The EU recently enacted an emissions trading scheme to assist Member States in meeting their reduction target levels under the Kyoto Protocol. The ICAO is an organization created under the Convention on International Civil Aviation to oversee international flight regulations and procedures. European Council have an idea that bringing aviation emissions into the EU Emissions Trading Scheme is a cost-effective solution that is good for the environment and treats all airlines equally. Domestic aviation does not pose a problem, as it is included under the Protocol and can be included in the target emission levels for each country. Although there is not a direct charge placed on airlines, the stringent requirements under the EU ETS would require that airlines pay a “charge” to emit carbon when flying into those airports, and any airlines that do not comply could possibly lose their contract at those airports. The Convention, However, states that no charges shall be imposed by any contracting State in respect solely of the right of transit over or entry into or exit from its territory. Therefore, under the Chicago Convention, the EU must first seek approval from the ICAO before implementing this charge.
Additionally, the Convention requires that all countries make an effort to secure “the highest practicable degree of uniformity in regulations, standards, procedures, and organization” for “all matters in which such uniformity will facilitate and improve air navigation.” The ICAO is in charge of adopting and amending new procedures periodically. The proposal to include aviation in the EU ETS is a new regulation specific to the European Union, and is not collaborative of securing the uniformity which the Convention explicitly requires. Article 37 is an important provision in the Convention, because it sets all contracting states subject to the authority of one overseeing organization. By implementing this proposal, the EU is placing foreign airlines under their authority, which the Convention is not amenable to.
Furthermore, the Protocol specifically states that the ICAO has the responsibility of reducing emissions from international flights. The Protocol states that “reduction of emissions from aviation” shall be achieved by “working through the International Civil Aviation Organization. The ICAO recommended an open emissions trading system for carbon emissions from international flights. An open emissions trading scheme covers all sectors in one trading scheme, one emission reduction goal to be met. Under a closed emissions trading scheme, each sector has a separate emission reduction goal to meet. The European Parliament advocated a closed trading system during the second phase of the EU ETS, while the Commission suggested an open trading system which would cover all sectors. The Commission's recommendation for an open system would have to be passed for this system to be in compliance with ICAO recommendations.