Airlines call for deal to prevent EU trade war

Global airlines yesterday called for a UN-brokered deal to prevent a row over aviation emissions between China and the EU spilling into a trade war.

The call by the head of the International Air Transport Association comes amid signs the EU may soften a unilateral stance that also risks souring efforts to resolve Europe’s sovereign debt crisis with Chinese support.

Director general Tony Tyler said airlines had become wedged between conflicting domestic laws after China ordered its airlines not to join the EU’s compulsory market-based system for regulating airline emissions.

“The Chinese move to prevent its airlines from taking part in the emissions trading scheme is a very bold move and it pushes the Chinese carriers very much into the front line of this particular dispute,” he said.

“This is an intolerable situation which clearly has to be resolved; it cannot go on like this. I very much hope, of course, that we are not seeing the beginning of a trade war on this issue and eventually wiser counsels will prevail.”

China was an early opponent of the EU’s cap-and-trade scheme, which has also drawn protests from the US and India, and the escalating row threatens to hamper efforts to work out an international solution to Europe’s sovereign debt crisis.

By banning its airlines from co-operating last week, China hardened its stance ahead of tomorrow’s Beijing summit at which the EU will seek Chinese help to ease its debt crisis.

The EU says its scheme to charge airlines for emissions on flights into or out of Europe, which took effect on Jan 1, is needed as part of the fight against climate change.

It maintains it was driven to act after more than a decade of inaction at the UN’s aviation standards agency, the International Civil Aviation Organisation (ICAO), which has yet to find a solution to tackling airline emissions.

Tyler said the ICAO’s chambers were the only forum for resolving the row, and he and airline industry officials noted the EU had indicated willingness to avoid further isolation.

“The European Commission is now much more open to an ICAO solution,” he said. “I very much hope that the EU and all its member states will work hard with ICAO to come up with a global solution. It is not going to be easy.”

Last week, the senior EU civil servant responsible for climate action said Brussels preferred multilateral discussion.

“We have been clear that we are willing to review our legislation in the light of agreement on market-based measures being agreed in ICAO,” Jos Delbeke said.

A relative backwater of the UN responsible for industry standards, Montreal-based ICAO is a potential bulwark against the first serious carbon trade war.

It is widely seen as a challenging task for an agency created to oversee neatly bordered airspace, but which must now try to find an urgently needed formula for tackling aircraft fumes that cross international frontiers.

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