EU Court Rules US Airlines Must Pay for Carbon Emissions

The Court of Justice of the European Union ruled Wednesday that airlines flying to and from Europe will pay for carbon emissions, starting Jan. 1, 2012.

This decision will impact U.S. airlines, forcing American companies to participate in a European Union agreement to cut carbon emissions that was made in 2003. 

“Today’s court decision further isolates the EU from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change," said Airlines for America in a statement released Thursday. Airlines for America is an industry trade organization that contested the original decision through litigation in 2009, when it was known as the Air Transport Association of America. Wednesday's decision upheld the original verdict made by the London High Court of Justice. 

"The court did not fully address legal issues raised and has established a damaging and questionable precedent by ruling that the European Union can ignore the Chicago Convention and other longstanding international provisions that have enabled governments around the world to work cooperatively to make flying safer and more secure, and to reduce aviation’s environmental footprint," said Airlines for America.

Although aviation emissions were not originally included in the European Trading Scheme, which outlines emissions allowances per industry, they were added in 2008. 

Some analysts posited that this decision will increase the cost of a flight, and perhaps the cost of shipping packages internationally, as the costs to businesses are often transferred to customers. Others are concerned it will incite a trade war. The exact cost of compliance was not available at the time of this article's publication. 

American Airlines spokesperson, Tim Smith said, "I don't know that number at this time, other than it has lots of zeros in it." Smith also declined to speculate about future airline ticket price increases. 

"The U.S. Department of Justice does not allow airlines to discuss possible future pricing actions that may, or may not, occur. They consider that price signaling to competitors."

Airlines for America stated it wants U.S. entities to protest this decision, and plans to pursue options in the English High Court.