EU Court: Airline Carbon Law Is Legal

A European Union law forcing airlines from all over the world to hold permits to emit greenhouse gases in order to fly in and out of the EU is compatible with international law, the European Court of Justice said in an opinion Thursday, setting the EU in sharp contrast with major countries.

"EU legislation doesn't 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," said Advocate General Juliane Kokott.

The opinion could now spark a bigger diplomatic row because, just last week, 20 countries including the U.S. Japan, Russia and India signed a joint declaration against the EU emissions-trading scheme. The document said the plan "is inconsistent with applicable international law."

The advocate general—a legal adviser for the ECJ whose opinion isn't binding but is followed in the final ruling in the majority of cases—also said that only sovereign states can appeal the EU plan.

The Air Transport Association of America and the U.S. airlines American Airlines, Continental and United Airlines, supported by the International Air Transport Association and the National Airlines Council of Canada, have brought a case before a U.K. court, which has in turn asked the EU court whether this extension of the European carbon market, called Emissions Trading System, is valid in light of a number of international agreements.

According to EU law, airlines will join the ETS starting Jan. 1, 2012. That means the carriers' carbon dioxide emissions will be capped and the companies will be forced to hold permits to emit. They will have to buy slightly less than 20% of their allowances, with the rest being handed out for free.

China, Russia and other major nations, as well as airlines worldwide, have criticized the project. Non-EU governments and airlines argue that the EU has no right to regulate emissions outside its borders, and hasn't set an objective standard for equivalent measures.

The law "doesn't contain any extraterritorial provision, nor does it infringe the sovereign rights of third countries," the opinion said.

Governments outside the EU have said they may next challenge the bloc's plan in the United Nations, through its International Civil Aviation Organization in Montreal.

(Via The Wall Street Journal)