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European court defies US over airline carbon tax

Europe's highest court has upheld the EU's right to impose its carbon cap-and-trade scheme on international airlines, rejecting an appeal from U.S. carriers.
Image: A passenger plane shortly after takeoff at the Geneva international airport
A picture taken on March 11, 2010 shows a passenger plane shortly after takeoff at the Geneva international airport.Fabrice Coffrini / AFP - Getty Images, file
/ Source: staff and news service reports

Europe's highest court has upheld the right of the European Union to impose a carbon cap-and-trade scheme on international airlines using European airports, rejecting an appeal from U.S. airlines.

The European Court of Justice in Luxembourg dismissed the argument Wednesday that the program infringes on national sovereignty or violates international aviation treaties.

The carbon trading program, which would force airlines to pay for the carbon they emit, is due to go into effect Jan. 1.

The Emissions Trading System (ETS) — used to charge industries such as oil refineries, power stations and steel works for CO2 emissions as part of Europe's efforts against climate change — is one of the widest reaching measures adopted by any country or regional bloc to regulate the greenhouse gases blamed for global warming.

The suit was brought by U.S. airlines acting through the industry trade organization Airlines for America, but the protest was supported by China, India and other countries with international carriers.

Critics of the EU rules have argued that under the 1997 Kyoto climate pact, countries agreed to address emissions from aviation jointly through the U.N.'s aviation body, the International Civil Aviation Organization (ICAO).

In a preliminary ruling in October, ECJ Advocate General Juliane Kokott said the EU was within its rights to take unilateral action because those talks have not yielded significant progress after more than a decade.

Clinton urged EU to reconsiderThe EU already sets a cap on the level of emissions allowed from factories and power plants. Emitters exceeding their quotas must buy carbon permits, while those within their limits can sell any unused allowances.

Secretary of State Hillary Clinton last week wrote to European officials, urging them to reconsider and saying the United States was prepared to take unspecified action.

As Europe's highest court, the ECJ ruling is final, although there is some flexibility in how the EU's regulations may be applied.

Airlines initially would only be required to pay for 15 percent of the carbon they emit and would be allocated free allowances to cover the other 85 percent.

The law also allows for "equivalent measures," meaning incoming flights to Europe would be exempt if the nation from which they came had measures in place to offset the international emissions of the route.

Last week's letter, signed by Clinton and U.S. Secretary of Transportation Raymond LaHood, said equivalent measures were not enough.

It urged the EU "to reconsider this current course" and re-engage with the rest of the world. "Absent such willingness on the part of the EU, we will be compelled to take appropriate action."

The Associated Press and Reuters contributed to this report.