EU Court Decision on Emissions Trading Faces Global Opposition

A decision by the Court of Justice of the European Union (CJEU) which upheld European Union (EU) plans to include international aviation in the EU emissions trading scheme (ETS) from 2012, came under fire from the International Air Transport Association (IATA). At least 43 countries have publicly objected to Europe’s plans, IATA notes, which would tax airlines serving the EU.

“Today’s decision is a disappointment but not a surprise. 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. What is needed is a global approach agreed through the International Civil Aviation Organization (ICAO),” said Tony Tyler, IATA’s director general and CEO.

The CJEU decision represents a European legal interpretation of EU ETS, IATA notes. However, the success of Europe’s plans will depend on how non-European states view its legal and political acceptability. In this respect, there is growing global opposition, IATA said.

The CJEU decision was in response to a legal challenge presented by the Air Transport Association of America (now Airlines for America), a number of U.S. airlines, IATA and the National Airlines Council for Canada.

Together they argued that the EU ETS contravened the Chicago Convention which prohibits such taxation of international aviation. The CJEU ruled that the Chicago Convention does not bind the EU which is not a signatory and that the ETS does not violate any other aspect of international law.

“The CJEU decision may reflect European confidence in European plans. But that confidence is by no means shared by the outside world where opposition is growing. A formal resolution of the ICAO Council supported by 26 countries urged Europe to take a different approach. India is reported to have instructed its airlines not to comply," IATA said.

Similar legislation is moving through the U.S. Congress and other legal challenges are expected, IATA said. And on December 16, the U.S. Secretaries of State and Transportation warned that the U.S. would be compelled to take appropriate action if Europe does not re-think its plans, IATA said. The U.S. letter noted that at least 43 countries have publicly objected to Europe’s plans.

“A global framework for economic measures is a critical component of our strategy to achieve these challenging targets. But we won’t get agreement on a global approach if states are throwing rocks at each other because Europe wants to act extra-territorially, "IATA said.


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