European court approves carbon trade for aviation

December 21, 2011 - 5:35 AM

AMSTERDAM (AP) — The European Union's highest court has upheld the EU's right to impose its cap-and-trade scheme on international airlines using European airports, rejecting an appeal from U.S. airlines.

The European Court of Justice in Luxembourg dismissed the argument Wednesday that the program infringes on national sovereignty or violates international aviation treaties.

The carbon trading program is due to go into effect Jan. 1.

It 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 suit was brought by U.S. airlines acting through the industry trade organization Airlines for America, but the protest was supported by China, India and other countries with international carriers.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

AMSTERDAM (AP) — The European Union's highest court is set to rule Wednesday on a challenge by U.S. airlines to an EU regulation charging them for their carbon pollution when using European airports.

The long-awaited ruling would come just 10 days before the charge is take effect at the turn of the year.

It is one of the widest reaching measures adopted by any country or regional bloc to regulate emissions of greenhouse gases blamed for global warming.

Activists anticipate the European Court of Justice in Luxembourg will uphold the legality of the EU directive that would bring all aircraft landing or taking off in Europe under its cap-and-trade scheme.

Last October the court's legal adviser delivered an opinion that the airlines' arguments were invalid. While that is not binding on the 13 judges, the court usually follows the advocate general's advice.

If the court upholds the 2008 law enacted by the European parliament, the EU expects the airlines to comply despite their objections, said Damien Meadows, the EU's director of carbon markets for aviation and shipping.

"If the court says the system is unlawful, we will change it," he told reporters at a recent briefing in Brussels.

As of Jan. 1, 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.

Airlines for America, an industry trade organization previously known as the Air Transport Association of America, challenged the directive, arguing the EU was infringing the sovereignty of other nations and contravening international aviation agreements.

The airlines argued that the EU lacked the jurisdiction to require permits for emissions produced during the entire flight, or even stretches that cross the air space of non-EU countries.

The plan puts a market-determined price on carbon emissions, and is intended to force the airlines to operate more efficiently and develop low-carbon fuels. About 3 percent of all human-caused emissions come from aviation, but are growing rapidly.

In a letter to the European Commission last Friday, U.S. Secretary of State Hilary Clinton and Transport Secretary Ray LaHood reiterated Washington's objections on "legal and policy grounds," and said the U.S. would respond with "appropriate action." It did not elaborate.

China and other countries with international fleets also have objected, and the Indian government reportedly has told Indian carriers to defy the directive by refusing to submit carbon emissions data to the EU.

The Indian threats were "not a surprise" and were a case of "muscle flexing," said Pamela Campos, an attorney for the Washington-based Environmental Defense Fund in a conference call with reporters Tuesday. "Like any international corporation, airlines have an obligation to comply with the law where they operate," she said.

The EU has calculated the cost to the airlines, which almost certainly will be passed on to the consumer, will range from euro2 ($2.60) to euro12 ($15.70) for a one-way trans-Atlantic flight.

"Commercially, it's a non-event," said Bill Hemmings, of the nonprofit group Transport and Environment in Brussels, noting that airlines routinely adjust their fares hundreds of times a day.