Europe, China heading for Trade Showdown

China said Monday it has banned its airlines from complying with an EU scheme to impose charges on carbon emissions opposed by more than two dozen countries including India, Russia and the United States.
Beijing has said repeatedly that it opposes the new European Union plan, which was imposed with effect from January 1, and which Chinese state media have warned would lead to a “trade war” in the sector.
A statement on the website of China’s State Council, or cabinet, also said airlines were barred from using the EU’s emissions trading scheme (ETS) to increase fares or other passenger charges.
“The Civil Aviation Administration of China recently issued a directive to Chinese airlines that without the approval of relevant government departments, all transport airlines in China are prohibited from participating in the EU ETS,” said the statement.
The EU’s ambassador to China said he hoped the stand-off, which comes a week before Chinese and EU leaders meet in Beijing for a summit, could be resolved through negotiations.
“There are a number of avenues to be pursued — bilateral, multilateral and possibly legal,” Markus Ederer told journalists in Beijing.
“The EU would like to have an international solution to this… That’s the way forward, hopefully through negotiations, (to) find an agreement between all stakeholders.”
China has said it fears its aviation sector will have to pay an additional 800 million yuan ($125 million) a year on flights originating or landing in Europe, and that the cost could be almost four times higher by 2020.
The European Commission argues that the cost for airlines is manageable, estimating that the scheme could prompt carriers to add between 4.0 and 24 euros ($32) to the price of a two-way long-haul flight.
Nonetheless, some airlines have announced new ticket fees since the EU’s rules came into force.
US carrier Delta Air Lines, one of the world’s biggest airlines, added a $6 surcharge for two-way flights between the United States and Europe.
Germany’s Lufthansa indicated it would raise its fuel surcharge, a move taken by Belgian carrier Brussels Airlines, which increased it by 10 euros to 135 euros for international flights and by three euros to 39 euros for EU routes.
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