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A plane leaves a white vapor trail on a blue sky
US airlines are against inclusion in the emissions trading planImage: dpa

Aviation dispute

July 6, 2011

US-based airlines have launched a challenge against the European Union over including them in the EU's emissions trading scheme. The companies say the bloc doesn't have the right to regulate intercontinental air travel.


US airlines have taken their battle against the European Union's emissions cap to the European Court of Justice, Europe's highest court.

The companies argue that making foreign airlines pay for carbon permits violates international agreements.

Beginning next year, the EU will force airlines flying to and from Europe to buy carbon permits for 15 percent of every flight's emissions under the 27-nation bloc's emission trading scheme (ETS).

The program already applies to 11,000 factories and power plants.

United Continental and American Airlines joined the Air Transport Association of America before the European Court of Justice on Tuesday, and argued that imposing the system on foreign companies violated international aviation and climate change agreements.

Chinese airlines have also criticized the EU's plans, saying it would cost them an additional 800 million yuan (85 million euros, $123 million) a year.

Under the system, airlines will be given permits to emit a certain amount of carbon dioxide and will have to purchase certificates for additional emissions.

Who gets to decide?

While admitting that the greenhouse gas emissions from aviation pose an environmental problem, the airlines called for a global response to the problem, Derrick Wyatt, the lawyer representing the airlines, told the court.

Planes on the tarmac waiting to take off
The ETS include emissions from planes still on the groundImage: AP

"The only way of ensuring a coherent framework for reducing emissions from aircraft is through multilateral agreement, rather than through unilateral and piecemeal regulation, which can only lead to chaos at the international level," he said.

Wyatt added that it the European Union did not have the authority to charge airlines for emissions that take place outside of the 27-member bloc.

"The EU does not have competence to regulate third country airlines in third country airspace," Wyatt told the court. "It is astonishing that a US airline must acquire an EU license to cover emissions at a US airport."

Under 9 percent of emissions occur in the EU on a typical flight from San Francisco to London, Wyatt added, compared to 25 percent over the Atlantic, 37 percent over Canada and 29 percent over the United States.

Economically efficient

The European Commission, however, expressed confidence that the Luxembourg-based court will side with Brussels, saying the system was consistent with international law.

They argued that the bloc included aviation in its trading scheme after airlines themselves chose the system in preference to other tools such as eco-taxes or charges on jet fuel.

A plane taking off
The ETS makes economic sense for airlines, the EU saidImage: AP

"A market-based system is the system that International Air Transport Association and the airlines have always been urging - a system that is the most economically efficient," European Commission lawyer Eric White told the court.

"The claimants seem to think that extra-territoriality equals illegality - of course that's not the case," he said, adding that valid laws have an indirect impact in third countries, such visa requirements or US demands for the personal data of arriving air travelers. .

History fighting emissions cuts

The airlines have a long history of trying to disrupt measures that would lead to cuts in emissions of the gasses that lead to climate change, according to Bill Hemmings of the Brussels-based group Transport and Environment.

"This legal case is another cynical attempt to derail a modest and cost effective climate initiative that would add little more than 6 euros to the price of a transatlantic flight," he said in a statement. "Environmental organizations strongly support the EU-ETS which is a welcome first step towards dealing with aviation's growing climate impact."

Transport and Environment is among the parties intervening in defense of the trading scheme.

The EU's decision to base the certificate requirement on landings and take-offs inside the bloc may end up giving it the legal right to include foreign airlines in the emissions trading system, according to Dominik Greinacher, who specializes in environmental law and emissions trading at the Berlin law firm Scholtka and Partner.

"The case depends on the international law - not only EU law - and since the international law is in conventions, there is a case there for the airlines," he told Deutsche Welle, adding that he could not predict how the court would rule.

Author: Sean Sinico

Editor: Nathan Witkop

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