European Court of Justice rules that EU ETS is legal and does not infringe sovereignty

The European Court of Justice has ruled that the EU ETS is compatible with international law. The ETS does not infringe the sovereignty of other States and is compatible with the relevant international agreements. The ATA, some US airlines, supported by IATA and many others brought a case before a UK court, which had in turn asked the EU court whether this extension of the ETS is valid in light of a number of
international agreements.The opinion is not binding.



EU Court: Airline Carbon Law Is Legal

6.10.2011  (Wall Street Journal)


BRUSSELS.   A European Union law that forces airlines from all over the world
to hold permits to emit greenhouse gases in order to fly in and out of the EU
is compatible with international law, the European Court of Justice said in an
opinion Thursday.

“EU legislation doesn’t infringe the sovereignty of other States or the freedom
of the high seas guaranteed under international law, and is compatible with the
relevant international agreements,” said the opinion prepared by Advocate General
Juliane Kokott, a legal adviser for the ECJ.

The Air Transport Association of America and the U.S. airlines American Airlines,
Continental and United Airlines, supported by the International Air Transport
Association and the National Airlines Council of Canada, have brought a case before
a U.K. court, which has in turn asked the EU court whether this extension of the
emissions trading scheme is valid in light of a number of international agreements.

China, Russia and other major nations, as well as airlines worldwide, have criticized
the project.  Non-EU governments and airlines argue that the EU has no right to
regulate emissions outside its borders, and hasn’t set an objective standard for
equivalent measures.

The law “doesn’t contain any extraterritorial provision, nor does it infringe
the sovereign rights of third countries,” the opinion said.

Legal opinions are routinely prepared in ECJ cases by senior court advisors known
as Advocates General. The Advocate General’s proposed ruling isn’t binding on
the court, but is followed in the final ruling in the majority of cases.
see also


Initial ECJ opinion on EU ETS legal challenge expected soon


28.9.2011 (Flight Global)

The European Court of Justice’s senior legal advisor is poised to put forward
an opinion on the challenge against the inclusion of aviation in the EU’s emissions
trading system (ETS), brought forward by the Air Transport Association of America
(ATA) and three of its members.

During a recent technical briefing to detail the amount of free allowances aircraft
operators will be entitled to when ETS takes effect on 1 January 2012, Jos Delbeke,
the European Commission’s director general for climate action, said the court’s
advocate general would issue a view on the challenge on 6 October.

This will be an “important moment”, said Delbeke, because the opinion expressed
will give “a strong indication of how the court will rule”.

Non-compliance with ETS will result in a penalty of €100 ($135) per tonne of
carbon dioxide emitted, warned Delbeke. The US House of Representatives’ transportation
and infrastructure committee recently approved a bill that would prevent US carriers
from taking part in ETS, and strong opposition to the scheme has also been voiced
by China and Russia.

Delbeke said the European Commission is “still having intensive discussions”
with various countries about ETS, and is “very open to taking those discussions

The Commission announced on 26 September that aircraft operators will receive
85% of their emissions allowances free of charge in the first year of ETS, before
dropping to 82% in the period from 1 January 2013 to 31 December 2020.

In the first year, airlines will have to purchase the remaining 15% of their
allowances through an auctioning process. However, the Commission has set aside
3% of remaining allowances in the 2013-2020 period as a “special reserve”, which
will be available to new entrants and fast-growing airlines.

“At current market prices, these free allowances represent more than €20 billion
($27 billion) over the decade,” said EU climate action commissioner Connie Hedegaard.
“With these potential revenues, airlines could invest in modernising their fleets,
improving fuel efficiency and using non-fossil aviation fuel.”

However, this suggestion has been slammed by the IATA, which is calling for EU
ETS to be scrapped. “If that were the reality, we wouldn’t be complaining. But
it’s not,” said IATA director general Tony Tyler. “The well-known fact is that
airlines will be net purchasers of carbon emissions permits for the foreseeable
future. The starting cost is $1.2 billion in 2012. To put that into perspective,
the industry’s projected 2012 profit is $4.9 billion.”


see also older news


Non EU countries and airlines continue to warn of retaliatory action against

Date Added: 4th October 2011

IATA says there is a risk that countries outside the EU could take retaliatory
action against the EU’s ETS. On 6th October an advocate general to the European
Court of Justice will issue an opinion on a request by US airlines for non-European
carriers to be excluded from the ETS. This should give a steer on the subsequent
ruling by the ECJ, which the EC is confident will side with the EU rather than
the US airlines. They want a scheme run through ICAO.Click here to view full story…

Cost for airlines of joining EU ETS €1.1bn in 2012, says Thomson Reuters Point

Date Added: 21st September 2011

The cost for airlines of joining the EU ETS in 2012 will be approximately €1.1
billion using a carbon price of €12/ tonne, or a total of €10.4 billion between
now and the end of 2020, according to Thomson Reuters Point Carbon and RDC Aviation.
The EC is expected to issue 176 million allowances to airlines for free for 2012,
and airlines are forecast to need to buy 88 million more. The 27 flag-carriers
in the EU will get, on average, 61% free. Those with substantial long-haul networks
fare better; Air France/KLM, BA, Lufthansa and Iberia on average will be allocated
81%.Click here to view full story…

Airlines inclusion in the EU ETS from January – FT article

Date Added: 12th September 2011

From 1st Jan 2012 airlines will have to account for the emissions produced on
flights to and from EU airports. In the first year of the scheme, airlines will
be given allowances matching 82% of their historic emissions, with 15% auctioned
and the remaining 3% held in a special reserve for new entrants. Interesting FT
article about the process, how little it will cost some airlines, and on the various
protest of airlines about inclusion in the ETS.Click here to view full story…

Environmental NGOs make a case for the EU ETS as US airlines finally near their
day in court over inclusion

Date Added: 2nd July 2011

Ahead of the hearing by the European Court of Justice (ECJ) over the inclusion
of US airlines into the EU ETS, environmental groups from the US and Europe have
repeated their support for the scheme on both legal and climate change grounds. Tim
Johnson of the AEF believed the scheme was “affordable for consumers, environmentally
effective and, above all, fair to industry.” The main question from the ECJ is
if the EU directive should apply to those parts of flights that take place outside
the EU.

Click here to view full story…