The European Court of Justice today ruled that the European Union's plan to impose emissions caps on international airlines is not in conflict with international law.

In reaching its conclusion, which was expected, the court followed the reasoning of an advisory opinion issued in October by the advocate general, an independent member of the court (Greenwire, Oct. 6).

In the judgment, the 13-judge court rejected the arguments made by the Air Transport Association of America (ATA), which recently changed its name to Airlines for America.

The E.U. plan, known as the Emissions Trading System (ETS), is due to include airlines starting on Jan. 1, 2012. All airlines landing or taking off anywhere in the European Union will be affected.

Aviation carbon emissions will initially be capped at 97 percent of the 2004-2006 levels. To begin with, airlines will have to buy only 15 percent of their emissions certificates at auction.

The U.S. carriers challenged the program in the High Court in London, which then asked the European high court to take up the issue.

The principal focus was that the requirements apply to emissions from the entire flight, not just the portion that occurs within E.U. airspace. That constituted a violation of "customary international law," the airlines said.

In today's ruling, the court said the only obligation being imposed upon airlines was to report their emissions when an aircraft lands at an E.U. airport.

Aircraft on the high seas or within the airspace of other countries are not subject to ETS. It is only when they land in the European Union that they come under European jurisdiction, the judges noted.

When the airlines are operating flights to Europe, the European Union has the authority to impose conditions on airlines, including those "designed to fulfil the environmental protection objectives which it has set for itself," the court said.

Addressing another question raised by the airlines, the court rejected the suggestion that only the International Civil Aviation Organization (ICAO), a U.N. agency that handles global aviation matters, had the authority to tackle airline emissions.

The airlines also failed on their argument that the European Union breached provisions of the Chicago Convention, the 1944 agreement that established the ICAO, and the 2007 bilateral accord between the European Union and the United States -- known as the Open Skies Agreement -- that loosened restrictions on where airlines could fly.

The European Union is not bound by the Chicago Convention because the individual member states signed up to it separately, before the European Union even existed, the judges ruled.

The high court's ruling will now be referred back to the court in London, which will issue a final ruling in due course.

Mark Bisset, a London-based aviation lawyer at the Clyde & Co. law firm, said the ruling contained "no surprises" inasmuch as it followed the advocate general's approach. The court generally gives the advocate general's views considerable weight, legal experts say.

There might still be more litigation to come. Airlines from other countries with bilateral agreements with the European Union could seek court review, Bisset said. Several Chinese airlines have already indicated they may file suit.

In a statement, Airlines for America said the decision "further isolates the E.U. from the rest of the world" and could be a hindrance to "concerted global action on aviation and climate change."

Various environmental groups, including the Environmental Defense Fund, that intervened in the case in support of the trading scheme welcomed the ruling.

The decision "makes clear Europe's innovative law to reduce emissions from international flights is fully consistent with international law, does not infringe on the sovereignty of other nations, and is distinct from the charges and taxes subject to treaty limitations," the groups said in a statement.

Likewise, the E.U. commissioner for climate action, Connie Hedegaard, said she was "very satisfied" with the decision but stressed that the European Union still wants "to engage constructively with everyone during the implementation of our legislation."

The decision has diplomatic repercussions, especially as Congress is considering legislation that would prevent U.S. airlines from participating in the program. The House has already approved a bill along those lines, and a Senate version was recently introduced (ClimateWire, Dec. 21).

The U.S. government has also said it is opposed to the program, leading most to conclude that the court ruling will not be the end of the struggle (ClimateWire, Dec. 9).

In a Dec. 16 letter to European officials, Secretary of State Hillary Rodham Clinton and Transportation Secretary Ray LaHood wrote that while the Obama administration is "fully committed to addressing global climate change," the E.U. scheme "is the wrong way to achieve our shared objective of addressing emissions from international aviation."

The United States "will be compelled to take appropriate action" if the plan is not stopped or at least delayed, Clinton and LaHood warned.

Click here to read the court's judgment in full.

Reporter Jason Plautz contributed.