(Reuters) - The United Nations body responsible for civil aviation weighed in against the European Union’s emissions trading scheme on Wednesday, increasing pressure on the EU to back down in what threatens to become a serious trade dispute.
After months of rhetoric on both sides, the U.N.’s International Civil Aviation Organization adopted a working paper from the United States, China and two dozen other nations urging the EU not to include non-EU carriers in its plan. The ICAO said the paper had been adopted by “a clear majority,” although European countries had expressed strong reservations.
Under the EU’s proposals to put a price on pollution, airlines will have to buy permits to help offset greenhouse emissions from jetliners operating in, to and from Europe.
“It is disappointing that ICAO discussions once again focus on what States should not do instead of what they should do to curb growing aviation emissions,” Connie Hedegaard, the EU’s top climate action official, said in a statement.
“Unfortunately ICAO has missed again today the opportunity to tell the world when it will (put forward) a viable global solution.”
The aviation industry on Wednesday also called for urgent action to prevent disruption to trade and tourism as a result of the plan, which has already sparked tit-for-tat legislation in the U.S. Congress.
The EU rules are to take effect on January 1, and the airlines said they could lose 1.2 billion euros in 2012, or a quarter of this year’s profits.
Opposing nations say the plan would infringe a “cardinal principle of state sovereignty” by basing its charges on the distance flown by each flight, which means calculations would include foreign airspace, in violation of a 1944 pact that gives each country exclusive authority over its skies.
It would also discriminate against nations located furthest away from Europe.
With billions riding on new regulations, environmental measures have increasingly spilled over to trade tensions. European bioethanol producers targeted U.S. farmers Wednesday in a dispute that could lead to import tariffs on the green fuel.
Under the EU aviation plan, airlines would have to adopt an emissions trading scheme that has been running since 2005.
Airlines would be allocated tradeable pollution allowances, with each permit representing a tonne of carbon dioxide. Each time a flight to, from or within the EU emits that much CO2 an allowance must be handed back from the same pot or acquired.
Airlines failing to obey face fines of 100 euros per missing permit, or 10 times their current market value. In extreme cases they could be banned from the 27-nation bloc.
The 26 objecting nations warned of a “chaotic situation” as other countries tried to come up with competing schemes.
“The Council’s decision today is one more skirmish in the airlines’ continuing battle to evade pollution regulation,” said Pamela Campos, a lawyer with the Environmental Defense Fund who attended the ICAO meeting, said in a release.
Tony Tyler, director general of the International Air Transport Association, which represents 230 airlines, said earlier that the industry was ready to adopt market-based tools to control emissions, but urged the EU to act internationally.
He said the carbon plan would hit profits and make it harder to invest in cleaner aircraft, although competition would limit the impact on consumers.
The airport industry, which often squabbles with airlines over landing charges, backed the carriers by calling for urgent action to avert a trade conflict.
Environmental groups say air travelers have had an easy ride on pollution and adding aviation to the EU’s prime tool for controlling greenhouse emissions would address this.
“Emissions have doubled in 20 years and a plane ticket is about the cheapest way a person can heat the planet right now in terms of CO2 per dollar,” said Dudley Curtis of the T&E environmental lobby group, based in Brussels.
The Republican-led U.S. House of Representatives voted last week to ban U.S. airline compliance with the scheme, raising the prospect that flights could be disrupted. It remained unclear if the Democratic-controlled Senate would back the move, which the EU has criticized as an attack on its laws. (Reporting by Allison Martell in Toronto and Barbara Lewis in Brussels; Additional reporting by Tim Hepher, Timothy Heritage and Juliane von Reppert-Bismarck; Editing by Christian Plumb and Janet Guttsman)