China barred its airlines on Monday from joining the European Union’s new carbon trading scheme that will charge airlines for carbon emissions for flights to and from Europe.
Beijing also prohibited carriers from using the Emissions Trading Scheme as a reason to hike freight rates or passenger fares. Leading Chinese airlines had already said they would not comply with the scheme, which came into effect on Jan. 1.
But the official ban by Beijing has escalated the threat of an international aviation war over an issue that also provoked anger among the EU’s other leading trading partners including the U.S., Canada and India. The Air Transport Association estimates the EU scheme will cost airlines more than $1.1 billion annually.
Proposed legislation in the Congress, if passed, would also make it illegal for U.S. carriers to comply with the EU scheme.
But the EU today played down the threat of a clash with China. The European Commission “remains confident that Chinese carriers will comply with our legislation,” a spokesman for EU Climate Action Commissioner Connie Hedegaard said.
Chinese carriers are already implementing parts of the ETS, according to the spokesman. Hong Kong-based Cathay Pacific, a major cargo operator between the EU and China, said it has fully complied with the scheme but under strong protest.
Foreign carriers object to the ETS because emissions are calculated over the entire flight, not just over European airspace.
The U.S. government and its airlines say the EU’s unilateral action infringes national sovereignty and flouts international aviation agreements. But the EU’s highest court upheld the ETS in a final ruling in December against an appeal filed by American Airlines, United Continental and the Airlines for America lobby.
Charges under the ECT came into effect on Jan. 1, but payments aren’t due until 2013, which gives room for negotiations between the EU and foreign governments. The issue is expected to be raised during an EU-China summit in Beijing next week.