EU won't drop aviation CO2 scheme

Mon Feb 13, 2012 12:45am EST
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By David Fogarty

SINGAPORE (Reuters) - The European Union will not bow to pressure to suspend a controversial scheme to charge airlines for their carbon emissions, but is willing to be flexible in finding a solution to a row that threatens to escalate into a full-blown trade war.

The introduction on January 1 of the European Union's Emissions Trading Scheme (ETS) has drawn howls of protest from airlines around the world, with China banning its carriers from taking part.

"If you think Europe will be forced to suspend, this is not the case. We must have a real global solution," Europe's Transport Commissioner Siim Kallas said in an interview on Monday ahead of the Singapore Airshow.

"Europe will implement its system with difficulties, with conflicts, with court cases, whatever, the system will be introduced," he said.

But Kallas acknowledged the growing opposition, particularly from China, the United States and India.

Plane makers, too, said they were increasingly concerned at the potential fall-out on orders unless tensions are defused.

"I am very worried about the consequences of that. What started out as a solution for the environment has become a source of potential trade conflict and that should be a worry for all of us," Airbus CEO Tom Enders told an aviation conference in Singapore.

The emissions scheme levies charges for carbon emissions from European and foreign airlines' flights in and out of Europe. Foreign governments argue the EU is exceeding its legal jurisdiction by calculating the carbon cost over the whole flight, not just Europe.   Continued...