Swiss International Airlines AG, R (on the application of) v Secretary of State for Climate Change and Energy & Anor

The European Union principle of equal treatment does not require equal treatment of all third countries in the conduct of the Union’s external relations. That exclusion covers measures suspending an emissions-trading scheme for some third countries as part of an attempt to secure a global framework for reducing aviation emissions. No automatic legal link between external action and resulting discrimination is required. Alternatively, where the Union legislature balances the objective of securing an international agreement against the objective of maintaining environmental integrity, its choice falls within a broad margin of political discretion unless the distinction is manifestly unjustified.

Swiss International Airlines AG sought renewed permission to challenge the Greenhouse Gas Emissions Trading Scheme (Amendment) Regulations 2013 and to obtain a reference to the Court of Justice of the European Union. The regulations implemented Decision 377/2013/EU, which suspended emissions-allowance obligations for flights between the EEA and most third countries but excluded Switzerland and other closely connected or associated countries.

Permission had been refused on paper. The issues were whether the EU principle of equal treatment applied to the Union’s external relations with third countries and, if so, whether the differential treatment was arguably unlawful.

1. Permission refused. The claim disclosed no arguable flaw in the EU decision or its domestic implementation.
2. The general principles of EU law do not oblige the Union to accord equal treatment to all third countries in its external relations. The Union’s decision to suspend emissions-trading obligations for some third countries formed part of an international strategy to promote a global aviation-emissions agreement. The principle of equal treatment therefore did not apply.
3. The authorities did not require an automatic link between formal EU action and resulting discrimination before the principle was excluded. Balkan-Import-Export was understood as stating the general rule. Faust v Commission was treated as confirming that different treatment of third countries, and discrimination resulting automatically from it among EU traders, was compatible with Community law.
4. Alternatively, the distinction was within the broad margin of political discretion available to the EU legislature. The recitals showed a rational balance between encouraging international agreement and preserving the environmental integrity and emissions-reduction objectives of Directive 2003/87/EC. The exclusion of EFTA and closely connected countries was not arguably unlawful.
5. The claim was accordingly refused at the permission stage. No reference to the Court of Justice was made.

The judgment records that permission to apply for judicial review had previously been refused on the papers. This court refused the renewed application.