China orders its airlines not to pay EU emissions fee


Opposition to the European Union's Emissions Trading System (ETS) stepped up recently as the Chinese government officially forbade its airlines from paying into the cap-and-trade system when the rules go into effect in 2013.

The Wall Street Journal reports that China's move is the latest among the more than two dozen countries, as well as aviation trade groups, that are opposed to the ETS, which will require airlines to pay for the greenhouse gas emissions from flights entering and leaving European airspace.

There is significant opposition to the plan, which by some estimates could cost the global aviation industry $26 billion by 2020. An analysis from the Environmental Defense Fund published last year suggested that the cost of the surcharges could be $3-$6 per ticket, although an EU estimate suggests the costs could go as high as $16 per ticket for longer flights.

Earlier this year, two airlines, Delta and Lufthansa, began adding fees to tickets for flights to Europe to cover the ETS costs.

Airlines are a flashpoint in the ETS controversy, in part because the European Union's rule affects businesses based outside of the region, sparking concerns about trade rules and agreements. However, aviation currently represents about 3 percent of the world's total emissions and is expected to grow rapidly.

Although aviation as an industry has made some steps to reduce its emissions and has set a goal to cut its emissions by 50 percent by 2050, progress is happening slowly. The EU's rule could help spur more rapid improvements, since airlines and airplane manufacturers will have another financial incentive to cut costs by reducing emissions.