Tuesday February 14, 2012

EU won’t drop aviation carbon emission scheme

SINGAPORE: The European Union (EU) will not bow to pressure to suspend a controversial scheme to charge airlines for their carbon emissions, but is willing to be flexible in finding a solution to a row that threatens to escalate into a full-blown trade war.

The introduction on Jan 1 of the EU's Emissions Trading Scheme (ETS) has drawn howls of protest from airlines around the world, with China banning its carriers from taking part.

“If you think Europe will be forced to suspend, this is not the case. We must have a real global solution,” Europe's Transport Commissioner Siim Kallas said in an interview ahead of the Singapore Airshow.

“Europe will implement its system with difficulties, with conflicts, with court cases, whatever, the system will be introduced,” he said.

Strong opposition: A file picture shows an Air China landing at Suvarnabhumi International Airport in Bangkok. China has banned its carriers from taking part in EU’s Emissions Trading Scheme. — EPA

But Kallas acknowledged the growing opposition, particularly from China, the United States and India. Plane makers, too, said they were increasingly concerned at the potential fallout on orders unless tensions were defused.

“I am very worried about the consequences of that. What started out as a solution for the environment has become a source of potential trade conflict and that should be a worry for all of us,” Airbus chief executive officer Tom Enders told an aviation conference in Singapore.

The emissions scheme levies charges for carbon emissions from European and foreign airlines' flights in and out of Europe. Foreign governments argue the EU is exceeding its legal jurisdiction by calculating the carbon cost over the whole flight, not just Europe.

Most pollution permits will be given for free but airlines will have to pay for a portion of their carbon emissions.

No airline will face a bill until next year, after this year's carbon emissions have been calculated. Initially airlines will be handed allowances to cover 85% of their emissions. Each allowance represents a tonne of carbon pollution.

Under the scheme, airlines that do not comply may face European fines of 100 euros (US$130) for each tonne of carbon dioxide emitted for which they have not surrendered allowances. In the case of persistent offenders, the EU has the right to ban airlines from its airports. - Reuters

The European Commission said the scheme was needed to tackle growing aviation emissions as part of a global fight against climate change, but the escalating row threatened to hamper efforts to work out an international solution to Europe's sovereign debt crisis.

Chinese and EU leaders hold a summit in Beijing today, with the EU looking to China to dip into its huge foreign exchange reserves to help the eurozone tackle a debt buildup that threatens its economic stability.

Some European airlines are worried, too, that foreign governments could penalise them over the scheme.

Scandinavian air carrier SAS has said there was a risk of reprisals against EU airlines in the form of limitation to traffic rights or new taxes and charges.

The head of the airline industry's trade group International Air Transport Association (IATA) said on Sunday the impasse between China and the EU was “intolerable”, and called for the United Nations to get involved through its International Civil Aviation Organisation (ICAO) to avoid a trade war.

The ICAO has been trying to win agreement among global governments for more than a decade on a way to manage emissions from aviation, currently about 3% of mankind's greenhouse gas pollution. - Reuters

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Tuesday February 14, 2012

EU won’t drop aviation carbon emission scheme