Airbus, airlines urge EU CO2 compromise to avoid retaliation

Airbus SAS and Europe’s biggest airlines called on the European Union to find a compromise on aviation carbon curbs, warning that the EU emission limits on foreign carriers could lead to increased retaliation.

The world’s biggest maker of civil aircraft and eight airlines including Air France-KLM, Deutsche Lufthansa AG and British Airways urged European leaders to “use their influence” and push for a global agreement to tackle emissions from the industry and avoid an escalating trade conflict, according to a letter sent to the prime ministers of France, Germany, Spain and the UK.

“The situation is becoming intolerable for the European aviation industry,” according to the letter. “We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions.”

At stake is the first expansion of the EU emissions trading system, or the ETS, beyond European borders. The bloc, which wants to lead the global fight against climate change, decided in 2008 that aviation should become as of 2012 a part of the ETS after airline carbon-dioxide discharges in the region doubled over two decades and international organizations failed to enact pollution curbs.

ICAO should decide

EU emission curbs on flights to and from the region’s airports have triggered opposition from countries including the US, China and Russia, which said Europe should let the United Nations’International Civil Aviation Organization, or ICAO, decide on greenhouse-gas limits for the industry.

The solution to the issue of pollution from aviation “can only be found in ICAO, which has recently appointed a high-level dedicated group to propose a global framework for international aviation emissions by the end of this year,” the chief executive officers of Airbus and the eight airlines said.

The letter follows a meeting in Moscow last month, where officials from 29 nations signed a declaration in protest against the EU law and agreed on steps they may choose to get the European measures either canceled or postponed.

Russia is considering limits on European flights over Siberia, Deputy Transportation Minister Valery Okulov said after the meeting on February 22.

$12 billion in orders

Without a compromise, further countermeasures from opponents of EU carbon limits will risk undermining the region’s aviation industry after China suspended approval for $12 billion worth of orders for Airbus, the company said in a press release today. This will jeopardize more than 1,000 Airbus jobs in Europe and at least another 1,000 in the supply chain, according to the plane making unit of European Aeronautic, Defence & Space Co.

China’s ambassador to the EU said last week it is sensible for Chinese airlines to spurn Airbus planes in favor of models from Boeing over the bloc’s “hasty” decision to impose a cap on aviation emissions. The government won’t dictate the carriers’ purchases, Li Jiaxiang, director of the Civil Aviation Administration of China, said in an interview in Beijing on March 10.

The EU has repeatedly said that while its ETS law enables the exemption of incoming flights from a country if it implements “equivalent measures” to tackle pollution from aviation, the bloc won’t give up the inclusion of airlines in the cap-and-trade program.

All EU governments backed the bloc’s curbs on greenhouse gas emissions from airlines at a meeting of environment ministers in Brussels on March 9, according to Climate Commissioner Connie Hedegaard.

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