China and Russia join forces to oppose EU ETS, threatening taxes or charges on EU airlines in retaliation

China and Russia join forces to oppose EU ETS, threatening taxes or charges on EU airlines in retaliation | China,Russia,CATA

Thu 29 Sept 2011 – Russia and China have agreed to work together in opposing the inclusion of their airlines into the EU Emissions Trading Scheme (EU ETS). The two powers issued a joint statement on Tuesday saying the inclusion breached the Chicago Convention and the sovereignty of other states, and undermined “booming” international cooperation on addressing climate change. They say they will each develop their own response and “reciprocal measures” if the EU does not change its position. A Chinese government official said this could include imposing punitive taxes or charges on EU carriers serving the country. Speaking at the Greener Skies conference in Hong Kong on Tuesday, the Director General of the China Air Transport Association (CATA), Wei Zhen Zhong, said the “illegal” EU policy risked triggering a trade confrontation.


In their statement, China and Russia said addressing climate change was of high importance and the sustainable development of civil aviation was also important and necessary. They resolved to work together on tackling aviation emissions “appropriately through ICAO and in the framework of [the] United Nations Framework Convention on Climate Change as the main channel.”


Aimed at Europe, they opposed any unilateral and mandatory actions without mutual agreement between concerned states. The inclusion of aviation by the EU into its ETS, they say, “breaches provisions of [the] Chicago Convention and relevant resolutions of [the] ICAO Assembly, violates sovereignty of other states, and will undermine the booming international cooperation on addressing climate change and will impose rather adverse impact on international aviation.”


The two sides have agreed to work together further on the issue and “to consider developing national measures to address [the] EU ETS respectively, inter alia, reciprocal measures.”


Asked to clarify what reciprocal measures were under consideration, a Chinese government official told GreenAir Online that one such measure was a “punitive” charge or tax on EU airlines.


China and Russia invites other concerned countries who share their position to join them in urging the EU to reconsider its position and to address the issues through ICAO and UNFCCC, “and to avoid impairing the growth of international aviation.”


This week, a meeting of developing countries convened by the Indian civil aviation authority (DGCA) is taking place in Delhi to also discuss what action should be taken to oppose the EU ETS.


CATA DG Wei Zhen Zhong told delegates to the Greener Skies conference in Hong Kong that the Chinese government had attached great importance to tackling climate change and the Civil Aviation Administration of China (CAAC) had issued energy efficiency guidelines to airline operators. By 2020, he explained, energy consumption and CO2 emissions per RTK unit output should be cut by 22% compared with 2005, “so that they will be up to the level of aviation-developed countries.”


He pointed to savings in 2010 of 158,000 tons of CO2 emissions through trial operations of using ground power rather than aircraft APUs. Air routing efficiencies on more than 250,000 operations had shortened flight distances by 10.8 million kilometres, saving 58,000 tons of fuel and cutting CO2 emissions by 183,000 tons.


“Carriers in China are taking every possible step in the whole air transportation process to minimise emissions, including active exploration and research in using biofuels,” he said.


Wei devoted much of his speech to denouncing the EU ETS. “It is a totally unilateral measure in violation of international laws,” he said. “We resolutely oppose such an action because we cannot accept it all.”


He added: “It is a serious encroachment on the sovereignty of other countries. It also goes against the rules governing air charges and taxation specified in the Chicago Convention. At the same time it does not meet the basic principles specified in the UNFCCC and the Kyoto Protocol.”


He said 31 Chinese carriers will be included in scheme with ten of them, excluding those from Hong Kong or Macua), currently operating scheduled passenger or cargo flights. He identified Air China, China Eastern, China Southern and Hainan Airlines as being the most affected, estimating overall EU ETS costs of around RMB800 million ($125m) in 2012 alone and RMB3 billion ($470m) in the period to 2020.


Wei said that the EU had turned “a blind eye” to the interests of developing countries and had disregarded “the friendly support” offered by Chinese airlines and others to the EU aviation industry. “It can be expected that once the EU enforces its illegal policy, detrimentally to others without benefiting itself, it will inevitably incur countermeasures from governments on the impaired side, thus triggering a trade confrontation, which none of us would like to see.”


Active preparations were taking place, he said, by CATA and its members to start legal proceedings on the issue.


“The Chinese air transportation industry has always held that addressing climate change is the common responsibility of all industries and all countries in the world,” maintained Wei. “The problem of energy saving and emissions reduction in the scope of international aviation should be dealt with through consultations by governments of all countries and all members in the industry in order to work out a global objective and seek ways of reaching unanimity and common solutions.”


During the conference, Mary Veronica Tovšak Pleterski, the European Commission’s European and International Carbon Markets Director, told GreenAir that discussions with China over the EU ETS were still ongoing. She repeated Europe’s willingness to consider equivalent measures taken by third countries such as China that would enable exemption from the system of flights by all airlines departing from China to Europe.




China-Russia joint statement (pdf)

English translation of Mr Wei’s speech at Greener Skies (pdf)

China Air Transport Association

Greener Skies conference



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