The EU's top court has dismissed a challenge to Europe's carbon market brought by US airlines, upholding a law that will force foreign carriers to comply with rules that extend emissions trading to aviation in 2012.
The European Union's top court has upheld the bloc's right to make foreign airlines participate in the EU carbon market, which is to be extended to aviation from January 1, 2012.
The European Court of Justice (ECJ) in Luxembourg dismissed a challenge by US airlines and ruled that the EU's law was valid. It requires all airlines that use European airports to offset their carbon emissions
"Application of the emissions trading scheme (ETS) to aviation infringes neither the principles of customary international law at issue nor the open-skies agreement," the court said in a statement.
Environmentalists welcomed the ruling.
Revenue will go to fighting climate change
Germany's BUND environmental protection organisation said it was "a victory of common sense."
Though aviation accounts for only 5 percent of humans' carbon emissions, it is the fastest-growing source of the greenhouse gases blamed for climate change.
Compatible with international agreements
While the ECJ ruling is final, there is some flexibility in how the regulations may be applied.
Airlines initially would only be required to pay for 15 percent of the carbon they emit. The law also allows for "equivalent measures," meaning incoming flights to Europe would be exempt if the nation from which they came had measures in place to offset the international emissions of the route.
The US trade group Airlines for America said its members would comply with the EU directive "under protest," while reviewing legal options.
"Today's court decision further isolates the EU from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change," the group said in a statement from Washington.
Not the end of the case
The US Secretary of State has threatened reprisals
Klaus-Peter Siegloch, head of the German Airline Association (BDL) said the ruling did not mark the end of the dispute.
"We may have an EU ruling now, but the political chaos is bound to continue," he said,and urged a global solution.
The lawsuit was brought by US and Canadian airlines acting through Airlines for America, but the protest was supported by China, India and other countries with international carriers.
Critics of the EU rules have argued that under the 1997 Kyoto climate pact, countries agreed to address emissions from aviation jointly through the UN's aviation body, the International Civil Aviation Organization (ICAO).
The EU has taken unilateral action due to the lack of progress in international discussions.
Brussels already sets a cap on the level of emissions allowed from factories and power plants. Emitters exceeding their quotas must buy carbon permits, while those within their limits can sell any unused allowances.
The United States, where environmental legislation has become a focus of disagreement between Barack Obama's Democrats and the conservative Republicans, reacted angrily.
Secretary of State Hillary Clinton last week wrote to European officials, urging them to reconsider. She said the United States was prepared to retaliate, but she didn't elaborate how.
Author: Dagmar Breitenbach (Reuters, AP, AFP)
Editor: Nathan Witkop