Court of Appeal asks the Court of Justice of the European Union to rule on the validity of the Aviation Emission Trading Scheme moratorium

02/04/15

On 1 April 2015, the Court of Appeal decided to refer questions to the Court of Justice of the European Union (“CJEU”) concerning the validity of a moratorium that the EU introduced for its Aviation Emission Trading Scheme (the “Aviation ETS”) in respect of flights that took place in 2012.

The moratorium was introduced against the backdrop of complaints by several third countries that the Aviation ETS infringed their sovereignty by regulating emissions from flights that started or ended in their jurisdiction (e.g. a flight from New York to London, the majority of which takes place outside EU airspace).  In 2013, the EU introduced a moratorium in respect of flights that took place in 2012 between EEA Member States and almost all third countries in the world except for Switzerland, in the hope that the moratorium would encourage third countries to agree to a global ETS for aviation emissions.

Swiss International Air Lines brought a claim for judicial review in the Administrative Court, arguing that the decision to exclude flights to and from Switzerland from the moratorium was discriminatory. The Secretary of State for Energy and Climate Change argued, however, that the EU is not required to treat third countries equally, and that in any event the decision to exclude Switzerland fell within the EU’s margin of appreciation. The Administrative Court accepted the Secretary of State’s submissions on both points.

The Court of Appeal, however, considered that the principle of equal treatment might prohibit discrimination relating to third countries in the EU’s internal legislation, even though the principle clearly does not apply to the EU’s exercise of its treaty making powers. The Court of Appeal also thought that if the principle of equal treatment did apply, then it was at least arguable that the EU had not given an adequate explanation for its exclusion of Switzerland from the moratorium. For those reasons, the Court has decided to ask the CJEU to determine whether it was lawful for the EU to exclude flights to and from Switzerland from the moratorium. 

The judgment is here.