Trade war in European skies looms: US and China v European

Airbus chief and IATA both warn of air trade war over  EU-ETS

Tom Enders, Airbus chief executive, has joined with Virgin to support  IATA’s comments telling the EU climate commissioner, Connie Hedegaard, that “it is madness to risk retaliation”.

The support is the latest in a war of words as European climate commissioner Connie Hedegaard refused to back down over EU plans to make all airlines flying through Europe buy permits for carbon emissions above a certain level from next year.

But IATA director general Giovanni Bisignani told Reuters: “She would do well to listen to the growing chorus of countries strongly opposed to an illegal extraterritorial scheme.

“The last thing that we want to see is a trade war. Chinese delegates were in Brussels recently; many other countries have formally expressed concerns.”

China has reportedly threatened retaliation against European airlines and aircraft manufacturer maker Airbus if the EU goes ahead with its plans.

“We have to absolutely avoid retaliation because the risk of retaliation for a Europe that is in survival mode would be the kiss of the death,” Bisignani said.“Particularly during these times of austerity, it is madness to risk retaliation against a €275bn industry which supports a massive 4.5m jobs.”

“I hope that, once Europe starts receiving this kind of strong message, they would understand that you cannot go on with an illegal scheme. This is illegal,” he added.The scheme was the latest in a series of flawed moves, claimed Bisignani. This will simply be Copenhagen 2,”

But Ms Hedegaard, who is leading Europe’s boldest move yet to make the rest of the world abide by its climate rules, said it would set a worrying precedent if Brussels caved in to China’s threats.

“It is up to the Europeans to decide European legislation. Where would we be if every time we did some kind of legislation in Europe and the Chinese didn’t like it, what then, then we just change it? I believe this would just be the beginning.

“If they are testing us now we should take care not to get nervous,” she said. “We did not do this out of the blue, but with the backing of the European Parliament, member states and the former Commission.”

US airlines have been fighting EU plans in a legal challenge before the European Court of Justice, but last month it emerged that Chinese aviation officials were also lobbying against the move.

Ms Hedegaard said officials from Beijing and Brussels were discussing whether China met a clause in the European rules that partially exempts airlines from countries with equivalent carbon emission measures. China recently announced plans to curb aviation emissions, she said, and “we are trying to get more information about what does it exactly imply”.

France’s environment minister, Nathalie Kosciusko-Morizet, has written separately to EU transport commissioner, Siim Kallas, asking how Brussels planned to deal with this international resistance.
Ms Hedegaard said: “I would just remind the members that they, including France, backed this legislation.”

Aviation is estimated to be responsible for up to 5 per cent of man-made green house gas emissions  including vapour trails and radiative forcing (the effect of emissions at high altitude) worldwide, though this figure is expected to rise sharply in coming years.

Hedegaard told Reuters in Brussels earlier that the EU should not back down to trade threats and had agreed on the legislation which comes into effect on January 1, 2012.

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