Russia, China and the US, along with several other nations, gathered in Moscow on February 22, 2012, to discuss retaliatory measures against the European Union for imposing the Emissions Trading System on the aviation industry, signalling a descend into a trade war that was predicted and feared by industry experts.
According to the Association of European Airlines (AEA), the more than 20 nations represented in the meeting agreed on a “joint declaration and a series of suggested retaliatory measures to be used against” the EU. A draft minutes of the meeting reportedly seen by Reuters states that possible scenarios include issuing a formal complaint at the United Nation’s International Civil Aviation Organisation (ICAO) level, banning national airlines from participating in the scheme, ceasing talks with European carriers on new routes and even retaliatory taxes on European airlines.
At a press conference after the declaration was adopted, Valery Okulov, Russia’s deputy transport minister, said: “Every state will choose the most effective and reliable measures that will help to cancel or postpone the implementation of the EU ETS.”
Ulrich Schulte-Strathaus, AEA secretary general, responded: “This situation is totally unacceptable. We urgently need both sides to focus on the core objective – managing global aviation emissions – rather than on winning a battle of sovereignty.
“It is not right to attempt to force the EU to change their law. Nor is it right to impose European standards on the rest of the world,” he added, referring to the opinion that a global solution with the ICAO would be the best way forward.
Though the issue has been stirring up controversies since it started, it was intensified earlier this month when the Chinese government banned its carriers from taking part in the programme (see story here), forcing the EU to respond.
Isaac Valero-Ladron, spokesperson for the European Commission’s Climate Action, though condemning the drastic step taken by China, stated that the law can be amended if an international initiative is reached at the ICAO level (see story here).
This intense row between the EU and non-EU nations over the ETS hardly comes as a surprise as it was foreseen by industry experts (see story here). The Association of Asia-Pacific Airlines (AAPA) said: “Recognising the EU rule is challenging the sovereignty of states, various governments around the world opposed to the EU ETS are now evaluating what sanctions can be taken against the EU with the likelihood of a trade war ahead.”
Tony Tyler, director general and chief executive of the International Air Transport Association (IATA), also said: “The unintended consequences of the unilateral and extra-territorial approach go beyond market distortions to states seeing this as an attack on their sovereignty. Airlines from Europe may face some retaliatory action.”
From January 1 this year, the ETS was extended to the aviation industry, obliging all carriers flying in, out and within Europe to pay for their emissions through the use of carbon permits. Although the scheme is already in place, airlines will not have to foot any bills until 2013. For more information on the ETS, click here to read our in-depth feature from the Business Traveller Asia-Pacific January/February issue.