Bruce Barnard | Jul 05, 2011 9:57AM EDT
U.S. airlines launched a legal challenge Tuesday to European Union plans to charge foreign carriers
American Airlines, United Continental Holdings and the Air Transport Association of America are seeking to overturn a law that extends the EU’s carbon regulations to cover flights that depart from or land at any EU airport.
The U.S. challenge, being heard at the European Court of Justice in Luxembourg, is backed by many foreign airlines which say the EU’s bid’s to extend its cap-and-trade program beyond its borders is illegal and risks sparking tit-for-tat trade wars.
The EU’s Emissions Trading Scheme, which was launched in 2005 and covers thousands of manufacturers, transport operators and utilities, compels companies that breach their CO2 quotas to pay fines or buy spare permits from firms that emit less their quotas.
The US carriers initially challenged the program in the High Court in London as the UK was the first country to include the EU law into its national rules.
The UK court referred the case to the EU’s top court in Luxembourg to clarify the legal issues.
The EU has refused to back down, although European regulators have said they will exempt incoming flights if other countries take equivalent measures to curb pollution.
