EU threatens China, India over airline emissions

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The European Commission today (15 May) gave defiant Chinese and Indian airlines one month to report their carbon emissions after they failed to meet their deadline, expanding a transcontinental feud over the EU’s Emissions Trading System.

Ten air carriers from the two countries failed to report their 2011 emissions to the EU by the end of March and could face punitive actions if they do not file their reports by mid-June, said Climate Action Commissioner Connie Hedegaard.

The eight Chinese and two Indian carriers that fly to and from EU airports could face sanctions from members states if they do not meet the new deadline, Hedegaard said, though she did not specify what actions could be taken nor which airlines were in violation of the rules.

However, air industry officials have previously told EURACTIV that non-compliant airlines could be denied landing rights, although such actions would risk retaliation from two countries with growing markets for air travel.

Hedegaard said EU officials are continuing to negotiate with the two nations’ officials through the International Civil Aviation Organization (ICAO), where proposals are expected to be presented as early as next month aimed out resolving international disputes over the EU’s emission-reduction efforts.

“We are using a lot of time and energy through ICAO to find a global solutions,” the commissioner told a news conference. “We are working very hard to do that.”

The ETS, which previously applied to manufacturers and power plants, was expanded on 1 January to cover all airlines – domestic and international – operating from EU airports.

Although the law sparked an international outcry and an unsuccessful legal challenge from the US airline industry, Hedegaard said more than 1,200 emissions reports from foreign and European carriers were submitted by 31 March. The Indian and Chinese carriers were the exception.

In March, Indian officials urged airlines to defy the ETS requirements, while in February China barred its airlines from participating in the scheme without government approval.

Also in February, Airbus joined a chorus of concern that Europe’s scheme to charge airlines for carbon emissions risks triggering a full-blown trade war.

Tom Enders, Airbus chief executive, told an aviation conference ahead of the Singapore Airshow that he was increasingly concerned at the potential fall-out if tensions are not defused.

Defence of ETS

In defending the ETS, EU officials say it would encourage airlines to improve performance and replace older, less efficient aircraft with modern airliners that burn less fuel. The EU estimates that the rules eventually would cost slightly more than €2 per passenger on a transcontinental flight.

Hedegaard credited the ETS with cutting carbon emissions across the EU by more than 2%, higher than the EU’s GDP growth of 1.5% last year, according to the latest European Economic Forecast.

“This good result shows that the ETS is delivering cost-effective emissions reductions,” she said. “It also emphasised why the ETS remains the engine to drive low-carbon growth in Europe.”

A recent report by the EU statistical agency Eurostat reported that despite the European economic malaise, air traffic in the EU grew 3.4% in the latest reporting period – 2009-2010 – while traffic to the Far East and South Asia each rose 3.9%.

In an effort to tackle aviation's small but fast-growing contribution to climate change, the European Commission issued a legislative proposal in December 2006 to bring it into the EU's Emission Trading System (ETS).

This involved imposing a cap on carbon dioxide emissions for all planes arriving or departing from EU airports, while allowing airlines to buy and sell 'pollution credits' on the bloc's carbon market, and so reward low carbon-emitting aviation.

The legislation took effect on 1 January 2012. But non-EU governments and airlines have threatened legal action or trade retaliation unless they are granted exemptions. China's official aviation body, the China Air Transport Association (CATA), says that the ETS would cost its airlines $123 million in the scheme's first year, and more than triple that by 2020. The country also claims special dispensation as a developing country.

EU officials say that China has a higher GDP than Greece or Portugal and questions why its businessmen should be exempted from paying the same carbon taxes that others do.

The EU also allows ETS exemptions for governments that take equivalent measures to curb aviation emissions. But Brussels has not said what these might be. China's aviation regulator has already asked all airline carriers to cut their energy and carbon intensity by 22% by 2050.

  • June 2012: ICAO working group to report on alternative global options to ETS.
  • International Civil Aviation Organisation:Homepage

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