Opinion Says U.S. and Canada Airlines Are Subject to EU Emissions Program

U.S. and Canadian airlines can be required to surrender greenhouse gas emissions allowances for their flights into and out of Europe according to an October 6 opinion by the Advocate General for the European Court of Justice. The opinion concluded that international laws and treaties do not bar application of the European Union's emissions trading scheme (EU ETS) to international air carriers. If foreign airlines are subject to the EU ETS, then starting January 1, 2012, they will have to buy and surrender emissions allowances for all their European flights, even those that originate or land outside of the EU.

Background

The EU ETS is a cap-and-trade program to limit and reduce greenhouse gas emissions through issuance, trading and surrender of allowances. The EU ETS initially did not include aviation emissions, but in Directive 2008/101 (Directive) the EU added airlines starting the first of next year.

The Directive applies to any air carrier flying into and out of an EU member state, and not just to European-based air carriers. The Air Transport Association of America (ATAA), together with American Airlines, Continental Airlines and United Airlines brought an action in the High Court of Justice of England and Wales against the United Kingdom's regulations implementing the Directive. The U.K. court referred the case to the European Court of Justice, which was organized by the EU members to interpret and apply the EU treaties in a uniform manner. Numerous parties intervened in the case.

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