Brussels, 21/12/2011 (Agence Europe) - Directive 2008/101/EC, which includes aviation activities in the EU's emissions trading scheme (ETS) is valid. It infringes neither the principles of customary international law, nor relevant international conventions, nor the Open Skies Agreement between the European Union and the United States. Thus ruled the Court of Justice of the EU in a judgment handed down on Wednesday in Case C-366/10. The directive will, then, come into force as planned on 1 January 2012.
A number of American and Canadian airlines and airline associations contested the measures transposing Directive 2008/101 in the United Kingdom. The directive requires all airlines, including those of third countries, to acquire and surrender emission allowances for their flights which depart from and arrive at European airports. The complainants contended that the directive infringes the principles of customary international law (sovereignty of states over their airspace, the illegitimacy of claims to sovereignty over the high seas and freedom to fly over the high seas), and also the Chicago Convention on international civil aviation, the Kyoto Protocol on climate change and the EU-US Open Sky Agreement on transatlantic flights.
In its ruling, the Court essentially follows the line developed by Advocate General Juliane Kokott in her opinion (see EUROPE 10468). It states, firstly, that only the three principles of customary international law mentioned above and certain provisions of the Open Skies Agreement may be relied upon for the purposes of examination of the validity of the directive.
In particular, the Court establishes that the EU is not bound by the Chicago Convention because it is not a party to that convention. It also observes that the parties to the Kyoto Protocol may comply with their obligations in the manner and at the speed upon which they agree and that, in particular, the obligation to pursue limitation or reduction of emissions of certain greenhouse gases from aviation fuels, working through the International Civil Aviation Organisation (ICAO), is not unconditional and sufficiently precise to be capable of being relied upon. The EU may, then, legislate alone. Finally, the Court finds that there is insufficient evidence to establish that the principle that a vessel on the high seas is governed only by the law of its flag could apply by analogy to aircraft.
As regards the three principles of international law that may be relied upon, the Court notes that the directive does not infringe the right of over-flight, as it does not apply to aircraft flying over the high seas or over the territory of the member states of the EU or of third states. It is only if the operators of such aircraft choose to operate a commercial air route arriving at or departing from an airport situated in the EU that they are subject to the emissions trading scheme. It also complies with the principle of territoriality and the sovereignty of third states, since the scheme is applicable to the operators only when their aircraft are physically in the territory of one of the member states of the EU and are thus subject to the unlimited jurisdiction of the EU. As for the fact that the operator of an aircraft is required to surrender emission allowances calculated on the basis of the whole of the flight, the Court points out that EU policy on the environment aims at a high level of protection. Thus, the EU legislature may, in principle, chose to permit a commercial activity, in this instance air transport, to be carried out in its territory only on condition that operators comply with the criteria that have been established by the EU.
Moreover, the Court rules, the directive does not breach the EU-US Open Skies Agreement with regard to the obligation to exempt fuel from taxes, duties, fees and charges. In contrast to the defining feature of obligatory levies on the consumption of fuel, in the ETS there is no direct and inseverable link between the quantity of fuel held or consumed by an aircraft and the pecuniary burden on the aircraft's operator. The Court says that, inasmuch as a market-based measure is involved, the actual cost for the operator “depends not directly on the number of allowances that must be surrendered, but on the number of allowances initially allocated to the operator and their market price when the purchase of additional allowances proves necessary in order to cover emissions”. Nor can it even be ruled out, the Court submits, that an aircraft operator, despite having held or consumed fuel, will bear no pecuniary burden resulting from its participation in the emissions trading scheme, or will even make a profit by assigning its surplus allowances for consideration.
The Court concludes by stating that the uniform application of the scheme to all flights which depart from or arrive at a European airport is consistent with the provisions of the Open Skies Agreement designed to prohibit discriminatory treatment between American and European operators. (FG/transl.rt)