Chinese Airlines Refuse to Pay EU Carbon Fees

At just five-days-old, the EU's plan to subject non-European airlines to greenhouse gas emissions fees continues to reverberate worldwide. A day after we noted that Delta Airlines has begun passing on some of the emissions fees to fliers, in the form of a $3 surcharge on tickets to or from Europe, comes a report in the Guardian newspaper that the four top Chinese airlines are refusing to pay.

A China Airlines Boeing 747, pictured in Amsterdam in July. Credit: flickr/caribb.

The new rule subjects airlines flying to or from Europe to the EU's Emissions Trading System, which allows companies that emit carbon dioxide, a gas that contributes to global warming, to buy and sell a limited amount of permits. The U.S., China and other countries are opposed to having their airlines subjected to this system, saying it would increase airfares and may violate international trade and environmental agreements.

It remains to be seen whether these airlines will incur penalties. As the Guardian story states, “airlines that fail to pay carbon allowances can be fined €100 ($128) per ton of carbon dioxide. Persistent offenders are liable to be banned” from flying to Europe. In other words — if the conflict persists, it could escalate into an outright climate change-related trade war. The Guardian story states:

“If the EU applies punitive measures, Chinese academics have suggested that the country's airlines should counter by reducing purchases of Airbus aircraft.

While such threats have since been played down, any escalation of conflict between these two huge economies would have implications for the world.

China says it is unreasonable for Europe to apply its policies to developing nations, which are still at the stage of rapid expansion of their airline industries and so find it difficult to cut overall emissions.

It says the costs of reducing carbon should be passed on to aircraft manufacturers — most of which are in Europe or the US — as an incentive for them to produce more efficient planes.

There is still time for a resolution because carbon fees do not have to be paid until March 2013. But Chinese airlines are already looking into legal actions against the EU and lobbying for countermeasures by the Chinese government.”

While U.S. airlines are opposed to the EU aviation fees and are pursuing legal actions against it, they are not—at least not yet—outright refusing to pay. And other Asian airlines with a significant European presence, such as Cathay Pacific and Singapore Airlines, are cooperating with the plan as well, the Guardian reports.