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Airline association to sue EU over carbon tax

China.org.cn, November 9, 2011

• Chinese airlines lash out at a carbon emisson tax to be imposed by an expanded carbon trade scheme of the EU. [File photo]

  Major Chinese airlines will jointly sue the EU over its expanded carbon trade scheme which will impose carbon charges on the emissions of all planes landing or taking off within the EU, an official with the China Air Transport Association said yesterday.

  The expanded scheme, expected to be the first international financial sanction on greenhouse gas emitters, may drive up the prices of flights to Europe.

  The association, representing 33 Chinese airlines, is preparing to challenge the move in EU courts by the end of the year, Zhu Qingyu, who is in charge of market research at the association, told Shanghai Daily.

  "We know it might be difficult to win the lawsuit in EU courts, but will still take the action as a measure of protest," Zhu said.

  According to the EU plan, as of January 2012, airlines flying to or from the bloc will have to buy permits from the Emission Trading System at a cost of 15 percent of the carbon emissions they generate, with large fines for noncompliance.

  The move is expected to cost Chinese airlines an estimated 17.6 billion yuan (US$2.77 billion) by 2020, or about 300 yuan for each ticket for flights between China and European countries.

  "The EU has no right to charge global airlines compulsively, let alone to charge on the carbon emissions generated on other countries' territorial air," Zhu said.

  The association demands that the EU not implement the system or suspend it until 2020. Otherwise, it will ask China to carry out stricter limits on EU airlines when they depart or land at Chinese airports.

  "The cooperation between the two regions' airlines and aircraft makers will be damaged, and the world's aviation industry will also be impacted if more regions take the same action against the EU plan," Zhu said.

  The EU plan has been challenged by US airlines in the European Court of Justice in July for breaching international law. The result has yet to be announced.

  Russia also railed against the EU scheme and issued a joint statement with China in September, saying the move infringes upon other countries' sovereignty and burdens global air carriers, Xinhua news agency said.

  The EU put the ETS into operation in January 2005 and views it a cornerstone of its fight against climate change. The bloc aims to cut carbon dioxide emissions by 20 percent from 1990 levels.

  The emission charges should be imposed not on airlines but on European and US companies which supply most of the engines used on major airlines' planes, as engines are the real culprits for carbon emissions, Zhang Hongbiao, an official in charge of technologies with Aviation Industry Corporation of China, told the China Economic Weekly.

  China's aviation watchdog also urged the EU to drop the plan yesterday after a UN aviation agency adopted a resolution against the plan.

  "We hope the EU will avoid this unilateral move, solve international aviation emissions issues and promote the sustainable development of the industry," an official with China's Civil Aviation Administration said on condition of anonymity.

  The arrangement would unfairly restrain the growth of developing countries' aviation industries, which are expanding rapidly compared with the almost fully tapped markets of developed countries, Xie Xingquan, chief legal adviser to CATA, told Xinhua news agency.

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