US airline EU ETS case against the UK to be referred to European court as NGO coalition joins action
High Court, London
Fri 28 May 2010 – A judicial review held yesterday at the High Court in London agreed an application by the Air Transport Association of America (ATA) to challenge the legal validity of its airline members be included unilaterally in the EU Emissions Trading Scheme (EU ETS). The action was brought against the UK’s Secretary of State for Energy and Climate Change and both sides’ request for the case be referred to the European Court of Justice (ECJ) in Luxembourg was granted. The court also granted permission for a transatlantic coalition of environmental groups to join the action. Similar applications by the International Air Transport Association (IATA) and the National Airlines Council of Canada (NACC) to intervene were also granted although as a combined brief.
ATA has brought the case on behalf of its members along with three major US airlines – American, Continental and United. Under the EU ETS, the three airlines are being administered by the UK, hence the reason for the case to be heard initially in the High Court. The ATA argues that the inclusion of non-EU carriers in the EU ETS violates international civil aviation legal principles set out in the Chicago Convention, a claim firmly refuted by the Department of Energy and Climate Change (DECC). Both DECC and the ATA believe the EU directive on the Aviation EU ETS should be dealt with at an EU level, although the case is unlikely to be heard until next year.
“The High Court decision to refer this case to the European Court of Justice is an important step, as only the ECJ has the authority to rule on the Europe-wide directive that applies the European ETS to our airlines,” said ATA Vice President, Environmental Affairs, Nancy Young. “The unilateral extension of the EU ETS to international aviation is contrary to international law both as an extraterritorial action and an improper tax or charge. It also clearly stands in the way of an appropriate and effective global solution.”
ATA supports an aviation industry-wide initiative in which international aviation greenhouse gas emissions are dealt with in a global agreement under the control of the International Civil Aviation Organization (ICAO) – which administers the provisions of the Chicago Convention, rather than national or regional market-based schemes like the EU ETS.
Tim Johnson, Director of the Aviation Environment Federation (AEF), one of the environmental NGOs involved in the coalition joining the case, responded: “While ATA may describe the EU ETS as a proxy charge or tax, ICAO regards trading, taxes and charges as distinct measures – ICAO statements regarding levies have little relevance to emissions trading. As for the claim that it has impeded a global agreement, it’s done more to drive the need to find a global solution than anything else. The willingness to act wasn’t there before the EU launched its ETS proposal.”
The NGOs making up the transatlantic coalition include three US-based organizations – the Environmental Defense Fund (EDF), Earthjustice and the Center for Biological Diversity – as well as AEF, WWF-UK and Brussels-based Transport & Environment.
Johnson said global negotiations within ICAO to limit aviation emissions had made little progress since 1997 and the EU had been right to act. “By seeking to avoid Europe’s ETS with no credible alternative, the airlines are showing they are not serious about tackling climate change.”
Sarah Burt of California-based Earthjustice commented: “The US carriers say they want to achieve a global system for controlling emissions from aviation, but rather than building on the European approach, they are trying to destroy what progress has already been made. They are out of step with developments in the US, where lawmakers have seen no reason to give aviation a pass when designing climate legislation.”
Burt is referring to the Kerry-Lieberman climate bill, the American Power Act, which is currently before the US Senate (see story), in which air carriers would pay a carbon surcharge on top of the fuel they purchase from 2013. For international aviation, the legislation proposes that a global framework agreed through ICAO would be the preferred option but until then, the US should “work with foreign governments towards a global agreement that reconciles foreign carbon emission reduction programmes to minimize duplicative measures and avoids unnecessary complication for the aviation industry, while still achieving measurable, reportable and verifiable environmental objectives.”
In the event the legislation should be passed – which is still far from certain, then this suggests the US and the EU would likely come to an agreement on how carriers would be accommodated under their respective emissions reduction regimes. The EU has tailored the Aviation EU ETS directive to allow for this eventuality, and will be keen to avoid a potential conflict with the US so near to the start date of the scheme in little over 18 month’s time.
EDF’s Annie Petsonk said: “The draft Kerry-Lieberman bill is a sensible approach to regulating international aviation emissions – it recognizes that a global deal is the best solution, but doesn’t believe aviation should be let off the hook until that can be achieved.”
Jeff Gazzard of GreenSkiesAlliance welcomed the coalition’s action, commenting: “The airlines’ legal case is wholly misconceived. They have quoted selectively and misleadingly from the laws they claim have been infringed. The EU ETS is a vitally important measure that will cap emissions from aviation over time – something the industry’s own mishmash of half-baked proposals can never achieve.”
IATA filed its application to intervene in the US airline case back in March (see story), saying at the time that it also considered the inclusion of non-EU airlines into the EU ETS as a contravention of the Chicago Convention.
Commenting on the NACC’s reasons for joining the action, its President, George Petsikas told GreenAir Online: “Reducing aviation greenhouse gas emissions is a global challenge that requires a global solution. As a purely regional initiative, the EU ETS seeks to unilaterally apply and enforce its rules on airlines and their customers around the world in contravention of applicable international law.”