European Union officials said recently they will negotiate with international partners angry at what they see as a climate tax on airlines, but refused to change the hotly disputed Emissions Trading Scheme (ETS). “We have always been open to continuing discussions on the possibility of equivalent measures” outside Europe, Isaac Valero, spokesman for European Union climate action commissioner Connie Hedegaard, told AFP. “This way we hope to reach a global agreement,” he said, referring to a longstanding failure to bring industrialised and emerging powers onto the same page over environmental objectives for big industry. “But awaiting this global agreement, we are not going to change our legislation,” he underlined. The international community responds While a group of nearly 29 countries met in Moscow in February, with 25 signing the Moscow Declaration detailing potential punitive actions against the EU, at least two countries have come out strongly against the scheme by barring their domiciled carriers from participating in the ETS.
The US is in the process of enacting legislation making it illegal for its carriers to participate, while China has banned its carriers from taking part without its consent and similarly India is poised to ask its carriers not to take part as well. If the European Commission retaliates by suspending Indian airlines from flying to Europe, India would make similar moves and consider charging an “unreasonable” amount for flying over India, said an unnamed senior government official according to Indian media reports. “We have lots of measures to take if the EU does not go back on its demands. We have the power of the economy; we are not bleeding as they are,” the unidentified government official was quoted as saying. China, meanwhile has said it will continue to push the EU to axe the scheme, but said it was not planning to take retaliatory measures, according to Li Jiaxiang, chief of China’s Civil Aviation Administration. Li said the plan would raise annual costs for China’s airlines by 800 million yuan ($127 million) initially, before rising to three billion yuan by 2020 and 18 billion yuan by 2030. “We are taking positive measures of talking via the International Civil Aviation Organisation and other bodies to promote cooperation and reconciliation,” he added. “We appreciate the EU’s intention to protect the environment, but measures must be reasonable and acceptable for other countries,” Li said.
ICAO holds to 2012 schedule There is however, virtually unanimous agreement from industry and the international community that the United Nations body for aviation is the correct forum and regulatory body for coming to a global consensus on the issue. Facing criticism that it isn’t moving fast enough, the Montreal-based International Civil Aviation Organisation (ICAO) has re-stated the end-2012 deadline to have a proposal on measures to address emissions from aviation.
“I read the press like anyone. I listen to the criticisms which have been stated about the pace,” secretary general Raymond Benjamin said. But ICAO is an international organisation with a membership of 191 countries and needs a consensus, he added.
The steadfast support for the ETS by the European Union has forced ICAO to accelerate its hunt for “market-based measures” that could be an alternative to the EU proposals. An ICAO spokesman said in December that the basic options under consideration are some form of emissions trading, fuel-based carbon levies, levies on departing passengers and cargo and carbon offsetting. Two of those four are believed to be still on the table, with a decision expected by end 2012, some four-six months after EU member invoicing of airlines begins.
Airbus sales blocked by China But already ‘unofficial’ sanctions are beginning to be meted out to European companies with the Chinese government suspected of blocking sales of Airbus aircraft to Chinese airlines. The aircraft maker is set to suffer significant lost business if the European Commission (EC) fails to backdown, Louis Gallois, the chief executive of parent company European Aeronautic Defence & Space Co. NV (EADS), said recently.
“The Chinese government is putting on hold approval” for 35 wide-bodied Airbus aircraft ordered by Chinese airlines, Gallois told a analysts in a conference call on EADS’ 2011 results. “We are worried that this conflict is becoming a commercial war…and that there is a risk that Airbus will be taken hostage,” according to a Dow Jones report.
“We’re asking the EU to take into account the global opposition of almost every country outside Europe against this scheme,” he added, and the only equitable solution is a worldwide agreement under the aegis of the Montreal-based ICAO. Since that incident Airbus and six European airlines have written asking the leaders of Britain, France, Germany and Spain to back down from the plan. They say the scheme will jeopardise more than 1,000 Airbus jobs and another 1,000 in the supply chain and it will result in “suspensions, cancellations, and punitive actions” by other countries.
Companies signing the letter were British Airways PLC, Virgin Atlantic Airways Ltd., Lufthansa AG, Air France- KLM, Air Berlin PLC & Co., Iberia Airlines, as well as aerospace engine makers Safran of France and MTU Aero Engines of Germany, which said the standoff “is becoming intolerable for the European aviation industry.” “We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions,” they wrote.
