EU Vows to Keep Airline-Emission Levies as China-India Opposition Mounts
The European Union will press ahead with emissions levies for international airlines, putting the bloc on course for a trade spat with countries including China, India and the U.S.
“The EU will not suspend the legislation,” Siim Kallas, the European Commission’s vice president for transport, said today in Singapore at an airline conference. “It’s a very high- profile environmental issue.”
At least 27 countries are due to meet next week in Moscow to discuss laying new charges on European airlines as they protest the EU’s addition of aviation to a carbon-emissions trading system last month. The governments say the move extends EU regulations beyond the bloc’s border.
“What started out as a solution for environment has become a source of potential trade conflict,” Tom Enders, chief executive officer of Airbus SAS, said in Singapore today. “That should be a worry for all of us.”
China and India have already asked airlines to rebuff mandatory requests from the EU for data needed to fix emissions payments. Carriers will have to hand over permits for 2012 carbon production by April 30, 2013. They will receive about 85 percent for free and will need to buy the rest in the market.
IATA Appeal
The International Air Transport Association, the main global trade body for airlines, has called on the EU to halt the emissions cap while a global system is developed. The EU has said that carriers can be exempted for its carbon system if their home government introduces a similar program.
Chinese airlines are in an “intolerable” position because of the spat between the country and the EU over the levies, Tony Tyler, the head of IATA, said yesterday in a Bloomberg TV interview. The industry needs a solution to the impasse, he said.
Last week, China barred carriers from taking part in the EU emissions-trading system because of concerns it will raise costs and impinge on non-European governments’ sovereignty. The China Air Transport Association asked its government to oppose the EU levies and it is working on a legal challenge to be filed in Germany, Vice President Chai Haibo said Feb. 6.
Voicing Objections
“They are sovereign countries and have the right to voice any objections they have,” said Qatar Airways Ltd. Chief Executive Officer Akbar Al Baker. “Qatar Airways is abiding by the rule, but we’re not happy.”
China hopes to reach an “acceptable solution” and will consider “appropriate responses,” Foreign Ministry spokesman Liu Weimin said Feb. 7.
The EU added flights to its cap-and-trade carbon program on Jan. 1. Under the system, which is designed to pare pollution, airlines must monitor and report their emissions on all flights into and out of Europe each year, and purchase carbon permits to cover these discharges.
Carriers will be given about 85 percent of their permits free of charge in 2012. One permit is equivalent to one metric ton of carbon dioxide.
“The issue here is that the EU is charging based on the whole journey and whether they should be imposing anything out of the European airspace,” said Goh Choon Phong, chief executive officer of Singapore Airlines Ltd. (SIA) “The whole principle doesn’t make sense.”
To contact the reporter on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net
To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net
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