China could impound European planes in carbon row

BEIJING Tue Jun 12, 2012 5:27am EDT

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) - China will take swift counter-measures that could include impounding European aircraft if the European Union punishes Chinese airlines for non-compliance with a scheme to curb carbon emissions, the China Air Transport Association said on Tuesday.

Chinese airlines, which have been told by Beijing not to comply with the EU's Emissions Trading Scheme, refused to meet a March 31 deadline for submitting carbon emissions data.

EU Climate Commissioner Connie Hedegaard has said carriers have until mid-June to submit their data before enforcement action is taken.

"Chinese airlines are unanimous on this. We won't provide the data," Wei Zhenzhong, secretary general of the China Air Transport Association, said on the sidelines of an International Air Transport Association (IATA) meeting in Beijing.

The Chinese group represents major airlines there, including the big three state-controlled carriers Air China (0755.HK) (601111.SS), China Southern Airlines (1055.HK) (600029.SS), and China Eastern Airlines (600115.SS) (0670.HK).

"The government at least will take the same kind of measures and these anti-sanction moves will be lasting," Wei said.

However he said: "We would try to avoid any trade war."

A raft of countries including China, India, Russia and the United States have protested against the inclusion of all flights using EU airports into the emissions scheme.

"It's not about the money. It's an issue of sovereignty," said Paul Steele, IATA's director of aviation environment.

The EU plans to charge airlines a fee for their carbon emissions based on the quantity of carbon calculated for complete flights with an EU origin or destination, rather than just the portion flown over Europe.

Critics say this amounts to interference with national airspace.

The EU has delegated implementation of the scheme to member states, which would fine airlines for non-compliance.

If the airlines do not pay the fine, other theoretical EU counter-measures include impounding aircraft, IATA's Steele said.

Under the EU plan, Germany will determine whether Air China is in breach of ETS regulations or not; France will monitor China Southern Airlines; and the Netherlands will monitor China Eastern Airlines.

"We would not like to see a situation of 'you hold up my planes and I hold yours'," Wei said.

China, which according to Airbus and other sources in the European aerospace industry is delaying plane orders worth up to $14 billion from European planemaker Airbus EAD.PA over the row, has asked the EU to push the scheme back by a year.

"ICAO (the International Civil Aviation Organization) will hold its 38th meeting in October 2013, and the EU should at least push the deadline to that time and agree to resolve this issue based on the coordination of ICAO," Wei said.

(Reporting by Alison Leung; Editing by Daniel Magnowski)