Air Transport Association of America and Others v Secretary of State for Energy and Climate Change.

The trade body for US airlines and a number of US airlines challenged the validity of Directive 2008/101 amending Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowance trading within the EU (OJ L8/3). The applicants argued that the inclusion of international aviation in the Emissions Trading Scheme was contrary to international law and to the Chicago Convention on International Civil Aviation, the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the 2007 Air Transport Agreement between the European Community and the USA (‘the Open Skies Agreement’). The judgment of the Court concerns, first, the circumstances in which principles of customary international law and provisions of international treaties may be relied upon in the context of a reference for a preliminary ruling on the validity of a measure and, secondly, the validity, in the light of international treaty law and customary international law, of Directive 2008/101. As a result of its analysis of the first point, the Court (Grand Chamber) did not consider the claimants' arguments under the Chicago Convention or the Kyoto Protocol. It considered that the EU, as such, is not bound by the Chicago Convention since it is not a party to it, and that article 2(2) of the Kyoto Protocol, which requires the parties to pursue limitation or reduction of emissions of greenhouse gases not controlled by the Montreal Protocol from aviation, working through the International Civil Aviation Organisation, is neither unconditional nor sufficiently precise to confer on individuals the right to rely on it when contesting the validity of the Directive. The Court, therefore, examined the validity of the Directive only in the light of certain provisions of the Open Skies Agreement and three principles of customary international law, concluding: a) The Directive does not breach the relevant provisions of the Open Skies Agreement, in as much as: (i) the ‘Application of Laws’ provision in the Open Skies Agreement does not preclude the application of the allowance trading scheme set up by the Directive when the airline arrives or departs from the territory of a Member State; (ii) these environmental measures are not invalid on the basis that they are uniformly applied in a non-discriminatory manner to airline operators established both in the EU and in non-EU countries; (iii) the Directive does not involve a form of obligatory levy in favour of the public authorities that might be regarded as constituting a customs duty, tax, fee or charge on fuel held or consumed by aircraft operators. b)The Directive does not breach customary international law principles of sovereignty of States over their air space, of freedom to fly over the high seas and the principle that no State can claim sovereignty over the high seas. In particular: (i) the scheme is, de facto, applicable only to aircraft that are physically in the territory of one of the Member States of the EU as they arrive at or depart from an airport situated in the EU, and therefore does not infringe any of those principles; (ii) as for the fact that the Directive considers segments flown outside the EU's air space when calculating the emissions allowances, the Court points out that EU policy on the environment seeks to achieve a high level of protection. Consequently, the EU can choose to permit a commercial activity to be carried out in its territory on condition that operators comply with criteria established by EU law. Furthermore, the fact that certain matters contributing to the pollution of the air, sea or land territory originate in an event which occurs partially outside the EU territory does not call into question the full applicability of EU law in that territory.