On December 16, 2009, the Air Transport Association of America (ATA) and three of its individual airline members – American, Continental and United – filed a legal action in the United Kingdom (UK) challenging the first stage of the UK’s Aviation Greenhouse Gas Emissions Trading Scheme Regulations. These regulations, which went into effect in September 2009, implement a portion of the 2008 European Union (EU) Directive that extends the Emissions Trading Scheme (EU ETS) to airlines. The following Q&A explains why ATA initiated this legal action and addresses some frequently asked questions about the action.
Q: Why did ATA bring this action?
A: ATA and its members – along with many countries and airlines around the world – believe that the unilateral application of the EU ETS to non-EU airlines violates international law. We believe airline greenhouse gas (GHG) emissions should be addressed under a global approach, rather than through a unilateral action by the UK government or EU governments.
Q: Why does ATA believe that application of the EU ETS to the ATA airlines violates international law?
A: First, a bit of background. International aviation is governed primarily by treaty and by air service agreements between countries. In addition to imposing requirements directly on international flights, these treaties and air service agreements set forth rules and limits on the types of regulations individual countries can impose on the airlines of other countries. This makes sense. If one country or a set of countries could unilaterally impose any requirements they want on international flights, it would be very difficult – if not impossible – for flights from country to country to occur. Thus, the treaty and air services agreement rules are very important to ensuring freedom to travel and international commerce.
We believe application of the EU ETS to non-EU airlines violates several treaty provisions in the Convention on International Civil Aviation (commonly referred to as the “Chicago Convention”). Perhaps most significantly, that treaty (in Article 1) states that countries have sovereignty over the airlines in their own airspace. And yet, by its terms, the EU ETS provisions regulate U.S. airlines in U.S. airspace. For example, for a flight of a U.S. carrier from Dallas to London, the proposed legislation would regulate the emissions from that flight on the ground and as it takes off in Dallas, as it flies over Texas, Oklahoma, Missouri, Illinois, Indiana and Michigan, within U.S. offshore territory, over Canada and the Atlantic Ocean. Thus, the EU ETS provisions would regulate the entire flight, even though the flight would be in EU airspace for only a tiny fraction of the journey.
The EU’s unilateral requirements also interfere with the International Civil Aviation Organization’s authority to regulate flights over the high seas pursuant to Article 12 of the Chicago Convention. Further, we believe the fees imposed on U.S. airlines under the EU ETS are contrary to the limitations imposed by the Chicago Convention and the air service agreement between the U.S. and the EU on the types of taxes and charges one country can impose on the airlines of another.
In sum, we have significant concerns about the unilateral imposition of the EU ETS on U.S. airlines, such that we believe a court of law should sort the issues out.
Q: Are ATA and its airlines the only ones who believe the EU ETS violates international law?
A: No. Many governments and airlines from all over the world have stated they believe application of the EU ETS to non-EU airlines violates international law.
Q: If the EU ETS is being implemented throughout Europe, why did ATA bring this action in the UK?
A: Although the Directive extending the EU ETS to airlines was adopted by the European Parliament to apply in all EU countries, actual implementation occurs on a country-by-country basis. As the UK was the first European country to adopt regulations implementing the EU ETS as to the airlines and UK deadlines for challenging regulations (referred to as “statutes of limitation”) were looming, ATA was compelled to bring the action in the UK.
Q: Why did only three ATA member airlines explicitly join ATA in bringing this action?
A: ATA brought the action on behalf of all of its members as the principles involved – including that aviation greenhouse gas emissions should be regulated on a global sectoral basis and that unilateral action by any country or group of countries violates international law – are of critical importance to them. The three ATA airlines expressly named in the matter, American Airlines, Continental Airlines and United Airlines, are the ATA airline members designated by the European Commission as coming under the UK’s administration of the EU ETS.
Q: Are the ATA airlines complying with the EU ETS requirements while the legal challenge is pending?
A: Yes. Our airlines are responsible corporate citizens and are respectful of the law. While ATA and its airlines believe the EU ETS requirements violate international law, the ATA airlines are complying with applicable requirements, although they have made clear that this “under protest” given the significant legal concerns.
Q: I’ve heard that airlines are one of the largest sources of greenhouse gas emissions, is this true?
A: The airlines are a small contributor of GHG emissions. According to the Environmental Protection Agency (EPA), the U.S. airlines contribute just 2 percent of domestic GHG emissions. Globally, aviation accounts for just 3 percent of total GHG emissions and 2 percent of carbon dioxide (CO2) emissions. Given that the airlines drive almost three times as much economic output, the airlines are highly GHG-efficient economic engines. For example, the U.S. airlines improved their fuel efficiency by 110 percent between 1978 and 2008, saving 2.7 billion metric tons of CO2, roughly equivalent to taking 19.5 million cars off the road each of those years. Even so, the U.S. airlines and their counterparts worldwide are committed to continuing to improve and are relentlessly pursuing an array of initiatives in this regard.
At the core of these measures is the ATA carriers’ commitment to technology, operational and infrastructure measures to continue our drive towards ever-greater fuel and GHG-efficiency improvements. This includes tremendous airline investment in new aircraft, new aircraft engines, navigation aids and enhanced operational procedures. In addition, ATA and its airlines are dedicated to developing commercially viable, environmentally friendly alternative jet fuel, which could be a game-changer in terms of aviation’s output of GHGs. To this end, ATA is a founder and co-lead of the Commercial Aviation Alternative Fuels Initiative (CAAFI), a consortium of airlines, government, manufacturers, fuel suppliers, universities, airports and other stakeholders working to hasten the development and deployment of such fuels. Moreover, we are central stakeholders in partnering efforts to modernize the outdated air traffic management (ATM) system and to reinvigorate research and development in aviation environmental technology, both of which can bring extensive additional emissions reductions.
Q: If ATA does not think its members should be covered under the EU ETS, how does ATA think aviation greenhouse gas emissions should be addressed?
A: Given aviation’s worldwide operations, our view is that aviation greenhouse gas emissions should be addressed on a global sectoral basis, and that the International Civil Aviation Organization (ICAO), the United Nations body charged by treaty with establishing environmental and other standards for international aviation, is the appropriate body to establish such measures. ATA has joined the worlds’ airlines, air navigation service providers, airports and aircraft engine and airframe manufacturers in putting a concrete and aggressive proposal on the table for a global approach, with emission reduction targets that will ensure we continue our strong record of continuous reductions. Under our proposal, all airline emissions would be subject to collective emissions targets – an annual average fuel and CO2 efficiency improvement of 1.5 percent through 2020 and carbon-neutral growth from 2020, with an aspirational goal of a 50 percent reduction in CO2 by 2050 relative to 2005 levels. While the airlines will have to make significant investments to meet these targets, they also depend on governments doing their part with respect to air traffic control modernization, alternative fuels and research and development investments. (See ATA’s commitment).
Q: Isn’t there some way, other than through litigation, to resolve the dispute over the EU ETS?
A: ATA continues to believe that the best resolution of this issue is through international negotiations on our global sectoral approach proposal at ICAO. Alternatively, a country might chose to bring a legal action over the EU ETS at ICAO. Given the legal deadlines in the UK for private parties to challenge the application of the EU ETS to our airlines, however, we were compelled to bring this legal action to preserve our rights.