EU faces growing row over jet carbon plan


3.11.2011 (Reuters)

Reuters) – Pressure mounted on the European Union on Wednesday to back down over
charges for jetliner pollution as a United Nations body was urged to weigh in
and help prevent a carbon trade war. 

The aviation industry called for urgent action to prevent disruption to trade
and tourism links as a result of EU plans to make airlines join a cap-and-trade
scheme to curb emissions, which has sparked tit-for-tat legislation in the U.S.


After months of rhetoric on both sides, the United States, China and two dozen nations including the world’s newest trade powers prepared to
complain about the plan at the U.N.’s International Civil Aviation Organisation
in Montreal.


A working paper due to be discussed there Wednesday, seen by Reuters, urged the
U.N.’s aviation standards body to tell the EU to abandon unilateral proposals
and back ICAO efforts to come up with a global alternative within two years.


The EU plans are due to take effect on January 1, prompting a warning from airlines
that they could lose 1.2 billion euros (1.0 billion pounds) in 2012, equivalent
to a quarter of this year’s profits.


Besides any economic effects, opposing nations say the plan would infringe a
“cardinal principle of state sovereignty” by basing its charges on the distance
flown by each flight, meaning foreign airspace would be included in the calculations.


Under a 1944 pact setting rules for aviation after World War II, each country
has exclusive authority over its skies.


Critics also say it would discriminate against nations located furthest away
from Europe.


The EU has insisted on its right to go ahead with the scheme as it tackles greenhouse
gas emissions, but its top climate official struck a conciliatory tone Wednesday.


“I think in the way the European Union constructed its law there is plenty of
room for flexibility and manoeuvre,” Hedegaard told Reuters in an interview on
a visit to Moscow.


“We also said third parties, if they do something else to try to cope with the
emissions from aviation, can be exempted from paying in Europe when they land
in Europe … We are very willing to look into these equivalent measures.”


Hedegaard gave no details but said she did not believe the dispute would lead
to U.S. airlines avoiding Europe.


The Republican-led U.S. House of Representatives voted last week to ban U.S.
compliance with the scheme, raising the prospect that flights could be disrupted.
It remained unclear whether the Democrat-controlled Senate would back the move.




With billions riding on new regulations, environmental measures increasingly
spill over to trade tensions. European bioethanol producers targeted U.S. farmers
Wednesday in a dispute that could lead to import tariffs on the green fuel.


Under the EU aviation plan, airlines would have to adopt an emissions trading
scheme that has been running since 2005.


Airlines would be allocated tradeable pollution allowances, with each permit
representing a tonne of carbon dioxide. Each time a flight to, from or within
the EU emits that much CO2 an allowance must be handed back from the same pot
or acquired.


Airlines failing to obey face fines of 100 euros per missing permit, or 10 times
their current market value. In extreme cases they could be banned from the 27-nation


The 26 objecting nations warned of a “chaotic situation” as other countries tried
to come up with competing schemes.


The U.S.-backed group includes Brazil, Russia and India and represents a majority of ICAO’s 36-member governing council.


Tony Tyler, director general of the International Air Transport Association,
which represents 230 airlines, said the industry was ready to adopt market-based
tools to control emissions but urged the EU to act internationally.


“We urge the Europeans to drop their proposals and devote the energy they and
other states are spending on fighting each other to co-operating on developing
a (global) framework,” he told reporters in a conference call.


Tyler said consumers would be spared higher ticket prices because of competition,
but that the carbon plan would hit profits and make it harder to invest in cleaner


The airport industry, which often squabbles with airlines over landing charges,
gave its backing to the carriers by calling for urgent action to avert a trade


Environmental groups argue air travellers have had an easy ride on pollution
and that adding aviation to the EU’s prime tool for controlling greenhouse emissions
would address this.


“Emissions have doubled in 20 years and a plane ticket is about the cheapest
way a person can heat the planet right now in terms of CO2 per dollar,” said Dudley
Curtis of the T&E environmental lobby group, based in Brussels.