The US and Chinese aviation industries have been unhappy with
the EU’s plans since their inception. Their grievances were given
renewed publicity this week when Tom Enders, chief executive of
Airbus, and Steve Ridgway, chief executive of Virgin Atlantic and
chairman of the Association of European Airlines (AEA), sent a
letter to EU climate action commissioner Connie Hedegaard warning
it would be “madness to risk retaliation” from countries such as
China by including their planes within the EU ETS.

Their concerns were reiterated by Willie Walsh, chief executive
of International Airlines Group, at the annual general meeting of
the International Air Transport Association (IATA) in Singapore,
who said that if major powers were forced to pay for carbon dioxide
emitted by services to and from the continent, they could impose
aviation taxes on European carriers or block flights.

Rather than include non-European airlines in the EU’s
cap-and-trade system, Walsh said he wanted a global emissions
trading scheme for airlines and suggested that until this happens,
the EU should introduce a “plan B” that would only charge carriers
for regional and domestic flights.

ETS expansion ‘nothing but a cash grab’ - IATA

Meanwhile, Giovanni Bisignani, IATA’s director general and CEO,
told delegates at the meeting that the EU was “ignoring
international law with its plans to include international aviation
in its ETS. He called the move “a $1.5 billion cash grab that would
do nothing to reduce emissions”.

Hedegaard has refused to give in to these threats. In a strongly
worded letter, she highlighted that 85% of emissions allowances for
aircraft carriers would be allocated for free and said that if the
EU backed down, “it would send an extremely unfortunate signal and
create problems not just for the global climate but also for
European companies and businesses”.

The Carbon Markets & Investors Association (CMIA) insisted
that “in the absence of a market-based proposal from the airlines’
governing bodies, the EU has rightly legislated to bring all
emissions from flights taking off or landing in the EU within the
ETS.”

It added that “if commercially motivated calls from non-EU
airlines operating within Europe to be excluded from the EU ETS
were to be answered, this would run counter to the principle of
equal treatment, destroy environmental integrity and increase
uncertainty within the EU ETS”.

Airbus is scaremongering - transport NGO

Jos Dings, director of the NGO Transport & Environment
(T&E), said that accusations from Airbus and AEA that the
inclusion of aviation in the ETS was a “unilateral tax imposed on
third-country carriers” that “will create a trade conflict with the
world’s most powerful economic and political players” was “industry
scaremongering”.

In a letter published in the Financial Times on Wednesday, Dings
said that the description of a unilateral tax imposed on
third-country carriers “perfectly fits the US international
transportation tax (currently $16.30 a passenger) which applies to
all international flights arriving in or departing from the
US”.

He said that this had been “in place for at least a decade” and
“does not seem to have caused the ‘trade conflict’ predicted by
Airbus”. Moreover, he said the EU ETS “cannot even be described as
a tax because airlines can reduce their exposure by cutting
emissions”.

The EU Court of Justice is likely to be the next body to comment
on the matter - it will hear a legal challenge against the ETS by
the Air Transport Association of America on 5 July.