The inclusion of international aviation in the EU's Emissions Trading Scheme (ETS) is fully compliant with international law and all relevant international agreements, Europe’s highest court said in a preliminary opinion Thursday.

The EU in 2008 adopted a directive including aviation in its existing ETS, requiring all airlines—including those from non-EU countries—to acquire and surrender emission allowances for their flights from and to European airports from 2012.

The US Air Transport Assn. (ATA) and two of its members, American Airlines and United Continental Holdings, challenged the legality of the EU legislation, arguing that by including international aviation—and transatlantic aviation in particular—in the EU ETS, the EU had breached several international agreements including the Chicago Convention and the EU-US open skies agreement. They also argued that it contravened customary international law regarding state's sovereignty over their own airspace (ATW Daily News, July 15).

The Court of Justice of the EU (CJEU) advocate general Juliane Kokott dismissed the claims Thursday. The advocate general's ruling is not binding, though the CJEU's judges usually follow the decisions of an advocate general. The judges are expected to come to a final ruling in early 2012.

“The directive does not contain any extraterritorial provision, nor does it infringe the sovereign rights of third countries. Take-off and landing are essential and particularly characteristic elements of every flight; therefore, as a place of departure or destination, an airport within the territory of the European Union provides an adequate territorial link for the whole of the flight in question to be included in the EU emissions trading scheme,” the opinion read.

The advocate general also concluded that the limitation and reduction of greenhouse gases is not the exclusive competence of ICAO and thus there is “no impermissible unilateral action” on the part of the EU outside the ICAO framework.

Kokott also took the view that under the EU ETS airlines are not charged any fees, dues or other charges within the meaning of the relevant international law agreements.

“The EU emissions trading scheme is a market-based measure, the purpose of which is environmental and climate protection,” she said. “Accordingly, the emission allowances that have to be surrendered in respect of flights that take off from or land at airports within the European Union are levied in respect of the emission of greenhouse gases, not merely fuel consumption or the persons or property on board.”

IATA said it was disappointed with the preliminary ruling and stressed that it was “only part of a complex set of developments” concerning the EU ETS.

“While the advocate general of the CJEU believes that Europe is within its rights to move forward with this extra-territorial measure, that opinion is not shared in the international community,” IATA DG and CEO Tony Tyler said. “Many governments are rightly concerned about the infringements on sovereignty and the Chicago Convention that Europe’s plans pose.” He pointed to the declaration signed last week by more than 20 states including India, China, Japan, the US and Russia vowing to challenge the plan’s extra-territoriality at ICAO (ATW Daily News, Oct. 4).

ATA said it was disappointed that Kokott “does not believe that the European Union is bound by the Chicago Convention, the treaty governing aviation.”

EU's Commissioner for Climate Action Connie Hedegaard issued a statement saying she was “glad to see that the advocate general's opinion concludes that the EU directive is fully compatible with international law.” She said the EU “reaffirms its wish to engage constructively with third countries during the implementation of this legislation.”  

Meanwhile, the Netherlands’ aviation state secretary Joop Atsma will recommend making changes or postponing the introduction of the EU ETS at next Monday's meeting of the EU’s environment council in Luxembourg, Dutch media reported. The suggested change would be to contain the ETS initially to intra-European flights. Atsma said the Netherlands and the 26 other EU member states signed up to include aviation in the EU ETS on Jan.1, 2012 on condition that it was a “globally operating system.” He vowed the country will do “everything possible to avoid this being solely introduced in Europe.”

“The effect must not be that new hubs emerge outside Europe, meaning simply more will be flown and therefore CO2 emitted,” he said at the annual Schiphol Dinner, organized by the Amsterdam Chamber of Commerce. He indicated the Netherlands had “some allies” in Europe.