Seven leading European aviation companies have written to European political leaders warning about the implications of a recently introduced EU carbon tax, the Financial Times reported today (12 March).
The signatories, which include Airbus, British Airways and Virgin Atlantic, argue that the pollution levy threatens jobs 2,000 jobs and trade.
They are concerned about trade-related retaliation by countries not complying with the Emissions Trading System (ETS), the newspaper reported.
The industry executives also said they expect "suspensions, cancellations and punitive actions" by other countries to grow "as other important markets continue to oppose" extension of the ETS, according to the article, citing the letter.
According to Airbus and its airline partners in Europe, three unnamed state-owned Chinese airlines are refusing to finalise orders for 45 Airbus A330 long-haul jets worth up to €9.6 billion.
The ETS issue "started out as a discussion over environmental legislation but is turning into a trade conflict," an Airbus spokesman, cited by the newspaper, is quoted as saying.
The opposition campaign is being led by Airbus and has the support of the chief executives of British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia.
The heads of Safran of France and MTU of Germany, two big makers of aerospace engines, also signed the letters.
They believe that the proposals should be put on hold until a global plan for carbon emissions is agreed.
Letters have been sent to leaders including British Prime Minister David Cameron, German Chancellor Angela Merkel and French Prime Minister François Fillon.
The EU emissions trading system (ETS) already applies to more than 10,000 energy and industrial plants. It has applied to aviation since 1 January 2012.
Emissions from most other sectors have fallen, but those from airlines have doubled since 1990 and could triple by 2020, European Commission figures show.
The ETS allows for "equivalent measures", meaning that incoming flights to Europe would be exempt if the nation from whence they came had measures in place to offset the international emissions.
Airlines initially would be required to pay for only 15% of the carbon they emit and would be allocated free allowances to cover the other 85%.
From 2013 to 2020, airlines are expected to buy around 700 million permits, according to Thomson Reuters Point Carbon data.The initial cost - €505 million for 2012 - is expected to be minimal but would rise to an estimated €9 billion by the end of 2020.