Airlines cannot avoid EU carbon trading, say green lawyers

Preliminary decision expected tomorrow on whether bringing aviation into emissions trading scheme violates international law

US airlines will have no choice but to comply with EU carbon trading rules if a European Court decision goes against them tomorrow.

Brussels plans to bring aviation into its emissions trading scheme (EU ETS) from January, in effect imposing a charge on carriers per tonne of carbon emitted for all flights in and out of Europe, which, according to some estimates, will cost airlines more than $10bn by 2020.

Led by trade body the Air Transport Association of America, US airlines are arguing at the European Court of Justice in Luxembourg that the EU’s plans contravene international aviation agreements and are therefore illegal.

An advocate general will issue a preliminary judgment on the case tomorrow at 8.30am local time, which is expected to give a clear indication as to the outcome of the case ahead of a final legal decision in early 2012.

Concerns have been raised that even if the legal ruling rejects their claims, US carriers would be prevented from participating in the scheme through a bill currently going through Congress that is purposefully designed to block the EU’s plans.

If passed the US bill would impose fines of about $25,000 per day on any US airline complying with the EU’s emissions trading rules, an expense which would almost certainly be matched by EU-imposed penalties for non-compliance, such as suspended landing rights or even confiscating planes.

Annie Petsonk, an international counsel at the US-based Environmental Defense Fund (EDF), told reporters on a conference call yesterday that US airlines were attempting to set up a “tit-for-tat fight” between the US and EU.

“The [US] airlines are setting themselves between a rock and a hard place,” she said. “There’s a perception that if they play hardball the Europeans will change the law.”

However, Petsonk said this brinkmanship was likely to rebound on the airlines, arguing that the chance of such a provocative bill being approved by the Senate is small.

“It is not a bill any CEO of an airline would want to see come in,” she said. “No one wants to be in a position where they can’t comply with both laws.

“The diplomatic and economic ramifications would be very large [and] at the top levels of government there is no appetite for that level of dispute. I would not be surprised if the bill passes the House… [but] the likelihood is that the Senate, with their cooler heads, will not allow it to move forward.”

The EU has consistently refused to back down over its plans, despite facing intense lobbying to exempt airlines from non-EU states such as China, Russia and India, as well as the US.

Last week, 26 nations issued a statement declaring they would oppose the EU’s “unacceptable” plans, prompting speculation that further lawsuits may be forthcoming.

The signatories would prefer a global solution agreed through UN body the International Civil Aviation Authority (ICAO), which in more than a decade of negotiations has secured only non-binding targets to improve fuel efficiency and cut net emissions to half 2005 levels by 2050.

A global deal is also the preferred solution of Brussels and green groups, but there is scepticism that the ICAO is capable of getting to grips with an industry whose emissions currently account for about two per cent of the world total but are expected to quadruple by 2050 if no steps are taken.

“In the absence of ICAO action, the EU directive is a necessary and lawful action to control emissions associated with this type of growth,” said Sarah Burt, a staff attorney at non-profit environmental law firm Earthjustice.

Should tomorrow’s decision go against the EU, Brussels mandarins may be forced to amend any disputed regulations to bring them into line with the ruling – a lengthy and expensive process.

However, European environment commissioner Janez Potočnik yesterday reiterated the EU’s determination to bring aviation into EU ETS.

“It is a law,” he told reporters. “There are ways on how the aviation sector should participate and how they should do their job in the fight against climate change.”

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