European court upholds airline carbon tax

BRUSSELS, Dec. 23 (UPI) -- The European Union says it expects foreign carriers to abide by a court ruling upholding the legality of the EU's plans for a carbon tax on airliner emissions.

The European Court of Justice rejected a challenge from U.S. carriers and ruled Wednesday the EU was within its rights to slap an emissions tax on jets to and from 27 EU countries starting Jan. 1.

The court ruled the aviation directive -- imposed as part of the EU's emissions trading scheme -- doesn't violate the Open Skies Agreement, which guarantees that airlines can fly between and U.S. and European points, or the Kyoto climate change protocol.

"Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the Open Skies Agreement," the court ruled.

The ruling brought a denunciation from the U.S. State Department but EU Commissioner for Climate Action Connie Hedegaard said Brussels regards it as a crucial affirmation of its efforts to fight global climate change.

"I am of course very satisfied to see that the court clearly concluded that the EU directive is fully compatible with international law," she said in a statement.

"A number of American airlines decided to challenge our legislation in court and thus abide by the rule of law. So now we expect them to respect European law."

U.S. officials, however, contend the final arbiter of the dispute should be the United Nations' aviation arm, the International Civil Aviation Organization.

State Department spokeswoman Victoria Nuland said the United States is "disappointed" in the ruling.

"Our message to the European Union has been very, very consistent: that there are mechanisms in international aviation in ICAO for addressing the question of greenhouse gas emissions and that's where these things should be talked about," she said.

Washington says the need to pay a carbon tax on flights to EU countries will be extremely costly for U.S. carriers. One estimate contended it will add $11.7 billion to airlines' costs by 2020, the Financial Times reported.

The case was referred to the European Court of Justice from London's High Court, where the industry group Airlines for America had filed suit. The group indicated it is reviewing its options and observers expect the case will again come before the London court next year, the newspaper said.

Chinese airlines have also promised to file suit against the EU directive.

Chai Haibo, an official with the China Air Transport Association, told the Communist Party newspaper People's Daily last month his group will sue the EU in Germany over its provisions.

Expected to join the suit are Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines.

Chai said the carbon tax would hit Chinese airliners particularly hard because their fleets mainly consist of relatively new aircraft that produce fewer emissions, so they would be hard-pressed to find to way to reduce the levy.

U.S. and European fleets could easily reduce their tax burden by replacing older aircraft, he said.

The International Air Transport Association, which represents 240 airlines, also expressed disappointment at the European Court ruling, noting "growing opposition."

"A global framework for economic measures is a critical component of our strategy to achieve these challenging targets. But we won't get agreement on a global approach if states are throwing rocks at each other because Europe wants to act extra-territorially," the group said in a statement.