Aviation leaders concern EU carbon tax

BEIJING - An aviation conference in Beijing on Wednesday saw leaders of the industry voice strong concern over a European Union (EU) plan to tax international airlines for carbon emissions, and an EU official signal a more flexible attitude from the bloc.

Chinese and US aviation authorities and industry associations reiterated opposition to the EU Emissions Trading Scheme (ETS) at the 2012 China Civil Aviation Development Forum, urging the EU to take a global and comprehensive approach to the issue.

Chinese airlines have not submitted the emission data required by the EU to assess the levelling of carbon fees and will not do so, Li Jiaxiang, head of the Civil Aviation Administration of China, told reporters at the event, taking place on Wednesday and Thursday.

Instead of relying on the economic means of imposing fines, the aviation industry should take comprehensive measures like improving operation, management and technologies to reduce emissions, according to Li.

He added that a regional policy applied to a global industry should be compatible with the world's socioeconomic development, saying the EU's scheme does not facilitate but rather constrains the development of the global aviation industry.

Susan Kurland, assistant secretary of the US Department of Transportation, urged the EU to halt applying the ETS to non-EU airlines and re-engage with other countries in finding a solution under the International Civil Aviation Organization (ICAO).

"Including non-EU airlines in the EU ETS is the wrong way to achieve the right objective," Kurland said.

Under the ETS, it is estimated that around 4,000 airlines will pay the EU for pollution permits, rendering the ETS one of the widest-reaching emission-regulative measures adopted by any country or regional bloc.

The scheme went into effect this year, although the first payment will not be due until April 30, 2013.

The EU says the ETS is aimed at helping the bloc cut carbon dioxide emissions by 20 percent by 2020 from the 1990 levels, but many governments are furious over what they deem a unilateral move.

In November last year, a group of 26 countries including China, the United States and India jointly denounced the ETS as "illegal" in a statement.

New EU flexibility was shown at the forum, however, when Matthew Baldwin, director for the EU's Air Aviation and International Policy, told reporters that the bloc, in recognition of the concerns, is committed to dialogue to seek a multilateral solution.

He said the EU is ready to "review and amend the ETS initiative" if a global solution can be reached.

His remarks signalled a change of tone from those of Isaac Valero-Ladron, a European Commission spokesman who in February refused to back down on the issue and warned of fines for airlines ignoring the emission law.

Roberto Kobeh Gonzalez, president of the ICAO council, told Xinhua that the ICAO was not invited by the EU to join negotiations over the ETS.

"We hope common sense, negotiations and diplomacy can solve the issue," he said. "But we are not involved (by the EU)."

Both China and the United States advocate emission reduction targets to be negotiated and established through the multilateral mechanism of the ICAO. The view was also echoed by Baldwin.

Baldwin also said the EU will not allow the ETS to become a distraction for EU-China relations.

China has banned its airlines from complying with the ETS, which requires all flights departing or landing at EU airports to buy permits for excessive emissions or face a fine.

Airbus parent company EADS said in March that China had blocked purchases of Airbus planes worth 12 billion US dollars in protest against the European carbon tax. The news was not confirmed by the Chinese side.

Tony Tyler, director general and chief executive officer of the International Air Transport Association (IATA), urged the EU to address the issue within the framework of the ICAO.

The IATA appreciates China's opposition to the ETS and understands China's view that the scheme infringes on other nations' sovereignty, he said.

The Chinese government argues that the EU plan violates international agreements on aviation and the policy set by the UN to deal with aviation carbon emissions through the ICAO.

In talks with Chinese aviation officials a day earlier, Kobeh agreed with Li that measures other than market-based ones can be taken to reduce emissions, such as the development of alternative fuels.

Li said China's aviation industry has invested over 600 million yuan ($95 million) to upgrade facilities to save energy and cut emissions since 2007.