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Court strikes down EU ETS challenge

By control on December 21, 2011

The Court of Justice of the European Union has ruled that the EU's emissions trading scheme is legal when applied to the aviation industry. A group consisting of American Airlines, United, Continental, the International Air Transport Association and the organization Airlines for America had brought an initial challenge of the law to the court in 2009. Barring an appeal, the law, which puts a limit on the carbon emissions of planes flying into the EU, will go into effect on January 1.

“Today’s decision does not mark the end of this case, and Airlines for America is reviewing options to pursue in the English High Court," the company said in a statement. "At the same time, the U.S. government and dozens of others around the world are increasing pressure on the EU to come back to the table to consider a global sectoral approach."

Airlines for America expressed its disappointment in the court's decision, calling it "counterproductive" and adding that it "isolates the EU from the rest of the world." The group said that by applying the ETS to aviation, the EU is disregarding the Chicago Convention, the Kyoto Protocol and the Open Skies Agreement. Its members, the organization said, will comply with the decision under protest.

The court ruled that the EU is not a party to the Chicago Convention and that the ETS doesn't violate any parts of the Kyoto Protocol. Finally, the Open Skies Agreement isn't an issue because the EU ETS would only apply to planes landing in or taking off from the EU.

"[The EU ETS] is not intended to apply as such to aircraft flying over the high seas or over the territory of the member states of the EU or of third states," the court said in its ruling. "It is only if the operators of such aircraft choose to operate a commercial air route arriving at or departing from an airport situated in the EU that they are subject to the emissions trading scheme.

"In this context," the court continued, "application of the emissions trading scheme to aircraft operators infringes neither the principle of territoriality nor the sovereignty of third states, since the scheme is applicable to the operators only when their aircraft are physically in the territory of one of the member states of the EU."

The final decision wasn't a shock to any of the parties involved. Last summer, the court's Germany Advocate General issued a preliminary court opinion asserting that the EU ETS is legal, and this was seen as a sign of things to come.

Tony Tyler, the director general and CEO of IATA, voiced the organization's view that any global climate pact should be created through the International Civil Aviation Organization. “Today’s decision is a disappointment, but not a surprise," he said in a statement. "It does not bring us any closer to a much-needed global approach to economic measures to account for aviation’s international emissions. Unilateral, extra-territorial and market-distorting initiatives such as the EU ETS are not the way forward.

Tyler also noted that opposition to the EU ETS plan has been growing. The ICAO Council even passed a formal resolution, supported by 26 countries, to try to convince the EU to re-think its plans. Airlines in India have been advised not to comply with the EU's scheme, and the U.S. Congress is trying to fine American carriers who participate in the European plan, he said.

"Europe should take credit for raising the issue of aviation and climate change on the global agenda," he said. "But what is needed now is for Europe to work with the rest of the world through ICAO to achieve a global solution. "

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