<<The direction of a legal battle over the European Union’s regulation of airlines’ greenhouse-gas emissions, which has great implications for the maritime industry, maybe revealed as soon as next month. The European Court of Justice is expected to deliver its initial findings in a case brought by US airlines against the UK Government and European Commission over the inclusion of international airlines in the EU Emissions Trading Scheme as soon as late September.
The international maritime industry has a lot at stake in this case. Brussels is also formulating a proposal to regulate GHGs from all shipping in the EU in much the same way. The chances of it successfully doing so will be heavily influenced by the outcome of the aviation case in Europe’s highest court. An initial ruling from the ECJ could come in September or October, although there are expectations the full course of legal action could carry over into next year, which takes beyond the date the regulation comes into force.
From January 1, Brussels will bring airlines into the EU ETS and require the surrender of emissions permits for every ton/km of CO2 emitted during operation on all internal and international flights to and from EU airports. Airlines, their trade associations and government transport officials in the US, China, India, Russia and the Asia-Pacific have railed against the move. Their key argument is that applying EU law to foreign airlines violates international law governing aviation, and violates the sovereignty of other nations. European airline associations are also putting the squeeze on Brussels, fearful that the intense lobbying by foreign governments and airlines will see the Commission bow to pressure and exempt foreign carriers, disadvantaging EU carriers. This appears unlikely, however, with provisions for exemption only available to those countries with similar emissions caps in place to the EU’s ETS.
In the face of at times furious attack, the European Commission appears to be sticking to its guns. It has consistently argued that it wants to see the aviation and maritime sectors in Europe subject to the same emissions controls as land-based emitters. Emissions from these sectors are expected to grow enormously worldwide over coming decades without controls. The Commission has long said it would look to implement market-based measures (likely emissions trading, or possibly a bunker levy) on international shipping to reduce emissions if no global agreement to do so emerges from the IMO or UNFCCC. The IMO has agreed the mandatory application of new energy efficiency design and operational standards for vessels, EEDI and SEEMP, but these measures do not cap or reduce emissions overall, only slowing their growth over the next 20 years. Because of this, Brussels’ position previously has been that EEDI and SEEMP would not be enough to stop it proceeding with its own regulation of shipping. It is currently expected to reveal a proposal in the second quarter of 2012 and aim for implementation around 2014.
However, if the US airlines case were successful, this would force the European Commission to reconsider similar action in shipping. An International Civil Aviation Organisation (ICAO) agreement earlier this year to reduce airline emissions growth also left it open for the EU to go ahead with inclusion of the sector in its ETS.>>
