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China Threatens To Seize Planes In EU Carbon Tax Row

CHINA yesterday threatened to impound European planes if its own aircraft are seized, in the latest tit-for-tat over the EU’s unpopular carbon emission tax.

Chinese airlines, at the behest of Beijing, have refused to hand over data on their carbon emissions by Europe’s 31 March deadline.

And now authorities have warned they could hold up European flights if the EU tries to punish them for the breach.

EU climate commissioner Connie Hedegaard has said the carriers have until the end of this week to submit their data or face enforcement action such as fines or impounding aircraft.

“Chinese airlines are unanimous on this. We won’t provide the data,” said Wei Zhenzhong, secretary general of the China Air Transport Association, on the sidelines of an International Air Transport Association (IATA) meeting in Beijing.

Wei said China “would try to avoid any trade war”, but is prepared to retaliate if its state carriers – Air China, China Southern Airlines and China Eastern Airlines – are penalised.

The country has already delayed an estimated $14bn of plane orders in protest at the carbon scheme, prompting airlines of all stripes to ask Europe to delay the introduction of the cap-and-trade programme.

China has been the most vociferous critic of the plans to tax polluting carriers, but the US, India and Russia have also hit out at Europe’s plans.

The EU set out in 2009 a scheme to force the aviation sector to monitor and pay tax on carbon emissions by 2012. Firms would be able to trade surplus emissions allowances from 2013 under the current schedule.

But at a time when airlines around the world are battling with soaring fuel costs and dwindling traffic growth, China has asked Europe to push back the start date by a year.

The EU has said it is prepared to withdraw the plan if other countries can come up a suitable global alternative.

“It’s not about the money. It’s an issue of sovereignty,” said Paul Steele, IATA’s director of aviation environment.

City AM, 13 June 2012