China blocks billion-dollar Airbus order in battle against EU carbon caps

Industry say they fear trade war and urge to scrap carbon scheme: head in the sand attitude say campaigners

A Hong Kong Airlines order for 10 Airbus super jumbos worth $3.8bn at list prices was due to be formally announced at the Paris air show earlier this week, but has been blocked in protest against the EU ETS. Apparently there are more order blocks in the pipeline.

China and the United States have expressed opposition to the European Union’s move to make all airlines flying into Europe pay for their pollution.

The Chinese action may embolden other countries to rebel against the European trading scheme.
Tom Enders, Airbus chief executive, recently wrote a joint letter with European airlines including BA to the EU climate commissioner, Connie Hedegaard, to warn that it was “madness to risk retaliation” from such influential players as China and USA over the issue.

Ms Hedegaard and José Manuel Barroso, the European Commission president, have both made it clear Brussels has no intention of caving in to such threats.

To do so would set a worrying precedent, said Ms Hedegaard, because “it is up to the Europeans to decide European legislation”.

Campaigners have insisted that the initiative is vital. “The industry refuses to see the future” Said Jos Dings of Transport and Environment “That description of a unilateral tax imposed on third-country carriers perfectly fits the US international transportation tax (currently $16.30 a passenger) which applies to all international flights arriving in or departing from the US.”

“In place for at least a decade, it does not seem to have caused the “trade conflict” that Airbus predicts in its alarmist letter to the European Commission.”

“The EU-ETS, on the other hand, cannot even be described as a tax because airlines can reduce their exposure by cutting emissions. They will also get 85 per cent of their permits for free.”

“The only way of avoiding America’s tax, by the way, is not to land at an American airport.”

Said Professor Stefan Gossling: “It is a long way from green rhetorics to green action, and that it may all be easier if we just adopted a significant and annually increasing carbon tax.”

“As this is not possible – due to Chicago Convention and hence another example of the resistance of airlines to take any responsibility with regard to climate change -, nations should follow the example of the UK and introduce a duty based on distance flown.”

Until now, large polluters based in Europe such as power companies and cement factories have been covered by the emissions trading scheme the EU launched in 2005.

The scheme forces companies to pay for permits for each tonne of carbon dioxide they emit above a certain level or cap.

It was agreed several years ago, after much debate, that world airlines flying into Europe would be brought into the scheme from January 2012.

A lawsuit brought by US airlines that challenges the legality of the scheme is to be heard in the European Court of Justice on July 5.

The US administration formally expressed its concern to EU officials at an aviation meeting in Oslo earlier this week, but there was no talk of retaliation and any further move by the US is not expected until the outcome of the airlines’ court case is known.

Valere Tjolle
Valere is editor of the Sustainable Tourism Report Suite 2011, special offers HERE