Carbon tax of Swiss flights legal says EU top court advisor

BRUSSELS (Reuters) - The European Union is within its rights to apply carbon taxes to flights between Switzerland and the regional bloc even though flights from other countries outside the area are exempt for now, a legal advisor to the EU’s top court said on Tuesday.

The European Court of Justice is considering a case brought by Lufthansa-owned Swiss International Air Lines [SWIN.UL], which says it is “peculiarly badly affected” by the current system and is not being treated equally.

“The principle of equal treatment simply does not apply to the treatment that the European Union accords to various third countries,” Advocate General Henrik Saugmandsgaard Oe wrote in a legal opinion published on Tuesday.

The European court still has to issue a ruling on the issue but it generally follows the recommendations of its adviser.

Switzerland is a close partner of the EU and has a special trading status with the bloc, including on environmental legislation. It has been in talks over the past five years to join the EU Emission Trading System (ETS).

The ETS covers flights within the European Economic Area - which includes the EU countries plus Norway, Iceland and Liechtenstein - and requires industries to buy permits to pollute. The EU tried to extend the system to flights beyond the EEA in 2012, but that caused outcry.

In response the EU suspended its plans and a U.N. body, the International Civil Aviation Organization (ICAO), took on the task of devising a carbon tax system for global aviation. It is due to present its plans by late 2016.

Switzerland is the only nation outside the EEA whose flights are not covered by the carbon tax suspension.

Swiss International is seeking to recover over 600,000 carbon permits, worth millions of euros.

Reporting by Alissa de Carbonnel; editing by Philip Blenkinsop and Alexandra Hudson