* U.S. airlines make court challenge to EU carbon market
* Airlines charge that EU rules breach U.S. sovereignty
By Pete Harrison
LUXEMBOURG, July 5 U.S. airlines stepped up
their campaign against European Union climate policy on Tuesday,
challenging the EU in its highest court over the right to
regulate their greenhouse gas emissions.
The EU aims to lead the world in fighting climate change,
and says it needs to put a price on carbon dioxide emissions to
guard against future climate impacts such as crop failures,
droughts or flooding.
From January 2012, airlines flying to or from Europe will
have to buy permits from the EU's Emissions Trading Scheme (ETS)
for 15 percent of the carbon emissions they produce during the
entire flight. They join 11,000 factories and power plants
already in the scheme.
China criticised the scheme on Tuesday ,
adding to fears of a brewing trade war.
The Air Transport Association of America (ATA) mounted its
challenge to the EU on two main fronts -- that its climate
regulations breached U.S. sovereignty, and secondly that they
comprised an illegal charge under the main international treaty
on air travel, the Chicago Convention.
"The EU does not have competence to regulate third country
airlines in third country airspace," Derrick Wyatt, a lawyer for
ATA, told the European Court of Justice in Luxembourg.
"It is astonishing that a U.S. airline must acquire an EU
licence to cover emissions at a U.S. airport."
On a typical San Francisco to London flight, just under 9
percent of emissions occur in the EU, compared to 25 percent
over the Atlantic, 37 percent over Canada and 29 percent over
the United States, he added.
EU lawyers said the cost of emissions permits for a
transatlantic flight amounted to little over 6 euros per
passenger, most of which the airlines would be granted for free.
They said the bloc had only chosen to include aviation in
its carbon market after airlines themselves chose the scheme in
preference to other tools such as eco-taxes or charges on jet
"A market-based system is the system that IATA and the
airlines have always been urging -- a system that is the most
economically efficient, as they recognise themselves," said
European Commission lawyer Eric White.
"The claimants seem to think that extra-territoriality
equals illegality -- of course that's not the case," he added.
Other EU lawyers also made the point that many valid laws
have an indirect impact in third countries, such the need for
travel visas or U.S. demands for the personal data of arriving
air travellers, but that does not render them illegal.
As a further example, European road safety laws prevent
truck drivers from driving more than nine hours in a day, even
if the first part of the journey takes place outside the EU,
argued Sam Wordsworth, on behalf of the British government.
Airlines say their emissions should only be tackled in U.N.
bodies, such as the International Civil Aviation Organization
(ICAO), which have clear rules to prevent countries imposing
illegal charges on each others' airlines.
EU lawyers countered that ICAO had already ruled that the
ETS was quite distinct from, and preferable to, other charges
such as eco-taxes or jet fuel levies.
Environmentalists said global talks to find a solution to
aviation's emissions had dragged on for 14 years, and airlines
should not attack the only meaningful piece of regulation.
"Instead of flying planeloads of lawyers to Europe, the
aviation industry should face up to its future and get on with
the job of cutting emissions," said Bill Hemmings of green
transport campaigners T&E.
(Reporting by Pete Harrison, editing by Rex Merrifield and