EU Aviation Directive Triggers Thunderstorm In Otherwise "Open Skies"

On December 21, 2011, the Court of Justice of the European Union ("CJEU") returned a ruling in the matter Air Transport Association of America, et al. vs. Secretary of State for Energy and Climate Change (C-366/10). At stake was the validity of Directive 2008/101/EC, amending Directive 2003/87/EC (establishing a scheme for greenhouse gas emission allowance trading within the European Community and amending Council Directive 96/61/EC) to extend the EU Emissions Trading Scheme to aviation activities including non-EU air carriers.

Under the extended scheme, all flights departing from or arriving at an EU airport are subject to Directive 2008/101/EC regardless of the carrier's country of registration or the flight's point of origin or destination. Since January 1, 2012, transatlantic flights operated by U.S. companies have been accountable for all carbon dioxide emissions generated thereby, not just emissions from the legs of such flights occurring over EU territory.