The airlines and their trade association, Air Transport Association of America – now known as Airlines for America – had challenged the legality of the EU’s Aviation Directive in May, claiming it infringed international law and the EU-U.S. open skies agreement.
But yesterday’s ruling by the Court of Justice of the European Union means the EU’s Aviation Directive, which includes aviation emissions within the European Emissions Trading System, will come into effect, as planned, in January 2012. It is currently the world’s only mandatory program to address emissions from aviation.
Environmental groups have hailed the ruling. Earthjustice called it “an important victory for the planet” while the WWF-UK labeled the airlines “Scrooges” for trying to circumvent the continent’s nascent carbon trading scheme.
The global business community has reacted with less elation. Rating agency Fitch has suggested the ruling could result in a trade war between the U.S. and EU. While delivery giant UPS is threatening to reroute flights to cut the costs it has to pay under the Directive, reports the Wall Street Journal.
The president of UPS Airlines has suggested that it could, for example, route flights between its hubs in Hong Kong and Cologne, Germany, via Mumbai, India, and only owe for carbon permits for the Mumbai-Cologne leg of the trip. Such a move would cut UPS’ permit costs by a quarter, but increase the journey’s total length by 900 miles and the carbon emissions associated with it by a third, the Journal reports.