U.S. airline operators filed a claim in the European Union Court of Justice seeking to avoid inclusion in the EU’s Emissions Trading System on the grounds that it was invalid as applied to them and not justified by international law or specific arguments between the EU and the United States. The Court, confirming an earlier decision of its advocate general, rejected the claim, holding that the EU has the right to permit a commercial activity, in this instance air transport, to be carried out in its territory only on the condition that operators comply with the criteria that have been established by the EU. The court rejected the argument by the airlines that the ETS could not apply to flights that mostly take place outside of EU territory. A 2008 Directive requires that, beginning January 1, 2012, all airlines flying into, out of, and within the EU possess enough carbon allowances to cover their greenhouse gas emissions.
Air Transport Association of America v. Secretary of State for Energy and Climate Change
At Issue: Challenge to U.S. airlines' inclusion in EU Emissions Trading Scheme