EU airline carbon tax (Emissions Trading System) backed by European Court

European Union Emissions Trading System  (EU ETS).   EU plans to levy an emissions tax on airlines are valid, according to the European Court of Justice. The decision means all airlines flying to and from the 27 states of the EU will face a tax on emissions from 1 January. US, Canadian and other carriers argue the charges violate climate change and aviation pacts but the ECJ ruled that the ETS does not infringe the principles of customary international law at issue or the Open Skies Agreement. Airlines can choose whether to fly to EU countries, or not. The US House of Representatives passed a measure two months ago directing the US transport secretary to prohibit US carriers from participating in the scheme if it were to come into force.


21.12.2011 (BBC)

EU plans to levy an emissions tax on airlines are valid, according to the European Court of Justice (ECJ).

The decision means all airlines flying to and from the 27 states of the European Union will face a tax on emissions from 1 January.

US, Canadian and other carriers argue the charges violate climate change and aviation pacts.

Four Chinese airlines have also opposed the scheme which they say could cost them 95m euros ($124m, £79m).

American carriers argue that the taxes contravene the Open Skies Agreement, which allows airlines to fly between any EU country and any point in the US.

The US House of Representatives passed a measure two months ago directing the US transport secretary to prohibit US carriers from participating in the scheme if it were to come into force.

On Friday, the US Secretary of State Hillary Clinton said America would respond with “appropriate action” if the scheme went ahead, although she did not elaborate on any specific measures.

No delay

Airlines will now be subject to the Emissions Trading System (ETS), used to charge industries such as oil refineries, power stations and steel works for CO2 emissions, as part of Europe’s efforts to combat climate change.

“Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the Open Skies Agreement” across the Atlantic, the court decided.

“It is only if the operators of such aircraft choose to operate a commercial air route arriving at or departing from an airport situated in the EU that they are subject to the emissions trading scheme,” it added.

As a result of this choice, the EU system “infringes neither the principle of territoriality nor the sovereignty of third states, since the scheme is applicable to the operators only when their aircraft are physically in the territory of one of the member states of the EU”.

The EU has made it clear that it will not bow to US pressure following Wednesday’s decision.

“We will neither abandon nor delay [the Emissions Trading System]. The measure will fully enter force on 1 January 2012,” said the spokesman for EU climate change commissioner, Connie Hedegaard.


The Emissions Trading System used to be called the Emissions Trading Scheme.

see earlier: EU airline emissions cap ‘legal’   6.10.2011 (BBC)


A victory for climate legislation and upholding aviation within ETS.  Maybe now there will be more pressure on ICAO to deliver a global agreement to address aviation emissions.

Also a long article on GreenAir online  21.12.2011

ECJ ruling in favour of EU’s right to include non-EU airlines in its ETS unlikely to stem US political pressure



Sandbag  says:

Form January 2012 all airlines will be required to surrender emissions permits equivalent to the emission produced during the flight. Based on a historical average, airlines will initially receive 85% of their emissions permits for free. The additional cost to customers depends on the degree to which the value of the free allowances are passed onto the passenger. The EU estimates that “the actual costs per ticket of a transatlantic flight would increase by less than 2 Euro, assuming that the value of the free allowances would not be passed to the passenger. If it were to be passed through, the ticked price could increase by around 12 Euro.”

The inclusion of aviation emissions in the EU ETS is a seen as a victory against an industry which has, to date, avoided additional climate legislation. The aviation industry is notable for the fact that aviation fuel remains exempt from tax.

Aviation emissions continue to grow, the EU’s aviation emissions alone have almost doubled since 1990.

see also

EU Court Upholds Bringing Airlines Into ETS

Reuters, 21.12.2011

By Michele Sinner and Barbara Lewis/Reuters

Europe’s highest court gave unreserved backing on Wednesday to a hotly contested EU law charging airlines for carbon emissions on flights to and from Europe, a decision likely to escalate tensions with the United States and other trading partners.

All airlines flying to and from EU airports will have to buy permits under the European Union’s emissions trading scheme from Jan. 1, the European Court of Justice (ECJ) ruled.

“The directive including aviation activities in the EU’s emissions trading scheme is valid,” the court said in a statement.

“Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the open-skies agreement.”

Wednesday’s ruling was in line with expectations after a senior adviser to the court issued a preliminary opinion in October finding the EU legislation did not infringe the sovereignty of other states and was compatible with international agreements.

The case was initially brought to the London High Court of Justice by the Air Transport Association of America, now called Airlines for Amerrica, American Airlines and United Continental, but the London court referred it to the ECJ in Luxembourg.

Critics of the EU rules have argued that under the 1997 Kyoto climate pact, countries agreed to address emissions from aviation jointly through the U.N.’s aviation body, the International Civil Aviation Organization (ICAO).

More than a decade on, talks in that forum have not yielded significant progress and the ECJ said the EU was within its rights to take unilateral action.

The EU already sets a cap on the level of emissions allowed from factories and power plants. Emitters exceeding their quotas must buy carbon permits, while those within their limits can sell any unused allowances.

While emissions from most other sectors have been falling, those from airlines have doubled since 1990 and could triple by 2020, Commission figures show.

The EU carbon market pared losses immediately after the ruling, but stayed negative.

IATA response, not surprisingly unhappy as there will need to be some payment for carbon emissions, and they can no longer hide behind vague statements of intent on some global deal, which at best, would be weak and years away:


IATA Disappointed with EU Court Decision on ETS

Geneva – The International Air Transport Association (IATA) expressed disappointment at today’s decision by the Court of Justice of the European Union (CJEU) which upheld European Union (EU) plans to include international aviation in the EU emissions trading scheme (ETS) from 2012. The CJEU decision represents a European legal interpretation of EU ETS; however, the success of Europe’s plans will depend on how non-European states view its legal and political acceptability. In this respect, there is growing global opposition.

“Today’s decision is a disappointment but not a surprise. It does not bring us any closer to a much-needed global approach to economic measures to account for aviation’s international emissions. Unilateral, extra-territorial and market distorting initiatives such as the EU ETS are not the way forward. What is needed is a global approach agreed through the International Civil Aviation Organization (ICAO),” said Tony Tyler, IATA’s Director General and CEO.

The CJEU decision was in response to a legal challenge presented by the Air Transport Association of America (now Airlines for America), a number of US airlines, IATA and the National Airlines Council for Canada. Together they argued that the EU ETS contravened the Chicago Convention which prohibits such taxation of international aviation. The CJEU ruled that the Chicago Convention does not bind the EU which is not a signatory and that the ETS does not violate any other aspect of international law.

“The CJEU decision may reflect European confidence in European plans. But that confidence is by no means shared by the outside world where opposition is growing. A formal resolution of the ICAO Council supported by 26 countries urged Europe to take a different approach. India is reported to have instructed its airlines not to comply. Similar legislation is moving through the US Congress. Other legal challenges are expected. And on 16 December the US Secretaries of State and Transportation warned that the US would be compelled to take appropriate action if Europe does not re-think its plans,” said Tyler. The US letter noted that at least 43 countries have publicly objected to Europe’s plans.

The air transport industry has made global commitments to improve fuel efficiency by 1.5% annually to 2020, to cap net emissions from 2020 and to cut net emissions in half by 2050 (compared to 2005 levels). “A global framework for economic measures is a critical component of our strategy to achieve these challenging targets.

But we won’t get agreement on a global approach if states are throwing rocks at each other because Europe wants to act extra-territorially.  Europe should take credit for raising the issue of aviation and climate change on the global agenda. But what is needed now is for Europe to work with the rest of the world through ICAO to achieve a global solution.  Today’s decision has not changed that reality,” said Tyler.

At its 37th Assembly in 2010, 15 principles were agreed through ICAO for a global framework on economic measures. A commitment to develop a framework based on these measures for agreement at the 38th ICAO Assembly in 2013 was also achieved. 


see also


Date added: December 21, 2011

A transatlantic coalition of environmental groups today applauded the decision of Europe’s highest court to uphold the EU law to reduce carbon pollution from airplanes. The decision, from the Court of Justice of the European Union, affirms that the EU law is fully compliant with international law. This is their final ruling. The EU Aviation Directive, the world’s only mandatory program to address emissions from aviation, will take effect in January 2012. The Court’s decision makes clear that existing law bars precisely the discriminatory treatment of airlines that the United States and others are calling for.

Click here to view full story…


Recent stories on the battle against inclusion of aviation in the EU ETS

There have been months of campaigning by various countries against the inclusion of aviation into the EU ETS, and against it compulsorily including airlines from other countries which fly to or from Europe. Some of these stories are below:

Reports that Indian airlines may not submit their carbon data for ETS

Date added: December 19, 2011

Climate sceptic groups are promoting a story about India asking its national carriers not to submit data on their fuel consumption to the EU ETS. The data is needed for working out how much an airline needs to pay to the ETS. The source says India has led the opposition to the move with support from more than two dozen countries including the US and China.

Click here to view full story…

US demands data from European and US airlines as it fires off first retaliatory salvo in growing dispute with EU over ETS

Date added: December 19, 2011

On 21st December. the European Court of Justice will rule on the case brought by major US airlines against their inclusion in the EU ETS. Now the US Department of Transportation (DOT) has issued an order against 9 European carriers (Aer Lingus, Air France, Alitalia, British Airways, Deutsche Lufthansa, Iberia, KLM, SAS and Virgin Atlantic) requiring them to submit traffic and carbon allowance data to it by specified dates. An order has also been served on 7 US airlines requesting similar data and additional financial information on allowance costs and income.

Click here to view full story…



US DOT official warns of damaging trade war between US and EU over EU ETS

Date added: December 7, 2011

The US Department of Transportation continues to push for American and other airlines to be excluded from the EU’s Emissions Trading Scheme, which aviation joins on 1st January. They are trying to make out that this scheme is holding ICAO back and delaying their action (ICAO has never been remotely pro-active on this). The European Court of Justice will announce their decision on the case against the ETS on 21st December. Realistically the airlines realise that at this late date, the scheme cannot and will not be altered, though they hope for change before early 2013.

Click here to view full story…



UN report shows role for EU ETS in helping to control rising emissions from aviation

Date added: November 26, 2011

A new report from UNEP looks at the gap between the emissions cuts needed to avoid a 2 degrees C rise in temperature by 2020, and the pledges made. It finds that global aviation (excluding military) produced around 0.63 GtCO2 in 2005 and could rise to 1.16 GtCO2e in 2020. Aviation and shipping together could be 4 – 5.7% of global emissions by 2020 and 10 to 32 % of the total emissions humanity could be producing in 2050, while staying below 2 degrees. Schemes like the EU ETS are very helpful in charging for carbon and cutting its emission.   Click here to view full story…


Row over whether foreign airlines and ETS rumbles on and ICAO is incapable of producing an effective carbon scheme

Date added: November 13, 2011

This month the US joined forces with over 12 other countries, including China, India, Russia and Japan, to take the fight against the ETS to the ICAO, the UN agency that sets airline standards. Brussels is standing firm. Jeff Gazzard argues that as ICAO is run exclusively for the aviation industry, it is institutionally incapable of imposing any global system of taxes or charges to reduce aviation’s CO2 emissions. Everyone knows ICAO cannot, and will not, do it.    Click here to view full story…


Date added: November 10, 2011

IATA says Europe could gain commitments from global airlines to end the dispute over ETS. He said othewise airlines and governments would continue to fight the EU. He wants some sort of commitments to be obtained by ICAO, rather than having to comply with the ETS and suggested: “Surely a deal could be done.” Airlines are complaining that the cost will eat into their profits and whine that they would delay investment in environmentally friendly technology.   Click here to view full story…

Australia Senate backs carbon tax – airlines can opt in to emissions-trading

Date added: November 9, 2011

The country’s mining firms, airlines, steel makers and energy firms are among those expected to be hardest hit by the new tax. The Clean Energy Act includes an amendment allowing airlines and other large fuel users to opt in to a carbon-emissions trading program, and airlines argued that being part of the scheme would allow them to manage their fuel liability and carbon-cost liability for their fuel more efficiently. Airlines prefer this to a higher fuel tax.    Click here to view full story…

ACI Backs IATA In Fight Against EU Emissions Trading

Date added: November 6, 2011

ICAO endorsed a paper by 26 states asking the EU to exclude non-EU states from the ETS. The Airports Council International says the issues of aircraft emissions should be addressed globally by ICAO and is “very concerned over the trade conflict” developing over the EU’s plan to charge all airlines flying into and out of European airports. IATA called for ICAO to develop a global ETS and appreciates the ACI support. The EU shows no signs of backing down.   Click here to view full story…


EU faces growing row over jet carbon plan

Date added: November 4, 2011

Pressure mounted on the European Union on Wednesday to back down over charges for jetliner pollution as a United Nations body was urged to weigh in and help prevent a carbon trade war. The aviation industry called for urgent action to prevent disruption to trade and tourism links as a result of EU plans to make airlines join a cap-and-trade scheme to curb emissions, which has sparked tit-for-tat legislation in the U.S. Congress.   Click here to view full story…


 Articles from the Aviation Environment Federation (AEF)


21.12.2011  Environmental groups hail historic court decision upholding European law to curb airplane pollution, address climate change »


25.11.2011  UN report shows role for EU ETS in helping to control rising emissions from aviation »


24.11.2011  Europe must resist attacks on EU ETS »


18.11.2011  UK airlines seek to evade taxation »


3.11.2011  EU ETS to increase ticket prices by just $2 for a transatlantic flight, says EC »


6.10.2011 European Court’s preliminary opinion supports legality of EU law that curbs aviation pollution »


14.7.2011  AEF forms part of NGO coalition at the European Court of Justice, plus work on a range of UK policy issues »


5.7.2011  Environmental organisations urge EU to resist pressure from US aviation industry over carbon emissions »