China threatens trade war over EU emissions scheme
07.06.11
The EU's plans to include international airlines in its emissions trading scheme (ETS) could spark a trade war after China has made it clear at the IATA meeting in Singapore yesterday that it is unhappy about having to be subject to the ETS and could impose high taxes on European airlines or stop access to certain routes in retaliation.
Chai Haibo, deputy secretary-general of the China Air Transport Association (CATA), told China Daily that the EU plan to unilaterally force countries into the Emissions Trading Scheme (ETS) is ‘radically unreasonable’, and his association is not going to join it or apply for an exemption. He said CATA stands behind airlines taking legal action against the ETS and will follow the lead of US carriers taking a case to the European court of justice next month.
The EU will require all airlines flying to Europe from Jan 1 to be included in the ETS, a system that compels polluters to buy permits for each ton of carbon dioxide they emit above a certain cap. Those who do not join the system will face punishment including fines and flight suspensions.
If Chinese airlines agreed to participate in the plan they would have to pay about 800 million yuan ($123 million) to the EU in 2012 and face a bill of more than 3 billion yuan in 2020. The total amount over the next nine years is estimated to reach 17.6 billion yuan, according to the industry's calculations.
Willie Walsh, chief executive of BA parent group International Airlines Group, urged the EU to delay the inclusion of all foreign airlines in the ETS and find a compromise, saying that if the likes of China, Russia and the US were forced to pay up, there would be retribution. He said: ‘It is clear that the countries are going to retaliate, whether in the form of imposing additional taxes on European airlines or restricting access to markets.'
‘The uncertainty will add more cost. It will add more concern in the mind of travellers that they will face disruption to services and I think there is a real risk this could happen.’ He called for a ‘Plan B’ that would charge airlines for regional and domestic flights within Europe only.
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