China aviation body urges members not to cooperate with EU CO2 scheme

An Air China Boeing 747-400 passenger jet, which is filled with mixture of biofuel and aviation kerosene, takes off on an inauguration test flight at Beijing Captital International Airport in Beijing, October 28, 2011.

BEIJING (Reuters) - Chinese airlines have been urged not to cooperate with a controversial scheme that will force them to buy carbon credits for all flights entering Europe starting on January 1, the head of the country's aviation industry group said.

Wei Zhenzhong, the secretary general of the China Air Transport Association CATA.L, said he has asked all domestic airlines to refuse to participate in the scheme, according to a report by the official China News Service on Thursday.

He has also requested domestic airlines not to submit CO2 monitoring plans to European officials or to enter into negotiations for preferential treatment, the report said.

Beginning on January 1, all airlines landing in Europe will be subject to a carbon cap and will be obliged to cover surplus emissions through the purchase of credits on the EU's Emissions Trading Scheme ETS.L.

The China Air Transport Association says the scheme will cost Chinese airlines 800 million yuan in the first year and more than triple that by 2020.

Airlines across the world have criticised the scheme as "unilateral" and "protectionist", and have threatened legal action, saying it violates the 1944 Chicago Convention on International Civil Aviation, the Kyoto Protocol and the rules of the World Trade Organisation.

Wei said the Chinese government should consider adopting retaliatory measures were Europe to continue with the scheme in the face of "global opposition".

He said CATA was currently choosing the most appropriate time to take formal legal action against Europe, but admitted the prospects of success were "not optimistic" after preliminary opinions from the European Court of Justice in October declared the scheme to be within the law.

EU officials have said Europe is entitled to impose the scheme following the failure of multinational talks on curbing aviation emissions.

They have also rejected claims that the scheme will impose a heavy financial burden on global airlines, noting that 85 percent of emission permits were granted free of charge in the first year of implementation.

(Reporting by David Stanway; Editing by Ken Wills)