Chinese carriers shun EU ETS rules warning; signals retaliation

Chinese carriers are refusing to join European Union Emissions Trading Scheme (EU ETS) despite EU climate commissioner Connie Hedegaard’s warning Tuesday oftheir violation of new reporting rules.

Hedegaard said that Chinese and Indian airlines have until mid-June to report their data before enforcement action is taken, according to China Air Transport Assn. (CATA) DG Wei Zhenzhong (ATW Daily News, May 16).

“EU ETS is a unilateral action and lacks any basis to enforcement action and punishment,” Wei Zhenzhong said. “Currently ICAO is working on formulating a global solution to it and we would prefer to rely on technological advancement and promotion of biofuels to reduce carbon emissions,” he said, adding that the CAAC is working on how to confront the EU ETS, which include retaliatory measures.

In February, the Chinese government’s state council issued a statement prohibiting Chinese carriers from participating in EU ETS without government approval (ATW Daily News, Feb. 7).

“If EU really makes any punishment on our Chinese carriers, we can take counter measures against them.” CATA Marketing Director Zhu Qingyu said.

In March, Airbus CEO Louis Gallois said Beijing blocked approval for $12 billion worth of Airbus orders to protest the European aviation carbon tax (ATW Daily News, March 9).

CATA estimates Chinese carriers’ operating expenses will increase by CNY800 million ($127.2 million) annually because of EU ETS. Expenses associated with EU ETS are predicted to keep increasing as Chinese carriers open more international routes to Europe to compete with the high speed rail.
source:May 17, 2012ATW