory, but operators are required to surrender allowances for emissions related to the entire flight. It is therefore seen as being an extraterritorial charge and in conflict with numerous international treaties including the Chicago Convention and the Openskies treaty. However, the ECJ has rejected these claims and reaffirmed the legality of the scheme.

The airlines are expected to appeal this decision so it is unlikely to be the end of the debate. And should this opinion be upheld by the High Court, and the EU ETS continues as it is, there are further challenges expected through ICAO as well as several threatened trade sanctions.

There is even a bill currently working its way through the US legislative process that would ban their airlines from complying with the scheme, if passed this would effectively prevent all US traffic from flying transatlantic without breaking either US or EU legislation.”

Despite these potential challenges, this opinion does mean that operators will need to continue working to comply with the scheme, and preparing their 2011 emissions reports for verification.

The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today issued the following statement in response to the preliminary opinion issued by the Advocate General in the European Court of Justice regarding the lawsuit challenging the unilateral application of the European Union Emissions Trading Scheme (EU ETS) to international aviation

The US Air Transport Association said: "The Air Transport Association is disappointed that Advocate General Kokott does not believe that the European Union is bound by the Chicago Convention, the treaty governing aviation, and that the unilateral application of the EU ETS to international aviation otherwise does not violate law.

ATA's view that the extension of this unilateral, regional scheme to aviation violates international law is supported by more than 20 countries, (including Brazil, Russia, India, China, Japan, the United States and many others), which recently reconfirmed their opposition to the EU.

"Today's action is an important step in the court process, but, as it is a non-binding, preliminary opinion, it does not mark the end of this case. The opinion will provide a basis on which the judges assigned to the case can further deliberate and come to a full and unanimous decision. In complex cases such as this one, it would not be unusual for the full Court's final opinion to vary from the preliminary opinion."

The ATA, which brought the legal action in 2009 on behalf of all of its members, said in its argument that aviation greenhouse gas (GHG) emissions should be regulated on a global sectoral basis. ATA also opposes the application of the EU ETS to U.S. airlines on policy grounds, as it imposes an exorbitant tax that siphons away from aviation the very funds it needs to continue to invest in aircraft technology, sustainable alternative fuels and infrastructure advances to build upon its strong record of fuel efficiency improvements and emissions savings.

Valere Tjolle
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