Constitutional Court case
The EU Aviation Emissions Trading Scheme Directive (2008/101/EC) amends the EU Emissions Trading Scheme Directive (2003/87/EC) to include aviation activities in the scheme for greenhouse gas emission allowance trading within the European Union. The earlier directive established a scheme for allowance trading in order to promote cost-effective and economically efficient reductions in emissions. According to the directive (as amended), aircraft operators must compensate for greenhouse gas emissions from all flights that land at or take off from an airport in the European Union, using a system of allowances. Under Article 3(a), an 'allowance' is defined as permission to emit one tonne of carbon dioxide equivalent.
From January 1 2013, 15% of all allowances will be auctioned, with the remaining 85% being freely allocated to aircraft operators. For 2012 the total allowances allocated to aircraft operators by either method may not exceed 97% of the operator's historical aviation emissions.(1) From January 1 2013 this limit will fall to 95%.
In order to minimise the administrative burden on aircraft operators, the directive provides that only one EU member state will be responsible for each aircraft operator. If an operator has been allocated a licence under EU Regulation 2027/92 (now replaced by EU Regulation 1008/2008), the member state that granted the licence is responsible for aviation emissions purposes; otherwise, the member state responsible is that with the greatest estimated quantity of attributed aviation emissions from flights by the operator in the base year.(2)
Belgium was required to implement the directive before February 2 2010.
In Belgium, the procedure for implementing directives depends on whether the matter falls within federal, regional or community competence. It was unclear whether the subject of the new directive was a federal or a regional matter.
On many aviation-related issues the federal state and the regions have overlapping claims to competence, which gives rise to misleading interpretations. For example, actions occurring in Belgian airspace fall within federal competence, whereas noise management at airports and other matters relating to environmental protection, including air quality, are regional issues.(3)
The Flemish region considered the directive to be a regional matter, as it concerns environmental protection. On May 8 2009 it adopted a decree, amending the original decree of April 2 2004, to implement the directive within the region. Article 20bis of the amended decree provides that in the case of aircraft operators for which Belgium has competence, the competent region is that to which the most greenhouse gas emissions have been attributed. For the purposes of the decree, greenhouse gas emissions are deemed to be attributed to the Flemish region when a flight:
- departs from an airport in the region; or
- lands at an airport in the region, having departed from an airport outside the European Union.
Unlike the Flemish region, the Brussels region considered that the regions did not have competence and that the directive should be implemented by the federal authorities. This gave rise to challenge before the Constitutional Court.
Constitutional Court case
The Brussels region brought an action before the court, claiming that the Flemish decree was illegal. Its two main arguments were that:
- the decree dealt with matters which properly fell within federal competence - namely, "activities taking place in [Belgian] airspace" and "air traffic"; and
- the decree was illegal, as it had been adopted without the cooperation of the federal state and the other regions.
The Flemish region maintained that the directive should be implemented regionally, as it concerned matters relating to environmental protection.
The court rendered its decision on March 2 2011, confirming the competence of the regions to implement the directive for the reason advanced by the Flemish region.
The court held that in the context of regional authority, the term 'environmental protection' must be interpreted broadly; it held that this includes the power to adopt measures in order to reduce airborne greenhouse gas emissions. However, the court pointed out that regions can adopt such measures only if this does not exceed their territorial competence. Thus, the Flemish region is competent to adopt measures regarding the reduction of greenhouse gas emissions only insofar as these emissions can be located in the territory of the Flemish region.
The court concluded that the greenhouse gas emissions could not be located in this way. Due to the region's small size, flights landing in or departing from the territory principally generate greenhouse gas emissions elsewhere - in the territory of the other Belgian regions, in the airspace above Belgian territorial waters and within the territory of other (member and non-member) states.
Therefore, the constitutional court concluded that the criteria used to determine the Flemish region's competence in Article 20bis were inappropriate. Moreover, it held the provisions of the decree to be inseparable, meaning that the entire decree would have to be annulled.
The court decided that federal and regional competencies are so closely linked on this point that the federal and regional authorities must enter into a cooperation agreement to implement the directive. In order to avoid legal uncertainties arising from the revocation of the decree, and in order to enable Belgium to observe its European obligations, the court decided that the effects of the revoked decree should remain unchanged until a federal and regional cooperation agreement enters into force. The authorities have until December 31 2011 to reach agreement.
For further information on this topic please contact Pierre Frühling at Field Fisher Waterhouse LLP by telephone (+32 2 732 14 05), fax (+32 2 732 14 15) or email ([email protected]).
(1) The term 'historical aviation emissions' refers to the mean average of the annual emissions in the calendar years 2004, 2005 and 2006 from aircraft performing an aviation activity which is subject to the directive.
(2) In this context, the term 'base year' means the calendar year starting from January 1 2006 or, for aircraft operators which started their operations after this date, the first calendar year of operations.