US airlines in court against EU 'right' to carbon tax over high seas

American, United and Continental airlines along with the Air Transport Association of America have gone to the European Court of Justice in the United Kingdom to challenge Europe's belief that it can legally impose a carbon tax under its Emissions Trading System (ETS) on airlines flying over the high seas and in and out of Europe.

China, though objecting, has threatened not to buy Airbus jets if its airlines are included in the ETS. The European Union said last month it was examining the emissions-cutting measures China had proposed to see if it amounted to an ETS exemption.

As per the new rule, airlines will be covered from January. Under the scheme, the airlines will get 85% of their emissions certificates for free and buy the rest at auction. Airlines would become the second-largest sector in the system, after power plants.