21 December 2011: The Court of Justice of the EU (ECJ) has ruled that the EU decision to include the aviation sector in its Emission Trading Scheme (ETS) from 2012, thereby providing that all airlines – including those of third countries – will have to acquire and surrender emission allowances for their flights departing from and arriving at European airports, is lawful under international law.

A number of American and Canadian airlines and airline associations had contested the measure, arguing the EU infringed a number of principles of customary international law and various international agreements including the Kyoto Protocol because it would result in the imposition of a form of tax on fuel consumption and in the extraterritorial application of the measure.

In its ruling in case C-366/10 (The Air Transport Association of America and Others), the ECJ confirmed the validity of the measure and held, inter alia, that 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 (GHGs) from aviation fuels, working through the International Civil Aviation Organisation (ICAO), is not unconditional and sufficiently precise to be capable of being relied upon.

Welcoming the court decision, Connie Hedegaard, EU Climate Action Commissioner, reaffirmed the wish of the European Commission “to engage constructively with everyone during the implementation of our legislation.” [ECJ Press Release] [ECJ Decision] [EU Press Release]