US airlines drop case against EU carbon laws

US airlines have dropped a lawsuit against an EU law that charges carriers for emitting CO2 during flights in and out of Europe, although green campaigners have warned the fight to uphold the regulations may be far from over.

Trade body Airlines for America (A4A) announced yesterday it had ended almost two years of legal wrangling, in which the organisation, along with United/Continental and American airlines, alleged forcing carriers to buy carbon permits in the EU emissions trading scheme (EU ETS) contravened international aviation treaties.

The case was rejected by the European Court of Justice (ECJ) in December, just days before the scheme’s January start date, but new claims were due to be heard at the High Court in London today.

A4A insisted it remained steadfastly against the regulations, claiming only the International Civil Aviation Organisation (ICAO) has the authority to impose such a scheme. In a statement, it called on the Obama administration to continue to push its opposition to the EU.

“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 government’s unified opposition to the scheme,” said A4A president and chief executive Nicholas Calio.

“There is a clear path for the United States to force the EU to halt the scheme and protect US sovereignty, American consumers, jobs and international law.”

A4A’s decision to drop the “ill-conceived” challenge was welcomed by a coalition of green groups including WWF-UK, Environmental Defense Fund and Transport & Environment, who said A4A had probably realised their efforts would be “fruitless” given the ECJ decision.

However, in a joint statement they labelled the body’s failure to accept that ruling as disappointing, warning it “may simply be moving the battlefield elsewhere”.

Jean Leston, senior transport policy adviser at WWF-UK, told BusinessGreen this could include a new legal case in a US court or bringing a challenge under the Article 84 dispute procedure of the ICAO – a course of action Raymond Benjamin, secretary general of the UN body, has said would delay agreement of a global emissions-cutting solution.

“A4A talk a good line about wanting to see aviation emissions come under a global scheme,” Leston said, “but we think they’re going to do the very thing that would disrupt progress.”

The idea of going through ICAO was also given short shrift by EU climate commissioner Connie Hedegaard, who urged airlines to engage constructively in agreeing a global solution, rather than continue to fight the EU.

“It is remarkable that the airlines give up their own case and now ask somebody else to fight it,” she said in an emailed statement. “We believe that ICAO should now be forward looking in finding a positive solution.”

Tim Johnson, director of the Aviation Environment Federation (AEF), told BusinessGreen he was confident ICAO could come up with a global solution by next year, assuming the dispute procedure did not go ahead, although whether this would then prove politically viable was another matter.

However, in over a decade of talks ICAO has come up with little more than non-binding emissions and fuel efficiency goals. It was this lack of action Brussels says forced it to bring in the new rules, which it estimates will save 183 million tonnes of CO2 per year by 2020, cost airlines just €360m in the first year and add only around €3 to transatlantic tickets.

But opposition remains strong. A bill currently going through the Senate would prevent US airlines complying with EU ETS, China and India have also banned their carriers from complying, while 23 countries, including these two and the US, have agreed a package of countermeasures to use against the scheme.

This leaves an industry already beset by falling passenger numbers and spiralling oil prices caught in the middle of a potential trade war.

European manufacturer Airbus claimed China had frozen an order for 10 planes because of the legislation, although Beijing denied this.

Other carriers are concerned the dispute will force ticket prices up and lead to many more business travellers using alternatives such as rail or videoconferencing.

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