Chinese airlines urge their government to take retaliatory action if the EU does not exclude them from ETS

Chinese airlines urge their government to take retaliatory action if the EU does not exclude them from ETS | China

(photo: China Eastern)

Tue 22 Mar 2011 – According to a report in today’s Shanghai Daily, the China Air Transport Association (CATA) has written to the European Union on behalf of four leading Chinese airlines to protest at their inclusion in the EU Emissions Trading Scheme (EU ETS) from 2012. Unlike their US counterparts, who are taking legal action against the UK government over the issue, the Chinese carriers are merely expressing their opposition at this stage. However, the CATA will urge their government to take “corresponding measures” to safeguard their international rights if the EU fails to relent. The Chinese government has consistently resisted moves to implement market-based measures to control the growth of international aviation emissions, arguing that the restriction conflicts with the Kyoto climate change principle of Common But Differentiated Responsibilities (CBDR).


The CATA said in a statement on behalf of its members, including Air China, China Eastern Airlines, China Southern Airlines and the HNA Group (which includes a number of airlines such as Hainan Airlines), that significant flaws exist in the Aviation EU ETS and the rules violated international law. The statement, sent to the European Commission on March 10, said the aviation industry’s emissions problems should be solved by consensus between governments and airlines rather than by the EU’s unilateral decision.


The United States carriers are taking legal action against the United Kingdom since they are all assigned to the UK as their administering state under the scheme. Legal action can only be brought against a single State rather than the European Union as a whole. The four Chinese airlines, however, are each assigned to four different EU States: France, the Netherlands, Belgium and Germany. This presumes any action would have to be taken separately against the four States concerned.


The US action is due to be heard in the European Court of Justice but no date has yet been set for the hearing and a ruling may not take place until after the start of the scheme on 1 January 2012.


It is rumoured an Algerian airline is also in the process of taking its administering State, France, to court over its inclusion in the European scheme.


Through the UNFCCC and ICAO processes, China has objected to the application of market-based measures (MBMs), and by implication the EU ETS, on non-Annex I developing countries such as itself. The view of China, as expressed in its reservation statement objecting to certain paragraphs in the ICAO Assembly Resolution (A37-19) on climate change action passed last October (see article), is that climate change has been caused by the developed world and the mitigation burden should fall accordingly. The Chinese government’s stance is that MBMs can only be applied on the basis of mutual agreement and consensus, similar language to that used in the CATA statement.


Two weeks ago, the European Commission published its historical emissions figure on which it is to base its overall emissions cap under the EU ETS (see article). Airlines are due to be informed by the end of September of their share of the allocation of free emissions allowances, based on their tonne-kilometre data in 2010, from which they will be able to calculate the number of allowances they will need to buy. According to estimates from Thompson Reuters Point Carbon and RDC Aviation, aircraft operators covered by the scheme will face a collective 1.4 billion euros ($1.95bn) bill in 2012 to cover the predicted shortfall in allowances (see article).




Shanghai Daily article

China Air Transport Association

European Commission – Aviation EU ETS




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