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Thursday, 31 July 2014
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Aviation: EU may exempt Chinese airlines from Emissions Trading Scheme rule PDF Print E-mail
Written by Europe Business Center International   
Tuesday, 07 June 2011 13:01

THE European Union has told Chinese airlines they can win an exemption from the EU's carbon market if they follow Europe's lead in cutting greenhouse gas emissions from aviation, according to a letter seen by Reuters yesterday.

From January 1 next year, the EU will require all airlines flying to Europe to be included in the Emissions Trading Scheme, a system that forces polluters to buy permits for each ton of carbon dioxide they emit above a certain cap.

But China's aviation authority opposes the measure, saying it will cost Chinese airlines 800 million yuan (US$123 million) in the first year and more than triple that by 2020.

China says that Europe should adjust the ETS to reflect the differences between rich and poor countries.

The issue has angered many airlines fearing higher costs and raising the specter of a trade fight. The EU scheme covers aircraft emissions from the point of departure, a particular concern for non-EU long-haul carriers.

Many airlines prefer a global emissions market for aviation, rather than a fragmented system.

The row over inclusion of aviation emissions in the EU scheme is a major focus of the annual meeting of the International Air Transport Association in Singapore, which started yesterday and ends tomorrow. IATA is the aviation sector's main trade body.

The European Commission, which manages the ETS, wrote a letter to the China Air Transport Association last week offering a solution - using provisions in the ETS rules to exempt airlines of any country that can prove it is taking equivalent steps to cut emissions from aviation.

"The legislation contains provisions which enables the removal of all arriving flights from the EU ETS in the event the third countries implement measures of their own to limit the climate change impact of these flights," said the letter to CATA, sent on May 31.

"The commission is open to discussing further measures that are being developed to limit the climate impact of international flights departing China, with a view to these measures being considered equivalent."

American airlines also oppose inclusion in the ETS, but some of Europe's biggest airlines say the move is preferable to leaving carriers out, which would make them vulnerable to different environmental taxes from national governments.

The Air Transport Association of America is challenging the move in EU courts.

Last Updated on Tuesday, 07 June 2011 14:04