Beijing calls for talks as airlines reject emissions tax
CHINA voiced its concern and opposition yesterday to an EU plan to counter airline emissions and called for talks to resolve the issue after China’s major airlines refused to pay any carbon costs under the new law.
From January 1, all airlines using EU airports fall under the EU’S Emissions Trading Scheme (ETS), and could be forced to pay fines of 100 (R1 052) for each ton of carbon dioxide emitted for which airlines have not surrendered carbon allowances.
“China opposes the
EU’S unilateral legislation. China has expressed to the EU our deep concern and opposition many times on a bilateral level,” Foreign Ministry spokesman Hong Lei said.
“We hope the EU can take careful precautions with a cautious and practical attitude, and regarding those aspects involving China, appropriately discuss and handle this matter,” Hong said.
The scheme was launched in 2005 as one of the pillars of Europe’s efforts to combat climate change, and if airlines persistently flout the law the EU has the option of banning the operator.
Following a December ruling from Europe’s highest court that inclusion of airlines in the ETS was valid, China’s official Xinhua news agency warned of a trade war.
Spokesman Hong said that other countries had taken an equally negative view of the legislation. The US has warned of possible retaliation, while a draft law in the US Congress proposes to make it illegal to comply with the EU legislation.
Cai Haibo, deputy secretarygeneral of the China Air Transport Association (Cata), on Wednesday said that China would not co-operate with the EU on the scheme.
“If governments like the US, China and Russia, can launch strong and forceful retaliatory measures, this will form enormous pressure we hope could make the EU to turn its head.”
Cata represents flag carrier Air China, China Southern Airlines, China Eastern Airlines and Hainan Airlines.
The association estimates the scheme will cost Chinese airlines 800 million yuan (R1 billion) in the first year and more than triple that by 2020.
Cai said Chinese airlines would consider legal action against the EU in response to any such charges.
The European Commission has assessed the impact on air fares at 2 to 12 a passenger. For airlines, the cost is gradual as 85 percent of carbon allowances are handed out for free this year and bills would be due only next year.
Kelvin Lau, a Hong Kongbased airlines analyst at Daiwa Securities, said if Chinese airlines refused to pay the charges it would have little immediate impact, but the EU would not allow China to walk away.
“It is still in a negotiation phase and maybe it’s just a political gesture for Chinese airlines to say they won’t pay – showing that China strongly opposes the rule,” Lau said.