The French government is urging the EU to revisit its decision to include aviation in its Emissions Trading System (EU ETS), as opposition continues to build over the controversial scheme. Meanwhile, prices of carbon permits continue to falter, raising questions over the future of the ETS as a whole.
It seems absolutely vital that the EU…deploy every effort necessary to find mutually acceptable solutions with the third-party countries,” French Prime Minister François Fillon said in a letter to European Commission President José Manuel Barroso in late March. The letter, dated 22 March, was made public last week.
The EU rule, which requires airlines to surrender carbon permits for the emissions they produce during all flights taking off or landing in the 27-country bloc, has come under fire by various non-EU governments, which argue that Brussels is exceeding its legal jurisdiction by charging for aviation emissions over an entire flight, rather than just those in EU airspace.
The growing opposition to the measure resulted in over 20 countries agreeing last February on a basket of possible countermeasures. The joint declaration included measures ranging from launching dispute proceedings at the International Civil Aviation Organization (ICAO) to banning airlines from complying with the EU ETS.
India and China have already launched a boycott of the scheme, with New Delhi formally forbidding its airlines from complying with the Brussels plan earlier today, after having asked its airlines last month not to provide emissions data to EU regulators (see Bridges Trade BioRes, 22 March 2012). For its part, Beijing has banned its airlines from participating in the ETS without government approval.
China has also allegedly halted the purchase of US$14 billion worth of orders from European airplane manufacturer Airbus, a claim that has been contested by Chinese officials.
Air France, Airbus, and engine-maker Safran have argued that a global trade war over aviation could destroy 2,000 jobs – a prospect that the French prime minister referred to in his letter.
Analysts suggest that European airlines stand to lose if more countermeasures are imposed. “If Russia imposes overflight charges, that could turn out to be very expensive for European airlines, considering Russia’s airspace is huge,” one person close to the talks told the Wall Street Journal.
Russia has been one of the major opponents of the EU aviation rule, hosting the February meeting where the 20-odd opposing countries agreed on possible countermeasures.
“There is a hellish battle going on behind the scenes,” another senior French official commented in March. “We knew [the inclusion of aviation in the ETS] would provoke strident protests. Now we’re facing real threats.”