US Senate backs China on EU airlines carbon tax

The US added to a chorus of international condemnation on Monday against an EU rule that would force world airlines to contribute to a European emission reduction scheme.

Late on Monday, the US Senate passed a Federal Aviation Administration (FAA) bill that calls on the government to use “all political, diplomatic and legal tools” to ensure the EU Emissions Trading Scheme (ETS) would not apply to US airlines.

Meanwhile, China has threatened to enforce measures to protect its airlines, raising fears of a trade war in the global aviation industry at a time when the EU is desperately seeking Chinese help to resolve its debt crisis.

The ETS, a carbon trading scheme whereby all flights leaving or arriving at EU airports are forced to pay a fee, came into effect at the beginning of January 2012.

Under the new rules, airlines failing to comply face fines of 100 euros per tonne of CO2 emitted during a flight. As a last resort, the EU scheme stipulates that airlines can be banned from European airports.

On Monday Markus Ederer, the EU’s Ambassador to China, said that compliance with the rules would add approximately 2 euros to the cost per passenger of a flight from Beijing to Brussels at current fuel prices.

‘Unilateral’ and ‘discriminatory’

But the US, China as well as Brazil and India see themselves being forced into a scheme which US Secretary of State Hillary Clinton branded “unilateral” last month.

An appeal by a group of US airlines against the “discriminatory” legislation was rejected in December 2011, by the European Court of Justice, which ruled that the ETS was fully legal.

On Tuesday Airlines for America (A4A), America's oldest and largest airline trade association, reiterated its determination not to be forced into compliance with the ETS.

“Airlines for America and our member airlines continue to strongly oppose the application of the EU ETS to US airlines and continue to fight against it,” A4A spokesman Steve Lott told FRANCE 24. “We have made clear with EU officials … any compliance with their unilateral and unlawful scheme is under protest.”

‘A trade barrier’ for China

The Senate’s approval of the FAA followed an announcement on Monday by China that it had banned its carriers from complying with the ETS, denouncing the rule as a “trade barrier in the name of environmental protection”.

Beijing’s objections leave Europe in a tight spot. Chinese and European delegates are preparing to meet next week after Beijing said it would provide more financial support to help Europe with its debt crisis.

On Tuesday China’s Foreign Ministry said it hoped “that the EU ... can pay attention to China's concerns and take a practical and constructive attitude to increase communication and coordination with all sides to find an appropriate solution that all sides can accept," Liu Weimin said at a news briefing.

‘No one wants a trade war’

In implementing the ETS, the EU maintains it was driven to act after more than a decade of inaction at the UN International Civil Aviation Organization (ICAO), which has yet to find a global solution to tackling airline emissions.

The aviation industry contributes to some 3% of greenhouse gas emissions and this figure is expected to rise considerably over the next decade.

On Monday Angela Gittens, director of Airports Council International, a body which represents airports in most countries, said that while many saw the ETS as a unilateral move, the responsibility to reduce emissions lay at the feet of the airlines themselves.

“The aviation industry recognises its role in creating the [emissions] problem,” she told FRANCE 24. “And there is an intention by all parties to de-escalate this situation. But this must be done through the ICAO, whose very purpose is to reconcile such differences.

“All parties have a role to play, and absolutely no one wants a trade war.”