Chinese carriers support Beijing’s decision against joining EU ETS

Chinese carriers are supporting Beijing’s decision to prohibit its airlines from participating in the European Union Emissions Trading Scheme (EU ETS) while still reserving the right to file a lawsuit.

“We are quite supportive of our central government’s decision and we think the real solution should be a global approach through [ICAO],” China Eastern Airlines (MU) chairman Liu Shaoyong said earlier this week. He emphasized that domestic carriers are reserving the right to file a lawsuit against EU ETS.　　

China Air Transport Assn. (CATA) DG Wei Zhenzhong said that “Beijing’s decision reflects Chinese carriers’ wishes and also is quite helpful to protect the real interest of domestic airlines and air travelers.” CATA estimates operating expenses of Chinese carriers will increase by CNY800 million ($127.2 million) annually because of EU ETS. Air China (CA), which operates the most European routes, is expected to see the largest rise in expenses—CNY200 million. MU is expected to follow at CNY100 million.  

Expenses associated with the EU ETS are predicted to keep rising as Chinese carriers open more international routes to Europe to compete with the high speed rail. This year CA is scheduled to launch service to Shanghai-Paris and China Southern Airlines plans to open a Guangzhou-London route.

Wei said that Beijing’s decision was just the first step in the escalating row over the new controversial carbon emissions tax, as Chinese carriers will most likely be suspended from flying to Europe, a consequence of “not joining EU ETS.” As a result, the Chinese government is considering counter measures against the EU ETS with Russia, India, Brazil and other countries.