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Climate Litigation: Key Risks and Liabilities for Aviation Companies23 January 2025

The decision in Verein KlimaSeniorinnen Schweiz and Others v Switzerland has set a precedent requiring Convention states to assess the effectiveness of their legislative regimes to protect individuals who are most vulnerable to the effects of climate change. Whilst this is a finding against states, they are likely to seek to comply with their own obligations under international law by introducing new domestic laws and regulations affecting businesses at home.

WHAT IS THIS LIKELY TO MEAN FOR THE AVIATION INDUSTRY?

Whilst for a number of industries already considered in this series (including oil and gas and mining) the decision may mean increased scrutiny, the aviation industry has already faced significant scrutiny for a number of years. The cases outlined below demonstrate a continuum of regulatory uncertainty and challenges for both airlines and supporting industries which both pre- and post-date the climate activism seen in Verein KlimaSeniorinnen.

The significant limitations on the GHG mitigation measures available to the industry have led to a situation where business growth will almost certainly result in increased emissions until those limitations can be overcome. How companies within the industry (particularly airlines) have sought to deal with climate risks whilst still operating a profitable and growing business has attracted significant attention and scrutiny from the public, NGOs and regulators, resulting in increased climate litigation against the aviation sector.

"Although not decisive, the acknowledgement in Verein KlimaSeniorinnen that states have a duty to take active steps to limit the effects of climate change may provide some further impetus for governments to better assist the industry to achieve transition in practice."

Although not so well publicised as the cases challenging airlines, there are also several national and international schemes designed to support the aviation industry transition towards net zero.  As discussed below, however, these schemes are not yet fully supported by national law, policy and regulation. Although not decisive, the acknowledgement in Verein KlimaSeniorinnen that states have a duty to take active steps to limit the effects of climate change may provide some further impetus for governments to better assist the industry to achieve transition in practice.

THE LIMITATIONS OF EXISTING MEASURES

The aviation sector’s increasing use of sustainable aviation fuel (“SAF”), amongst other new technology, represents a positive step in reducing the industry’s carbon emissions. However, unlike the wide availability of renewable resources and other lower carbon alternatives for the broader energy sector, which are unconstrained by factors such as weight and particularly stringent safety requirements applicable to airlines, SAF has not reached a point of development where it can viably be adopted by airlines as an alternative source of fuel on a widespread and regular basis. It is expensive to produce and production is currently very limited. In 2024, global SAF production is expected to triple from 2023, but will still only account for 0.53% of the aviation industry’s fuel needs.¹

Similar limitations are also found when considering the availability of offsets. The ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”) reached a milestone earlier in 2024 when Guyana made the world’s first Paris Agreement Adjustment for ART-Issued² TREES³ carbon credits, making them the first credits eligible for use by airlines towards targets in the first phase of CORSIA. Despite this, the supply of CORSIA credits is still far below estimated needs of airlines to meet their compliance requirements in the first phase of CORSIA.

GOVERNMENT POLICY

Governments have sought to implement policies to encourage more sustainable growth within the aviation industry. This has been evident, for example, in the UK’s JetZero strategy and SAF adoption mandates set in the EU and the UK. However, it is unclear whether these government mandates will be achievable without significant further support for the sector.

Nonetheless, the industry continues to grow in line with increased demand and this has contributed to the ongoing public pressure in the form of litigation, not only directed at airlines, but also towards governmental departments and policymakers. In 2022, two cases were brought against the UK Secretary of State for Transport. The first claim, brought by GALBA (Group for Action on Leeds Bradford Airport) challenged the UK government’s approval of an airport expansion to increase passenger capacity, arguing this would lead to increased aviation emissions which they claimed was incompatible with the UK’s goal of reducing carbon outputs under its JetZero strategy. The other claim, brought by Possible (a climate charity), challenged the UK’s broader aviation policy, arguing that aviation planning should not prioritise aviation growth at the expense of environmental protections and that without changes to existing policies, the UK risks overshooting its carbon budget. These cases are set to proceed to a joint hearing soon.

Although the above cases pre-date Verein KlimaSeniorinnen Schweiz and Others v Switzerland, they are indicative of an increasingly uncertain regulatory environment where government support for growth of the industry and government efforts to meet climate-related obligations are still subject to challenge by judicial review. This is reflective of the fact that government support alone may not be sufficient to grant airlines a ‘social license to operate’.

REGULATORY ENVIRONMENT

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"Pressure from courts and regulators mean that airlines must protect against greenwashing claims by making sure that ambitions are portrayed in a sufficiently clear and substantiated manner and to accurately represent the limitations of SAF and offsets."

There appears to be a push for airlines to be more proactive in their approach to mitigating the impacts of the industry on the climate to maintain the ‘social license to operate’. However, pressure from courts and regulators mean that airlines must protect against greenwashing claims by making sure that ambitions are portrayed in a sufficiently clear and substantiated manner and to accurately represent the limitations of SAF and offsets.

In 2023, the UK’s Advertising Standards Authority (“ASA”) made five rulings against airlines including Lufthansa, Etihad Airways and Air France. In all five rulings the relevant advertisements were found to have breached the UK CAP Code’s requirement that absolute environmental claims be supported by a high level of substantiation. In one ruling the ASA found that Lufthansa’s claim that it was “…Connecting the world. Protecting its future” was exaggerated as the airline’s initiatives and targets were aimed at delivering results “only years or decades into the future“. Similarly, the ASA ruled that Etihad’s claim that it was taking a “louder, bolder approach to sustainable aviation” was not “adequately substantiated” by any of the “initiatives or commercially viable technologies in operation within the aviation industry“. The ASA made two further rulings against airlines (Wizz Air and Virgin Atlantic) in 2024, indicating its continued pursuit of misleading advertising in the aviation industry.

Similarly, in March 2024, the District Court of Amsterdam’s decision in FossielVrij NL v KLM criticised KLM’s advertising for creating a false impression “that flying with KLM is sustainable”. Like the ASA, it also criticised KLM for advertising uncertain and non-specific future ideals of sustainability, overstating the extent to which current available measures can reduce carbon emissions.

The limitations of mitigation measures have set back many aviation companies’ emission reduction goals that were originally predicated on the assumption that SAF would be more readily available. The prevalent and increasing threat of greenwashing claims has led companies to withdraw ambitious targets to be more achievable in an uncertain environment. We explored this in an earlier article this year with respect to Air New Zealand.

Whilst proactive steps are encouraged, companies should be careful in how they choose to market their climate ambitions and the potential impacts of SAF and offsets. Courts and regulators have shown a willingness to scrutinise ‘green’ marketing claims closely, reinforcing the importance of transparency and accountability in environmental messaging within the aviation industry.

WHAT DOES THE FUTURE HOLD FOR THE AVIATION SECTOR?

Whilst it may be seen more as a continuation of pressure put on the industry, rather than an entirely new phenomenon, climate change litigation directly affecting the aviation sector is on the rise and is proving disruptive to existing business practices across the industry. There is increased pressure for corporates to take greater responsibility and to go beyond state-mandated action, even in circumstances where necessary investment in key enablers such as SAF and CORSIA credits is lacking. As a result, airlines could, and already do, see themselves caught up in the supply/demand gap.

"Cases against governments, such as Verein KlimaSeniorinnen may also further underline the need for states to proactively support airlines’ transition toward net zero."

The aviation industry may therefore need to consider a more proactive approach to (i) enabling investment in key climate mitigation strategies, notwithstanding the uncertain regulatory environment; and (ii) ensuring that any assertions made are fully substantiated and verifiable. Going forward, aviation companies will likely need to undertake a dual analysis, considering both how actions will align with government policies and state-based schemes (which are largely supportive of the industry, although arguably do not currently go far enough), as well as wider legal duties and reputational risks which, as seen above, have in some cases been used to criticise the industry. Cases against governments, such as Verein KlimaSeniorinnen may also further underline the need for states to proactively support airlines’ transition toward net zero. In acknowledging aviation’s place in securing continued economic growth, there is a need for governments to facilitate both improved access to funding for continued development of new technologies and the scaling-up of SAF and CORSIA credit availability.

Contact the authors to learn more about regulator and NGO activity in this space and strategies for navigating the complex legal and reputational risk landscape.

[1] https://www.iata.org/en/pressroom/2023-releases/2023-12-06-02/
[2] The Architecture for REDD+ Transactions (ART).
[3] The REDD+ Environmental Excellence Standard (TREES) – the standard developed by ART to quantify, monitor, report and verify GHG emission reductions and removals.

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Trainee Lorraine Mintah also contributed to this article.

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