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EU court backs ETS amid controversy

By Hpanchal on October 6, 2011

This summer, the U.S. Air Transport Association initiated a court challenge to test the legality of the European Union’s emission trading scheme when applied to the aviation industry. In a recently released preliminary court opinion, Germany’s advocate general asserted that the ETS doesn’t violate international law. Leading aviation authorities blatantly disagree.

Arguing that the EU ETS’ inclusion of global aviation is legal, the German Advocate General at the Court of Justice of the European Union Juliane Kokott disputed opposition to the scheme. A press release issued by the Court of Justice of the European Union laid out her views, including that the EU ETS is an initiative to combat climate change — as opposed to a moneymaking scheme.

The EU ETS, which forces carriers flying in or out of Europe to monitor their emissions and purchase carbon allowances if the flight exceeds a pre-determined limit, officially goes into effect on January 1. It’s also a perfect legal way to promote sustainability, Kokett argued.

“There is … no impermissible unilateral action on the part of the European Union outside the framework of the International Civil Aviation Organization since, under the Kyoto Protocol, the limitation and reduction of greenhouse gases is not the exclusive competence of the ICAO,” the EU press release stated. “The Open Skies Agreement does not rule out the application of market-based measures regarding aviation emissions either.”

IATA officials would beg to differ. Blasting the EU ETS as an “infringement on sovereignty and the Chicago Convention,” IATA Director General and CEO Tony Tyler expressed his dismay about Kokett’s opinions. A better way to lower carbon emissions, he argued, is to follow the principles outlined by the ICAO.

Despite calling Kokott’s opinion an “important step in the court process,” an ATA spokesman was quick to point out that it’s a non-binding document. What’s more, ATA officials remain optimistic that a compromise can be reached. "[The] opinion will provide a basis on which the judges assigned to the case can further deliberate and come to a full and unanimous decision. In complex cases such as this one, it would not be unusual for the full court’s final opinion to vary from the preliminary opinion.”

Opposition to the EU ETS in all corners of the aviation sector has been intensifying. Members of the Indian government drafted up a declaration condemning the scheme recently. Prashant Sukul, joint secretary in India’s Ministry of Aviation, talked about his government's strategy during a panel Routes conference in Berlin last weekend.The agreement united 25 countries — including South Africa, the U.S., Brazil, Egypt, Argentina, Chile and China — against the EU ETS.

“My feeling is that the court proceedings won’t really go the Americans’ way,” Sukul correctly predicted during the conference. “Seeing that, we had decided to get everyone together and organize solid political opposition to this.”

Details of India’s organized opposition came during a Sunday panel on the international politics of aviation during which a heated debate of the EU ETS inflamed the passions of each panelist.

As diplomatically as possible, Folasade Odutola of the International Civil Aviation Organization called the EU ETS a contentious issue. She said the ICAO is working on a global framework for addressing the aviation’s impact on climate.

“We are working assiduously to put in place a framework for market-based measures, so that everybody will be satisfied,” Odutola said. “The way EU ETS is put together, everybody is not happy with that. We’re trying to find a solution.”

In an email to Air Cargo World, ICAO's Stéphane Dubois elaborated on the organization's measures. "ICAO is working on the development of a global framework for market-based measures pursuant to Resolution 37-19 that was passed by the General Assembly [on] October 8, 2010. The assembly requested that an analysis be undertaken in 2011 regarding how states, and their aviation operators, would be impacted by MBMs.  This analysis, which will be completed shortly, will help inform the deliberations of the ICAO Council on the global MBM framework. The council will then report back to the general assembly on the overall MBM framework in 2013."

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