European Union Emissions Trading Scheme Challenged by Airlines

The Climate Report - Winter 2011

The European Union's extension of its emissions trading scheme, known as " EU-ETS," to the aviation sector holds significant financial implications for aircraft operators and aerospace suppliers.

Requirements for carbon allowances under the regulations will be implemented in January 2012, while other aspects of the regulations (such as reporting) are already in place.

Because the EU-ETS aviation regulations effectively span the globe by covering certain emissions of foreign-registered aircraft outside of EU airspace, they have been controversial from the start.

It is therefore hardly surprising that three U.S. airlines and the U.S. airline industry's principal trade association, the Air Transport Association of America, contested the application of the EU-ETS regulations to airlines outside the EU. Their lawsuit was originally filed with the United Kingdom's High Court, as the UK is administering the regulations appilcable