EU court backs airline emissions cap

"The inclusion in the EU emissions trading scheme of flights of all airlines from and to European airports is compatible with the principle of fair and equal opportunity laid down in the Open Skies Agreement," the advocate general said.

"Indeed, it is precisely that inclusion that establishes equality of opportunity in competition, as airlines holding the nationality of a [country beyond the EU] would otherwise obtain an unjustified competitive advantage over their European competitors if the EU legislature had excluded them from the EU emissions trading scheme," it added.

Under the scheme, airlines would get 85 percent of their permits for free, while the remaining 15 percent has to be auctioned on the market. The measure applies to all airlines flying over or in and out the European airspace, causing outrage amongst non-EU companies.

A group of US and Canadian-based airlines challenged the EU rules in a British court, as each EU government has to implement them by January 2012. The tribunal in the UK turned to the ECJ for advice, with the legal opinion being the first step before a final verdict expected next year.

"I am glad to see that the advocate general's opinion concludes that the EU directive is fully compatible with international law. The EU reaffirms its wish to engage constructively with third countries during the implementation of this legislation," said climate commissioner Connie Hedegaard.

But the International Air Transport Association (Iata) said it was "disappointed" at the court's opinion.

"We support and need positive economic measures as part of our strategy to manage aviation’s emissions. Emissions trading is one possibility. But it must be a global scheme under the leadership of International Civil Aviation Organisation," said Tony Tyler, Iata's director general.