IATA enters legal case brought by ATA and 3 US airlines against the UK over the Aviation EU ETS

2.3.2010   (GreenA ir online)

Mon 1 Mar 2010 – The International Air Transport Association (IATA) has filed an “amicus brief”
in London ahead of the hearing expected this month into the case brought by the
Air Transport Association of America (ATA) and three major US airlines – American,
Continental and United – over the aviation EU Emissions Trading Scheme (EU ETS).
An amicus brief is a document which is filed by someone, such as an advocacy group, who is not
directly related to the case under consideration but is intended to be useful
for evaluation by the judge.   IATA says it wishes to express to the court its
own deep concerns of the scheme. Meanwhile, the UK Government’s consultation over transposing the second and final
phase of the EU directive into law ends this coming Friday, March 5. (see link
The four US applicants filed an application in the UK Administrative Court in
December for judicial review of the Department of Energy and Climate Change (DECC)
concerning the Aviation Greenhouse Gas Emissions Trading Scheme Regulations 2009.  
 Under the EU ETS, the UK is the administering state for the three airlines. They claim that unilaterally applying the EU ETS to non-EU airlines is in breach
of the Convention on International Civil Aviation 1944 – the Chicago Convention.
The applicants have asked for the case to be referred to the European Court of Justice (ECJ), which DECC does not oppose.   However, the decision rests with the High Court in London, which would need to issue an Order for Reference.   The proceeding also will confirm the specific questions to be put to the ECJ.    
As a ‘friend of the court’, IATA will hope to present its opinions during the
The ECJ, based in Luxembourg, is the highest court in the European Union on matters
of EU law. Assuming the case is passed to the ECJ, it is not expected to be heard before next year.
A spokesman for IATA told GreenAir Online: "The EU ETS is an issue of concern for the global industry. We are not against
the concept of economic measures – they are a part of our four-pillar strategy.
But we are deeply concerned by Europe’s regional approach which will distort competition and lead to carbon leakage.
"Additionally, there is the fact that it does contravene the Chicago Convention.
The brief will be an opportunity to make these concerns known to the court from
the global perspective of IATA."
IATA Director General Giovanni Bisignani has previously declared the EU ETS illegal
and warned in December that states outside the EU would take legal action over
their airlines’ inclusion in the scheme.
A report in the Wall Street Journal last week said that talks between the EU
and the US on their Open Skies agreement had hit difficulties over competition
and environmental concerns, including the EU ETS.
However, US Open Skies negotiator John Byerly told GreenAir Online: "Although we did not resolve at the Madrid round all of the issues involved
in the negotiation of a second-stage air transport agreement, we made good progress
on a number of fronts, including in reaching tentative accord on language for
a revised article on the environment. I do not expect emissions-related issues
to be a hurdle to reaching a final agreement."
Meanwhile, DECC and the Department for Transport (DfT) held an Aviation EU ETS
seminar in London on February 19 ahead of the closing date on its consultation
in respect of the second-stage transposition of the EU directive into UK law.  
This principally deals with administration charges to be paid by aircraft operators
allocated to the UK under the EU ETS and fines and penalties for non-compliance
with the regulations.
One major non-EU airline attending the seminar called it "a waste of time".
"DECC and the Department of Transport have little interest in consulting in a
democratic way with stakeholders," he said.  "Despite many strong objections to
the way in which the UK plans to interpret the EU directive, they are not that
interested in making any changes. The consultation, in my view, is therefore a
waste of time.  

"A particular point is the plan to charge airlines for the administration of
the scheme.  Rather than use the money generated from [the auctioning of] allowances
– which is planned to be funnelled directly into general government revenues –
the UK is asking each airline emitting over 500,000 tonnes of CO2 to pay an annual
£4,000 ($6,000) administration charge. It’s very frustrating."

The administration charge is also a bone of contention with small operators,
which feel seriously disadvantaged, commented David Carlisle, Managing Director
of consultancy ETS Aviation.
"The costs keep rising," he said. "There is a danger that, for all their climate
change intentions, the latest rules could further hinder recovery in a business
sector traumatised by the recent financial crisis. Maybe large airlines can adapt
existing departments to limit the investment required – small airlines and micro
operators have far less capacity."
On the other hand, the UK’s administering Competent Authority, the Environment
Agency, has received praise from some quarters over the speedy processing of submitted
monitoring plans and its responsiveness to queries from operators.
Following the London seminar, DECC/DfT has just posted a YouTube message that picks out the key topics from the current consultation and provides an
update of progress to date. Presentations from the seminar will shortly be posted
on the DECC website.   [ The deadline for response is  5 March 2010  and the consultation documents can be found at:
http://www.decc.gov.uk/en/content/cms/consultations/euets_aviation/euets_aviation.aspx     ]
Meanwhile, the European Commission has published a revised list of operators
and their respective administering State.   A number of operators who are now considered
to have fallen outside the scope of the EU ETS – for example, their flights fell
below the de minimis threshold or were state flights – have been removed, with
some operators having been moved to another State.
"This is really unexpected," commented Julien Dufour, Managing Director of Paris-based
VerifAvia. "Some operators that submitted monitoring plans must do it again to
another competent authority. They are adding burden to the burden."
An EC official said the list would never be fully precise and  non-presence on
the list does not prevent Member States from regulating operators.
IATA – Preparing for Emissions Trading in Europe
What is an amicus brief?
DECC – Aviation EU ETS
European Commission – Aviation EU ETS (revised list of operators)
ETS Aviation