EU court upholds carbon trade scheme for aviation

Europe's highest court has upheld the EU's right to impose its cap-and-trade scheme on international airlines using European airports, rejecting a lawsuit brought by North American airlines. The European Court of Justice in Luxembourg yesterday dismissed arguments that the programme infringes on national sovereignty or violates international aviation treaties. The carbon trading programme, due to go into effect from January 1, is one of the widest-reaching measures adopted by any country or regional bloc to regulate emissions of greenhouse gases blamed for global warming. The EU has calculated the costs to passengers will be minimal, ranging up to €12 (Dh57.7) on a one-way trans-Atlantic flight. For many flights it will be about €1. The suit was brought by US and Canadian airlines through the industry body Airlines for America, but was supported by China, India and other countries with international carriers. Under the scheme, each airline will be allocated pollution permits slightly less than its average historical emissions record. If it exceeds its limit it can buy permits from other airlines that have emitted less than allowed and have leftover permits to sell. Emissions are counted for the entire route of an aircraft that touches down in Europe. The ruling by the 13 judges said the EU was within its rights to impose the scheme on commercial airlines that choose to operate at European airports, and thus fall under EU jurisdiction. It also rejected the appeal that the scheme violates the Open Skies treaty prohibition against unilateral taxation or discriminatory treatment. It said the cost to the airline is subject to an open market, from which it also may profit, and is not a tax. It also treats all flights equally, as long as they land or take off from one of the 27 EU member countries. The directive, enacted in EU law in 2008, aroused an international protest beyond those airlines that joined the suit. The US passed a measure two months ago directing the transportation secretary to prohibit US carriers from participating in the programme if it is unilaterally imposed. US secretary Ray LaHood and Secretary of State Hillary Clinton have written to the EU commission reiterating Washington's objections on "legal and policy grounds", and said the US would respond with "appropriate action." It did not elaborate. China and India complained about the issue at the recent 194-nation UN climate conference in South Africa. New Delhi reportedly told Indian carriers to defy the directive by refusing to submit carbon emissions data to the EU. But the EU said all major international carriers, including those behind the suits, were among some 900 that have applied for free permits, and it anticipated full compliance. Peter Liese, a German Christian Democrat who led discussions in the European Parliament on the law, said: "I cannot imagine a situation where the European Parliament amends legislation just because of pressure from China or the United States. We [in Europe] represent 500 million people and the biggest market in the world." EU defies critics 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 Organisation (ICAO). More than a decade on, talks in that forum have not yielded significant progress and European Court of Juctice's Advocate General Juliane Kokott said the EU was within its rights to act unilaterally. The EU 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.