Gets legal green signal from top law officer, despite non-EU countries’ combined protest.
For the international aviation industry, the skies just grew stormier. The advocate-general of the European Court of Justice (ECJ), an advisor to the European Union’s highest court, has said it is legal for the latter to include non-European airlines in its new carbon emissions trading scheme (ETS).
India has been leading the criticism from the international aviation industry on the move, which is pitting airlines against the EU in what some analysts fear may spark the next big trade war. New Delhi held a meeting at the end of September, bringing together 26 non-EU members of the International Civil Aviation Organisation (ICAO), a UN aviation body, including the US, China, Russia, and South Africa. At the end of the meeting, delegates adopted a joint declaration, stating the EU’s plan to include aviation in the ETS was “discriminatory” and a violation of international law.
However, advocate-general Juliane Kokott said today the “EU legislation does not 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”.
The ECJ’s final decision on the matter is expected early next year. However, this ruling makes it likely that Brussels would continue to stick to its guns. The case in the context of which the opinion was made was brought against the EU by the Air Transport Association of America, American Airlines and United Continental. While the opinion of the AG is not binding, the ECJ tends to follow the advice given in the vast majority of cases.
The EU’s decision to include aviation in the ETS from January 1 was sparked by the failure of negotiations to create a global cap and trade scheme for aviation, discussed without result for over a decade within the ICAO. Brussels says aviation contributes almost four per cent of man-made carbon emissions, with a rapidly increasing share. Hence, it has unilaterally decided to include airlines in addition to factories, power plants and other installations in its regional carbon trading scheme.
The ETS sets a cap on the level of emissions allowed from the industries in its ambit. From next January, airlines that emit carbon above their cap have to buy permits to cover these emissions. If they emit less than their limit, they can sell spare permits from their emission allowances.
The problem is that the scheme will apply not only to European airlines but all airlines that fly in or out of an EU airport. Brussels has given some respite by announcing that airlines would initially only be required to pay for 15 per cent of the carbon they emit, to be increased to 18 per cent from 2013-2020. The remaining allowances would be allocated for free.
Depending on decisions by airlines on how much of the cost they pass on to their customers, the European Commission has calculated that would result in an extra cost per passenger of ¤2-12.
However, airlines and non-EU governments are not placated. At last week’s meeting in New Delhi, the government of India’s civil aviation secretary, S N A Zaidi, alleged the EU’s scheme was “illegal” because it seeks to charge airlines for the lag of journey outside its airspace, which constituted an ‘extra-territorial’ principle.
Today’s developments at the ECJ address this argument. The AG said that applying the ETS to non-EU airlines did not break international law because it only applied to flights arriving into or leaving EU airports. “The directive does not contain any extra-territorial provision, nor does it infringe the sovereign rights of third countries,” she said.
In the event of the EU going ahead with its plans, some analysts say a ‘tit for tat’ retaliation could ensue.
An example was when China blocked a $3.8-billion purchase from Airbus at the Paris air show this year, reportedly over anger at the aviation scheme.
Source : Business Standard
For the international aviation industry, the skies just grew stormier. The advocate-general of the European Court of Justice (ECJ), an advisor to the European Union’s highest court, has said it is legal for the latter to include non-European airlines in its new carbon emissions trading scheme (ETS).
India has been leading the criticism from the international aviation industry on the move, which is pitting airlines against the EU in what some analysts fear may spark the next big trade war. New Delhi held a meeting at the end of September, bringing together 26 non-EU members of the International Civil Aviation Organisation (ICAO), a UN aviation body, including the US, China, Russia, and South Africa. At the end of the meeting, delegates adopted a joint declaration, stating the EU’s plan to include aviation in the ETS was “discriminatory” and a violation of international law.
However, advocate-general Juliane Kokott said today the “EU legislation does not 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”.
The ECJ’s final decision on the matter is expected early next year. However, this ruling makes it likely that Brussels would continue to stick to its guns. The case in the context of which the opinion was made was brought against the EU by the Air Transport Association of America, American Airlines and United Continental. While the opinion of the AG is not binding, the ECJ tends to follow the advice given in the vast majority of cases.
The EU’s decision to include aviation in the ETS from January 1 was sparked by the failure of negotiations to create a global cap and trade scheme for aviation, discussed without result for over a decade within the ICAO. Brussels says aviation contributes almost four per cent of man-made carbon emissions, with a rapidly increasing share. Hence, it has unilaterally decided to include airlines in addition to factories, power plants and other installations in its regional carbon trading scheme.
The ETS sets a cap on the level of emissions allowed from the industries in its ambit. From next January, airlines that emit carbon above their cap have to buy permits to cover these emissions. If they emit less than their limit, they can sell spare permits from their emission allowances.
The problem is that the scheme will apply not only to European airlines but all airlines that fly in or out of an EU airport. Brussels has given some respite by announcing that airlines would initially only be required to pay for 15 per cent of the carbon they emit, to be increased to 18 per cent from 2013-2020. The remaining allowances would be allocated for free.
Depending on decisions by airlines on how much of the cost they pass on to their customers, the European Commission has calculated that would result in an extra cost per passenger of ¤2-12.
However, airlines and non-EU governments are not placated. At last week’s meeting in New Delhi, the government of India’s civil aviation secretary, S N A Zaidi, alleged the EU’s scheme was “illegal” because it seeks to charge airlines for the lag of journey outside its airspace, which constituted an ‘extra-territorial’ principle.
Today’s developments at the ECJ address this argument. The AG said that applying the ETS to non-EU airlines did not break international law because it only applied to flights arriving into or leaving EU airports. “The directive does not contain any extra-territorial provision, nor does it infringe the sovereign rights of third countries,” she said.
In the event of the EU going ahead with its plans, some analysts say a ‘tit for tat’ retaliation could ensue.
An example was when China blocked a $3.8-billion purchase from Airbus at the Paris air show this year, reportedly over anger at the aviation scheme.
Source : Business Standard
