Pressure on European Union to rethink carbon trading scheme

AN apparent move by China to block Airbus deals in retaliation against the European Union`s implementation of the carbon emissions trading scheme to all airlines operating to and from the EU territory has given gumption to Airbus to plead for a rethink by the authorities. The Airbus petition has the support of six European airlines, namely British Airways, Virgin Atlantic, Lufthansa, Air France, Air Berlin and Iberia.

China has already banned its airlines from participating in the scheme – which poses a headache for the EU which has so far shown no willingness to concede although the implementation date was January 1. While the EU could prevent Chinese carriers from landing within its territory, such action would have political ramifications.

The United States is also opposed to the scheme and some other countries too have voiced their displeasure but would comply.

Australian flag carrier Qantas along with compatriot Virgin Australia have already announced a carbon surcharge to be added to the ticket fare, perhaps also largely in preparation for a similar carbon trading scheme to be implemented in Australia by July.

Singapore Airlines chief executive Goh Choon Phong said: `We will comply but we don`t think it is an equitable measure.”

The external protest is now boosted by pressure from within. Airbus and its supporters are citing possible job losses. Airbus chief executive Thomas Enders said: “The measure is threatening more than 1,000 jobs (at Airbus) and another thousand through the supply chain.”

Does the EU have a Plan B or will the issue go the way of reciprocity the way that freedoms of the air have been negotiated? The unfavourable current economic conditions might provide the EU with an excuse – if it needed one – to placate some key trade partners without conceding its objective. But it is slippery ground. To get back up again may be as difficult, especially when the renewed call for a global solution through an international agency is bound to be plagued with differences that can only stall the process.

Doing nothing is an option, as the EU waits and sees.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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