EU COURT RULES THAT CARBON TAX ON SWISS FLIGHTS IS LEGAL

07/25/2016

Advocate General Henrik Saugmandsgaard Oe upheld the European Union’s right to apply carbon taxes to flights to and from Switzerland. Under the EU Emissions Trading System (ETS), all airlines within the European Economic Area (EEA) are subject to certain carbon allowances and purchasing schemes. Lufthansa-owned Swiss Air brought a case to the European Court of Justice claiming unfair and unequal treatment through the application of carbon taxes and permits to its flights. Swiss Air is seeking recovery of over 600,000 carbon permits, worth millions of euros. Switzerland is not a member of the EEA and thus Swiss Air claims to be “peculiarly badly affected” by the rule. However, Advocate General Oe’s published legal opinion stated that the EU’s “principle of equal treatment simply does not apply to the treatment that the EU accords to various third countries." Nevertheless, Switzerland is the only country outside the EEA to which the EU Aviation ETS currently applies. The country remains a close trading partner with the EU and is continuing talks to join the EU ETS system in the future. For the full story, see http://uk.reuters.com/article/us-eu-carbon-court-swiss-idUKKCN0ZZ1M3