Economy

Airlines battling costly EU plan

By Xin Dingding (China Daily)
Updated: 2011-05-10 14:32

BEIJING - The China Air Transport Association has said it and its airline members do not acknowledge the European Union's Emissions Trading System (ETS), something they say would cost them billions of yuan each year.

"If the EU insists on carrying out the plan, the association will strongly recommend that the Chinese government takes even harsher counter-measures against flights in and out of China operated by airlines from EU member countries," the association said in a statement.

Experts said under international conventions concerning civil aviation, all sides are equal, and measures taken in one country or market cannot be implemented unilaterally. They noted the move by the EU to extend its ETS system to non-EU airlines without consultation violates such conventions.

"The association's statement has paved roads for retaliatory measures that might be adopted by the government in the future," said Li Xiaojin, a professor at the Civil Aviation University of China.

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The association said in a statement on behalf of its members - which include Air China, China Eastern Airlines, China Southern Airlines and the HNA Group - that China supports all measures that will directly result in energy saving and emission reduction.

Diao Yonghai, director of the development and planning department at the Civil Aviation Administration of China, was quoted earlier as saying that the airlines' fuel consumption per ton-kilometer has dropped by 3 percent on average year-on-year throughout the past decade, compared to the 2 percent goal set by the International Civil Aviation Organization.

In China's case, every percentage point of decrease in fuel consumption means 170,000 tons of fuel is saved.

And Chai Haibo, the association's deputy secretary-general, noted that the EU's measure "cannot produce any direct, practical effect on energy saving and emission reduction".

The EU approved a proposal in 2008 to include the aviation industry in its ETS after emissions from the sector doubled since 1990. Such emissions account for around 3 percent of the EU's total carbon dioxide footprint.

Under the ETS, all flights departing or landing at EU airports will have to participate in emissions trading from Jan 1, 2012, which means airlines that exceed their carbon dioxide limit will have to buy unused quotas from more energy-efficient businesses or face a fine.

A total of 33 airlines from the mainland, Hong Kong and Macao special administrative regions are included in the list of airlines expected to participate, Chai said.

According to the industry's calculations, China's airlines will pay about 800 million yuan ($123 million) to the EU in 2012 and face a bill of more than 3 billion yuan in 2020. The total amount in next nine years is estimated to reach 17.6 billion yuan.

China is not the only country that is refusing to participate in the EU's plan.

Media reports say the United States airline industry has challenged the legality of the EU's plan. The US Air Transport Association and its three member carriers - American Airlines, Continental Airlines and United Airlines - launched a lawsuit last December.

"The aviation industry's emission problems should be solved by consensus between governments and airlines, rather than by a unilateral decision by the EU," said the China Air Transport Association in its statement, adding that China is willing to take part in such negotiations.