US airlines drop lawsuit against EU carbon tax

A group of US airlines has dropped its private lawsuit challenging a European Union law charging airlines for carbon emissions on flights to and from Europe, calling on the US government to take over the issue. The new law took effect on January 1, drawing dire warnings from governments, airlines and planemakers that it could trigger a global trade war and damage the aviation industry. The suit was originally brought to the London High Court by the Air Transport Association of America, American Airlines and United Continental, but the court referred it to the European Court of Justice (ECJ) in Luxembourg. On December 21, the ECJ gave unreserved backing to the law, and the case was due to return to the London court today. However, Airlines for America, the Air Transport Association of America under a new name, said it had dropped the suit. A court spokeswoman confirmed that the matter had been withdrawn and today's hearing cancelled. Airlines for America said opposition to the EU law was now so widespread that it was appropriate to drop the lawsuit and let governments take the lead. Despite the failure of its action at the ECJ, the organisation said it had been useful in setting the agenda for those opposed to the law, known as the European Union Emissions Trading Scheme or EU ETS. "Our legal action was critical in bringing to light that the EU ETS violates international law and is an exorbitant money grab, which are now key points in the governments' unified opposition to the scheme," said Airlines for America President and CEO Nicholas Calio in a statement. EU Climate Commissioner Connie Hedegaard is in Washington this week to discuss the issue.