China has banned its airlines from complying with the ETS imposed by the European Union on Monday. Photo: Airplane-Pictures.net
Civil aviation authorities Monday ordered the nation's airlines not to comply with the EU's Emission Trading Scheme (ETS), sending out China's "most concrete signal of opposition" to the unilateral carbon emission tax scheme.
"China objects to the EU's decision to impose the scheme on non-EU airlines, and has expressed its concerns through various channels," the Civil Aviation Administration of China (CAAC) said in a statement after releasing the directive.
The CAAC said it had been authorized by the State Council to notify all domestic airlines of the order. Under the directive, Chinese airlines are also prohibited from increasing fares or charging items on the grounds of the ETS.
The order came shortly after the scheme took effect January 1, which required international flights departing from or landing at the airports of the bloc's 27 nations to pay for the carbon emissions.
Airlines that refuse to comply with the EU scheme could possibly be fined 100 euros ($131.25) per ton of carbon dioxide or even face a flight ban in extreme cases, but the charges will not be collected until April 30, 2013.
"The ETS has violated the UN Framework Convention on Climate Change and related principles and regulations of the International Civil Aviation Organization," the CAAC argued.
"The statement sends the most concrete signal of China's opposition," said Chai Haibo, deputy secretary-general of the China Air Transport Association (CATA). "It is high time for the EU to rethink its carbon tax scheme and respond in a positive manner."
However, Isaac Valero-Ladron, a spokesman for EU climate action commissioner Connie Hedegaard, said Monday the bloc is not backing down on the issue, and the commission "remains confident" that Chinese airlines will comply with the rules.
"It will be much more costly for any airline not to comply with the legislation than doing so," Valero-Ladron said.
Besides China, other nations have expressed opposition to the scheme, as the carbon cost is calculated over the length of the entire journey, not just within European airspace.
Li Xiaojin, a professor at the Civil Aviation University of China, told the Global Times that the ETS is neither legal under international law nor reasonable for developing nations.
"The EU does not have the right to charge carbon emission fees based on mileage when most of the trip may take place outside EU territory," Li said.
Chai said that CATA reserves the right to take legal action. Several major Chinese companies, including Air China, China Southern Airlines, China Eastern Airlines and Hainan Airlines, were preparing to sue the EU last October for the pending charges they thought unacceptable.
CATA estimated that the ETS will cost Chinese airlines 800 million yuan ($126.98 million) in 2012, which will rise to 3 billion yuan in 2020 and cumulatively 17.6 billion yuan over the next nine years.
"We pledge to impose a global carbon emission tax if the EU continues the ETS, which will be a fairer charge in that all regions are included," Li Qi, a senior advisor of CATA, told the Global Times.
"We expect that the International Air Transportation Association can lead the talks this year and all nations can reach an agreement," Li Qi said.
Markus Ederer, the EU's ambassador to China, said Monday that he hoped the stand-off, which comes a week before Chinese and EU leaders meet in Beijing for a summit, could be resolved through negotiation.
Predicting that the coming negotiations would be tough, Li Xiaojin said a global pact to charge for carbon emissions should be established instead of the EU's unilateral move.
"If the negotiation fails, the worst outcome will be the suspension of air services between China and the EU," Li Xiaojin noted.
The US, Russia, India and Canada, among other countries against the ETS, have also attempted to put in place countermeasures in response to the plan they see as unfair.
On September 27, 2011, Russia's transport ministry and CAAC released a joint statement claiming the EU's move had violated other countries' sovereignty and had an extremely adverse affect on international air transportation.
In October, the US House of Representatives passed a bill banning US airlines from paying the emission charges.
However, the EU Court of Justice ruled on December 21 against the Air Transport Association of America and three US airline companies that had earlier filed a lawsuit against the EU regarding the trading scheme.
Zhu Shanshan and agencies contributed to this story