Aviation firms call on EU leaders to fix carbon spat

PARIS/LONDON Mon Mar 12, 2012 8:20am EDT

1 of 3. A China Southern Airlines plane lands at the Beijing Capital International Airport October 2, 2010. Countries opposed to an EU law forcing the world's airlines to pay for carbon emissions have agreed on a basket of retaliatory measures but will leave it up to each country to choose among them, Russia's deputy transport minister said on Wednesday.

Credit: Reuters/Petar Kujundzic

PARIS/LONDON (Reuters) - The heads of planemaker Airbus and a group of top European airlines and engine makers have written to political leaders calling on them to resolve an escalating trade spat over a recently introduced European Union carbon charge.

The signatories said retaliation by China and other countries that oppose the EU Emissions Trading Scheme (ETS) was leading to serious consequences for the region's aviation industry, according to a statement released by Airbus.

Airbus said China had already suspended orders for its aircraft worth $12 billion, which the planemaker estimated would put more than 1,000 in-house jobs and at least another 1,000 supply-chain positions at risk.

The nine chief executives behind the joint letters to the prime ministers of Britain, France and Spain and Germany's chancellor expect the "list of suspensions, cancellations and punitive actions to grow as other important markets continue to oppose ETS".

The CEOs called for urgent talks at the level of the EU Council and with the states taking retaliatory trade action as the situation becomes intolerable for the European aviation industry, the Airbus statement said.

"The aim must be to find a compromise solution and to have these punitive trade measures stopped before it is too late," the CEOs wrote, according to Airbus. "We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions."

The CEOs said a solution could only come via the United Nations' International Civil Aviation Organization (ICAO), which had recently appointed a group to make proposals for international aviation emissions by the end of the year.

The European Commission has repeatedly said it would only modify its law if ICAO can come up with a global scheme, which would make the EU's legislation requiring all airlines to pay into its carbon scheme unnecessary.

It says member states are also united on this issue, and on Friday a meeting of environment ministers from all 27 EU nations reiterated they were fully behind the EU scheme.

The aviation industry executives added that they remained in support of global emissions trading schemes.

In addition to Airbus, the signatories included the heads of airlines British Airways and Iberia, owned by International Airlines Group, Air Berlin, Air France, Lufthansa and Virgin Atlantic.

The heads of aircraft engine makers Safran of France and MTU Aero of Germany also signed the letters.

(Reporting by James Regan and Stephen Mangan; Additional reporting by Barbara Lewis; Editing by Ron Popeski and Hans-Juergen Peters)

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