China says EU carbon rule to cost $2.8 bln by 2030

BEIJING Mon Mar 5, 2012 5:55am EST

A plane flies in the polluted air above the airport fences in Beijing February 22, 2012.  REUTERS/Petar Kujundzic

A plane flies in the polluted air above the airport fences in Beijing February 22, 2012.

Credit: Reuters/Petar Kujundzic

BEIJING (Reuters) - The European Union's plan to charge airlines for their greenhouse gas emissions would rise dramatically to cost Chinese airlines 18 billion yuan a year by 2030, China's civil aviation head said on Monday.

China would continue to push the EU to axe the scheme, which has angered countries including the United States and India, but was not planning to take retaliatory measures, said Li Jiaxiang, chief of China's Civil Aviation Administration.

"We are not in a position where we have to retaliate," Li told reporters on the sidelines of China's annual parliament meetings.

The United States said last month it had not yet decided whether to retaliate against the EU over the carbon plan.

Li reiterated that the plan would raise annual costs for China's airlines by 800 million yuan initially, and said this would rise to 3 billion yuan by 2020 and 18 billion yuan by 2030. He did not elaborate.

"We are taking positive measures of talking via the International Civil Aviation Organisation and other bodies to promote cooperation and reconciliation," he added

China has barred airlines from joining the EU scheme, which could levy charges for carbon emissions for flights in and out of Europe, without permission from Beijing.

Foreign governments say the EU is exceeding its legal jurisdiction by charging the carbon cost for an entire flight, as opposed to levying a cost for just the Europe-leg of the journey.

The European Commission argues the scheme is needed to cut rising emissions and help the world fight climate change.

Under the EU plan, airlines that do not comply face fines of 100 euros for each tonne of carbon dioxide emitted for which they have not surrendered allowances. The EU has the right to ban persistent offenders from its airports.

"We appreciate the EU's intention to protect the environment, but measures must be reasonable and acceptable for other countries," Li said.

Li also said that China has no plans to buy more of Airbus' EAD.PA flagship A380 jet at present.

China-backed Hong Kong Airlines last week threatened to cancel an aircraft order with Airbus in the latest escalation of tension over the plan, the South China Morning Post reported.

(Reporting by Zhou Xin and Koh Gui Qing; Editing by Richard Pullin)

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