US airlines fight EU's emissions rules in court

(LUXEMBOURG) - US airlines took their battle against the European Union's emissions cap to court Tuesday, arguing that charging foreign companies for carbon permits violates international agreements.

Starting on January 1, the EU will force foreign airlines flying to and from Europe to buy carbon permits under the 27-nation bloc's Emissions Trading System (ETS).

The Air Transport Association of America, together with United Continental and American Airlines, argued before the European Court of Justice that imposing the system on foreign companies violates international aviation and climate change agreements.

Chinese airlines have also criticised the EU's plans, saying it would cost them an additional 800 million yuan (85 million euros, $123 million) a year.

The Association of European Airlines (AEA) and European aerospace giant Airbus have voiced concerns about the scheme too and are eagerly awaiting the court's ruling, which is not due for several months.

Under the system, airlines will have permits to emit a certain amount of carbon dioxide. They will have to buy more emission allowances if they exceed the limit but they will also be able to sell any surplus allowances.

"The airlines recognise that greenhouse gas emissions, including those from aviation, pose a serious environmental problem," Derrick Wyatt, the lawyer representing the airlines, told the court.

"But the airlines consider that the only way of ensuring a coherent framework for reducing emissions from aircraft is through multilateral agreement, rather than through unilateral and piecemeal regulation, which can only lead to chaos at the international level," he said.

Wyatt argued that it is unfair to charge companies for emissions that mostly take place in airspace outside of Europe. The case before the court stems from a complaint over the way the directive is applied in Britain.

The European Commission voiced confidence that the Luxembourg-based court will side with Brussels, saying the system was consistent with international law.

"This is not a tax, a levy or a charge. This is a pollution ceiling," Isaac Valero Ladron, the commission spokesman for climate change policy, told AFP.

Airlines from countries that apply a carbon cap system similar to the EU's scheme would be exempt, he said, adding that Brussels will not amend or withdraw the legislation.

"The purpose of the directive is to reduce emissions, not to charge companies," Valero Ladron said.