China, EU Continue Playing 'Chicken' Over ETS

As January 1 comes into view, neither side in the stand-off over a controversial new European carbon tax shows any sign of backing down. Europe's new Emissions Trading System, or ETS, would charge flights arriving in the EU's jurisdiction a fee for their carbon dioxide emissions, even for portions of the flights outside Europe. The US, China and two dozen other nations say that violates a 1944 treaty which gives all nations exclusive authority over their domestic airspace.

Reuters reports that Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines announced Wednesday that they will jointly sue the EU over the tax. The move follows a joint action taken by the Air Transport Association of America, American Airlines and United/Continental to block ETS from taking effect, which was rebuffed in the High Court in London last year.

In comments to Reuters, Cai Haibo, deputy secretary general of the China Air Transportation Association, commented, "It's unfair. We are buying Airbus planes. If anyone is to blame for the emission problem, it should be the manufacturer not the customers." (China Eastern A300 pictured.)

The Chinese government has previously warned Europe it might cancel orders from Airbus, in which some EU nations are stakeholders, if the Europeans tried to impose ETS on Chinese flights.

Airbus's own forecasts suggest it plans to sell China about 2,000 new airliners over the next 20 years, but so far it's not backing down on the new tax.

FMI: http://ec.europa.eu/clima/policies/ets/index_en.htm