Airbus tries to get inclusion of aviation in ETS suspended. EU confirms no change.

There have been press stories suggesting that European officials backing Airbus – the “Airbus ministers” -are recommending the suspension of ETS in order to avert a trade war with major economic powers such as China and the USA.  China and India do not allow their airlines to participate in the ETS because the charge is for the whole flight distance, not just the section over Europe.  Beijing has blocked purchases of European aircraft (Airbus) by its carriers, so Airbus is unhappy about losing its fastest-growing market and is putting strong pressure on the EU as they may lose plane sales.  Those backing Airbus want a “solution” before April 2013, but the matter is not due to be dealt with by ICAO till September 2013.  Connie Hedegaard has confirmed that there are “no changes in EU and member states approach on the ETS and aviation” and this is just pressure from Airbus. The EU has repeatedly said it won’t give up its pollution curbs on airlines. 



 

 

And then a day later, 

EU states deny reports that their Airbus ministers seek suspension of EU ETS until ICAO agreement

GreenAir online  13.9.2012

http://www.greenaironline.com/news.php?viewStory=1589 which includes this:

A spokesman at the UK’s Department for Business said it was incorrect that his minister was calling for a suspension of aviation from the EU ETS.

“The UK is committed to reducing aviation emissions and to the role of the EU ETS in doing so,” he told GreenAir. “Like other European nations, the UK is keen to address issues that have been raised by a number of nations around the operation of the aviation element of the EU ETS. There was agreement by the European ministers at the Berlin Air Show that these issues need to be addressed through a global agreement to tackle aviation emissions.

“We recognise that a failure to resolve these issues could have a serious impact on the UK and European aerospace manufacturing and aviation sectors. We are pressing for faster progress in the International Civil Aviation Organization (ICAO) and other fora to secure a global solution which delivers on the EU’s objectives of continuing to reduce emissions from aviation.”

 

Europe considers suspending airline emissions charge

Officials stress the need to avert a trade war with major economic powers such as China and the United States

12 September 2012  (Guardian)

European officials signaled on Tuesday that they may recommend the suspension of the continent’s carbon emission fees for airlines to avert a trade war with major economic powers such as China and the United States, allowing time to forge a global agreement on climate charges for the aviation industry.

China and India have prohibited their airlines from participating in the European trading system (ETS) because it will require airlines that fly to and from Europe to buy permits for all the carbon they emit en route, a measure they say infringes on their sovereignty. Beijing has also blocked purchases of European aircraft by its carriers – prompting alarm from Europe’s aircraft maker Airbus, which sees China as its fastest-growing market.

In Washington, too, the Senate is considering banning US airlines from complying with the EU law.

“This conflict could become serious and Airbus could suffer deeply,” said Peter Hintze, a German deputy economy minister.

Speaking after meeting Tuesday with Airbus representatives on the sidelines of the ILA Berlin Air Show, Hintze and his counterparts from Spain, France and Britain [these are called the Airbus Ministers – see below ] said they agreed to push for a global solution when the International Civil Aviation Organisation, a UN body, convenes in September 2013.

But because the EU’s carbon trading system begins in earnest before then, the EU would have to agree to make an exception for airlines to prevent retaliation against European companies.

“We must see that we find a way to avert this conflict before April 2013,” said Hintze.

EU officials have in the past defended pressing ahead with the levy after previous attempts at a global carbon charge for airlines failed. The 27-nation bloc has traditionally been at the forefront of international efforts to curb emissions of greenhouse gases, earning praise from environmental groups but criticism from developing nations that say some of the measures limit their economic growth.

With Airbus, a big European employer, warning of serious commercial consequences if ETS for airlines comes into force next year, officials stressed the need to act fast.

“Airbus today has left us in no doubt that the threat of retaliatory action is a clear and present danger to their order list,” said Michael Fallon, Britain’s business minister. “We are very aware that the clock is now ticking,” he added. “It really is important that we find, across the world, a solution to this.”

http://www.guardian.co.uk/environment/2012/sep/12/europe-airline-emissions-charge?newsfeed=true

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Airbus  http://en.wikipedia.org/wiki/Airbus

Airbus employs around 63,000 people at sixteen sites in four European Union countries: France, Germany, the United Kingdom and Spain. Final assembly production is based at Toulouse, France; Hamburg, Germany; Seville, Spain; and, since 2009, Tianjin, China


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By contrast: 

EU Nations Uphold Support for CO2 Aviation Curbs, Hedegaard Says

By Ewa Krukowska (Bloomberg)
Sep 12, 2012 

European Union nations reiterated their support for the inclusion of aviation in the bloc’s emissions trading system, denying media reports that some members seek a suspension, the EU Climate Commissioner (Connie Hedegaard) said.

“Clear corrections from governments on odd press story from yesterday: no changes in EU and member states approach on the ETS and aviation,” Connie Hedegaard said today on her Twitter Inc. account.

The 27-nation EU decided in 2008 to include flights to and from Europe within its greenhouse-gas-reduction system from 2012 after airline emissions in the region doubled over two decades. The enlargement of the cap-and-trade program triggered opposition from countries including the U.S., China and Russia.

The European Commission, the EU regulatory arm, must craft a compromise as soon as possible, senior politicians from FranceGermanySpain and the U.K. said yesterday at the Berlin air show. The comments followed a meeting with the management of Airbus SAS, which has said a trade dispute with China threatens to undermine its aircraft sales.

France upholds its position and continues to support the inclusion of aviation in the EU ETS while looking forward to a global solution, a government official, who declined to be identified citing policy, said today.

Non-EU countries opposing the expansion of the EU ETS into airlines say Europe should let the UN’s International Civil Aviation Organization, or ICAO, regulate greenhouse-gas limits for the industry. The ICAO said in November it wants to strike a deal this year to create a global carbon system for airlines.

Germany’s position remains unchanged and the country doesn’t want to remove aviation from the EU carbon program, German official said today, declining to be identified citing policy. The country is looking forward to an ICAO solution, the official said.

The EU has repeatedly said it won’t give up its pollution curbs on airlines. Spain and the U.K. also confirmed today they haven’t changed their positions, an EU official said today, who declined to be identified citing policy.

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net

 

http://www.bloomberg.com/news/2012-09-12/eu-nations-uphold-support-for-co2-aviation-curbs-hedegaard-says.html

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So called “Airbus ministers” seek suspension of EU emissions plan

By Maria Sheahan and Victoria Bryan (Reuters)

Article subsequently altered on 14th September- see below – less forceful

[The Airbus Ministers are described as being government ministers from Britain, Germany, Spain and France. These are Michael Fallon, new business minister in Britaiin,  Peter Hintze, the German aerospace policy coordinator ]. 

Sep 12, 2012

(Reuters – Berlin) – Aerospace officials of the European countries where Airbus makes its planes will push for a suspension of the European Union’s Emission Trading System ETS.L for airlines to avert retaliation from China, officials said on Tuesday. [This bit of the article later removed].

“Airbus has left us with no doubt that the threat of retaliatory action is a clear and present danger to its order list,” Michael Fallon, new business minister in Britain, said at the ILA Berlin Air Show on Tuesday.

There is harsh opposition to the ETS from European air travel companies and countries outside the EU such as the United States, Australia and Brazil that have said they want a global agreement to curb carbon emissions rather than a European law that extends to non-EU companies.

China has threatened retaliation – including impounding European aircraft – if the European Union punishes Chinese airlines for not complying with its emissions trading scheme ETS.L, intended to curb pollution.

The dispute between China and the EU froze deals worth up to $14 billion, though China signed an agreement with Germany for 50 Airbus planes worth over $4 billion during Chancellor Angela Merkel’s visit to Beijing last month.

If the dispute is not resolved, Airbus will have to cut its production target for the A330 “pretty soon”, Airbus Chief Executive Fabrice Bregier said late on Monday.

“We are very much aware that the clock is ticking. We have very little time left,” Fallon said, referring to airlines’ first EU deadline in April 2013 to pay for their emissions.

He was speaking at a joint news conference of the four government officials from  – the so-called Airbus ministers – who usually meet at air shows to discuss matters related to Airbus (EAD.PA).

Chris Davies, the Liberal Democrat environment spokesman in the European Parliament, described the UK minister’s remarks as “a stab in the back” for EU negotiators.

“Europe’s negotiating strength depends on our unity and our determination. Nothing will be achieved by showing weakness in the way this poorly informed junior minister would like,” he told Reuters.  (This bit has been removed from the updated version).

DISCRIMINATION

The airline industry has said the ETS distorts competition, forcing European carriers to pay more simply because of the fact they are based in the EU.

“We feel we are being discriminated against,” Germany’s aerospace policy coordinator Peter Hintze said. “We demand a global solution from an industrial policy point of view because we could otherwise put ourselves at a disadvantage in major markets.”

Hintze, Fallon and their French and Spanish counterparts will urge their national governments to push for a suspension of the EU’s ETS until the next general meeting of global trade body ICAO – the United Nations’ International Civil Aviation Organization – in September 2013.

Hintze said no decision had been made yet on what a global agreement on emissions trading could look like.

“The goal must be that the contribution of aviation is not just limited to one continent but is agreed worldwide,” he said.

Airbus sales chief John Leahy suggested at a separate news conference on Tuesday that one possible solution could be that all airlines around the world pay a tax to ICAO for carbon emissions, regardless of where they are based.

(Additional reporting by Nina Chestney; Editing by David Holmes and Elaine Hardcastle)

http://www.reuters.com/article/2012/09/12/uk-germany-airshow-emissions-idUSLNE88A02220120912

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The next day (14th September) Reuters amended this article, to be less strident, so it now reads:

Airbus ministers seek suspension of EU emissions plan -Hintze

14.9.2012 (Reuters)

By Maria Sheahan and Victoria Bryan  

(Reuters) – Aerospace officials of the European countries where Airbus (EAD.PA) makes its planes will push for a suspension of the European Union’s Emission Trading System (ETS) for airlines to avert retaliation from China, an official said on Tuesday.

The German government official in charge of aerospace policy, Peter Hintze, said after a meeting of the so-called Airbus ministers from Britain, France, Germany and Spain that they would propose to their national governments that payments under the ETS should be delayed beyond the planned April start.  (this para is new).

“I am in favour of a suspension until the autumn of 2013,” Hintze told journalists following a news conference with fellow ministers. “That would buy some time from April until September.”

During the news conference the other ministers did not spell out exactly what action they intended to take.

Michael Fallon, new business minister in Britain, said at the ILA Berlin Air Show on Tuesday: “Airbus has left us with no doubt that the threat of retaliatory action is a clear and present danger to its order list.”

There is harsh opposition to the ETS from European air travel companies and countries outside the EU such as the United States, Australia and Brazil that have said they want a global agreement to curb carbon emissions rather than a European law that extends to non-EU companies.

China has threatened retaliation – including impounding European aircraft – if the European Union punishes Chinese airlines for not complying with its emissions trading scheme (ETS), intended to curb pollution.

The dispute between China and the EU froze deals worth up to $14 billion, though China signed an agreement with Germany for 50 Airbus planes worth over $4 billion during Chancellor Angela Merkel’s visit to Beijing last month.

If the dispute is not resolved, Airbus will have to cut its production target for the A330 “pretty soon”, Airbus Chief Executive Fabrice Bregier said late on Monday.

“We are very much aware that the clock is ticking. We have very little time left,” Fallon said, referring to airlines’ first EU deadline in April 2013 to pay for their emissions.

He was speaking at a joint news conference of the four government officials from Britain, Germany, Spain and France – the so-called Airbus ministers – who usually meet at air shows to discuss matters related to Airbus.

DISCRIMINATION

The airline industry has said the ETS distorts competition, forcing European carriers to pay more simply because of the fact they are based in the EU.

“We feel we are being discriminated against,” Hintze said. “We demand a global solution from an industrial policy point of view because we could otherwise put ourselves at a disadvantage in major markets.”

Hintze said the ministers would urge their national governments to push for a suspension of the EU’s ETS until the next general meeting of global trade body ICAO – the United Nations’ International Civil Aviation Organization – in September 2013.

Hintze said no decision had been made yet on what a global agreement on emissions trading could look like.

“The goal must be that the contribution of aviation is not just limited to one continent but is agreed worldwide,” he said.

Airbus sales chief John Leahy suggested at a separate news conference on Tuesday that one possible solution could be that all airlines around the world pay a tax to ICAO for carbon emissions, regardless of where they are based.

(Additional reporting by Nina Chestney; Editing by David Holmes, Elaine Hardcastle and Anthony Barker)


And a bit of history:

EU seeks to force transport CO2 rules on trade partners

24.7.2007

The Commission’s plans to integrate aviation into the EU’s CO2 emissions cap-and-trade
system also received broad support from member states, but a majority of countries
insisted that all routes – intra-EU and international – be covered by the scheme
as of the same date.   This would effectively force foreign airlines to comply
with EU aviation emissions rules.  But US carriers are adamant that this would
be illegal and that the EU must wait for a global agreement to be reached in the
International Civil Aviation Organisation (ICAO).   On aviation, Danish Environment
Minister Connie Hedegaard said: “We cannot wait for ICAO and we cannot allow our
competitiveness to be harmed….All flights must be included from day one.”     Dutch
Environment State Secretary Pieter van Geel   agreed: “I can envisage that from
2011 we could start with all flights, not just EU ones.” But he warned that the
EU would have to prepare itself, legally speaking, for the number of complaints
that would come from third countries.     (EurActiv article)