July 5, 2011 / 10:40 AM / in 6 years

China commentary slams EU airline CO2 scheme

BEIJING (Reuters) - A European Union plan to include all airlines flying to Europe in the Emissions Trading Scheme (ETS) from next year is unfair and contrary to global efforts to fight climate change, China’s state-run Xinhua news agency said on Tuesday.

The ETS system compels polluters to buy permits for each ton of carbon dioxide they emit above a certain cap. But China has resisted, saying it is unfair for developing countries and costly.

The China Air Transport Association says the scheme will cost Chinese airlines 800 million yuan ($123 million) in the first year and more than triple that by 2020.

Xinhua, whose commentaries are a reflection of government thinking on major issues or controversies, said the scheme had been ill-thought out.

“In the name of dealing with climate change, the EU’s approach will generate enormous financial benefits at the expense of the rest of the world, including developing countries,” it said in an English-language commentary .

“Studies show that the extra costs of the EU’s plan will amount to $1.6 billion dollars in the first year alone. The direction of the cash flow is contrary to the spirit of the agreements reached at the UN Cancun climate change conference last year.”

At least 16 Chinese airlines have the rights to fly to Europe, with 11 actually operating regular services.

Among the most affected will be Air China, China Southern Airlines and China Eastern.

While the EU was right to address the issue of aviation emissions, this was the wrong way of doing it, Xinhua said.

“The EU’s attempt to force the rest of the world to conform to its own system is sure to undermine the international cooperation needed in the historic battle against climate change,” it added.

“The EU needs to listen to the concerns of the rest of the world and rethink its plan now.”

The EU’s step to include aviation into the bloc’s $120 billion trading scheme has been deeply unpopular among global airlines, which have said the move is costly, illegal and particularly unfair on long-haul carriers.

U.S. airlines will step up their campaign against the policy this week, with a legal challenge at Europe’s highest court to their inclusion in the EU carbon market.

Non-EU carriers will have to pay carbon costs based on the entire journey, something that angers Asian airlines in particular because of the long distances to Europe.

While the scheme will be allocating about 80 percent of pollution permits for free to reduce costs, most of the remainder have to be bought from the market.

Reporting by Ben Blanchard; Editing by Yoko Nishikawa

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