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EU law to impose carbon cost on all airlines from Jan. 1

* Airlines say EU regulation unfair, unilateral

* EU climate commissioner hails ruling as crystal clear

* U.S. Secretary of State Hillary Clinton wrote to EU (Adds comment on customer costs in final 2 paragraphs)

By Michele Sinner and Barbara Lewis

LUXEMBOURG/BRUSSELS (Reuters) – Europe’s highest court gave unreserved backing on Wednesday to an EU law to charge airlines for carbon emissions on flights to and from Europe, a decision likely to escalate tension with trading partners, especially the United States.

The court ruled against a group of U.S. airlines that had challenged a law requiring that all airlines flying to and from European Union airports will have to buy permits under the EU’s emissions trading scheme from Jan. 1. The initial cost is expected to be minimal but would rise to an estimated 9 billion euros ($11.8 billion) by the end of 2020.

“Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue, nor the o
EU Climate Commissioner Connie Hedegaard, for whom the carbon trading scheme is one of the main weapons to combat climate change, was among the first to welcome the decision.

“After a crystal-clear ruling today, the EU now expects U.S. airlines to respect EU law as the EU respects U.S. law,” she said in a Twitter posting.

“We reaffirm our wish to engage constructively with everyone during the implementation of our legislation,” she added in a statement.

The U.S. government, which has warned it could take “appropriate action” if the EU did not reconsider this aspect of the Emissions Trading Scheme (ETS), said it was dismayed by the ruling, and reiterated that it wanted the issue addressed by the International Civil Aviation Organization (ICAO).

“We continue to have strong legal and policy objections to the inclusion of flights by non-EU air carriers in the EU ETS,” Krishna R. Urs, deputy assistant secretary for transportation affairs at the U.S. State Department, said in statement.

Airline associations reacted swiftly.

U.S. airline industry body Airlines for America said it was reviewing its legal options, but meanwhile would “comply under protest”.

“The U.S. government and dozens of others around the world are increasing pressure on the EU to come back to the table to consider a global sectoral approach,” it said in a statement.pen-skies agreement,” the European Court of Justice (ECJ) said.

Wednesday’s ruling was expected after a senior adviser to the court issued a preliminary opinion in October that found the EU legislation did not infringe other states’ sovereignty and was compatible with international accords.
source: Reuters