From 2012 onwards, the Aviation EU ETS will require aircraft operators with flights landing or taking off from an EU airport to buy allowances equal to the CO2 emissions of each flight.

The US Air Transport Association (ATA) and three airlines (Continental, American and United) believe that the new rules violate the US-EU Bilateral Air Transport Agreement of 2007 and the Kyoto Protocol. They also believe that the majority of emissions from their flights would be outside the EU and that, in any case, international emissions from aviation are a matter for the International Civil Aviation Organisation.

The US airline operators are bringing an action in the UK courts because the UK Government will be their regulator or their 'Administering Member State' (AMS) under the Aviation EU ETS. The AMS is either the Member State which has granted an airline's operating licence or, for aircraft operators outside the EU, the Member State where the aircraft operator's highest emissions were estimated to be in 2006. When the Aviation EU ETS begins, some allowances will be allocated free (provided that airlines have submitted certain information on their emissions). For the period 1 January 2012 to 31 December 2012, the aviation sector will be allocated 97% of the total annual emissions during 2004-2006 for free, with this figure dropping to 95% for 2013-2020.

The Department for Energy and Climate Change (DECC) has expressed its disappointment that this action has been taken, but states firmly that the EU ETS is intended to act 'as a stepping stone to a global system for tackling aviation emissions' to which the Government remains committed.

However, despite the publicity which the case has attracted, it is still at an early stage. It is to be referred to a High Court judge for application to bring a Judicial Review on its merits. If permission is granted, it is likely to be several more months before the case is heard, unless the case is expedited.

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