Primary Sovereign Rights or Secondary Environmental Duties? Critical International Law Issues Raised by the Extraterritorial Application of the EU Emission Trading System in the Aviation Sector

Based on Directive 2003/87, starting in 2005, the total emissions of EU' industry sectors covered by the EU Emission Trading System (ETS) have been capped. As a result, at the end of defined compliance cycles, companies need to surrender allowances matching their emissions (EC 2003). EU Directive 200811 0 1 expanded the EU ETS to the aviation sector (EC 2008). Based on GHGs emitted in relation to passenger miles, airline companies must now obtain permits to emit GHGs and surrender allowances. The extension is justified by the fact that aviation has an impact on climate change that might 'significantly undermine' reduction efforts accomplished in other economic sectors (EC 2008: Principle II). This approach entails that, as of 2012, the number of allowances necessary for each flight to or from the EU must take into account its entire route, so that a flight from San Francisco to Paris compels airlines to surrender allowances, including the route over US territory and the high seas, as well as over Portugal, Spain and France.