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Defending Europe's Airline Levy

INTERVIEW: EU climate commissioner Connie Hedegaard


The European Union’s plans to make airlines pay for carbon dioxide from planes flying to the continent have angered Chinese airlines and unsettled one of Europe’s biggest manufactures.

The airlines argue that such charges require an international agreement, while Airbus maker EADS fears that China might withhold orders for the European-made planes.  

The payments are set to begin in 2012 and will be an extension of the EU’s existing emissions trading scheme, which requires factories to buy permits for every ton of CO2 that they emit above a set level.

In a telephone interview with the Economic Observer, Connie Hedegaard describes the principles of the European scheme and explains how Chinese airlines could be exempt. 

She says that China has consulted the EU about establishing its own scheme for trading CO2 emissions, and hopes that this can eventually be integrated with Europe’s, allowing the market to determine a global price for CO2 generated by factories from Shanghai and Stuttgart.


What are you trying to achieve by including the aviation sector in the emissions trading scheme?

Aviation is one of the fastest industries, and of course, it makes a lot of sense that it should also contribute to solving the global climate problem. For years and years, it was the task of the International Civil Aviation Organization, ICAO, to try and come up with a solution.  At a certain point, we could see that there was absolutely no progress. We didn’t want to introduce a measure that would just be a cost for European airlines.

If China were to introduce equivalent measures would Chinese airlines be exempt from the scheme?

That’s exactly why there is openness in the regulation that the EU made several years back. Of course, the aim here isn’t just to make someone pay. The aim is to get a truly global sector to contribute to solving the global climate challenge.

It’s interesting that China has said it might introduce a “deviation from business as usual” target for the aviation sector of 22%. 

Now we’re having a dialogue with the Chinese authorities on whether whatever they are planning can be seen as equivalent measures.

So Chinese airlines would be subject to the Chinese scheme and European airlines would be subject to the European scheme?

There are still details to be worked out, but the main principle is that if British Airways flies London-Beijing and Air China flies Beijing-London, the same kind of burden must be there.

The same monetary burden?

Yes – so they are treated alike.  Then you have the questions of revenues – could they go back to support some poor countries? We are open to this kind of discussion. If you have equivalent measures then you can be exempt when you land in European airports. 

The EU scheme will take account of the total CO2 emissions generated on a flight from Beijing to London rather than just the part of it within European airspace. Don’t you think that will encourage people to fly to destinations on the edge of Europe?

No. I must say I think that’s a very artificial argument. According to our calculations, on a flight from Beijing to London the added cost will be around eight or 10 euros. I don’t think that European businessmen or Chinese businessmen would make a stopover in order to save eight or ten euros.

If the extra charge isn’t high enough to stop some people from flying then what’s it going to achieve?

The whole idea is to make it attractive to be as energy efficient and climate friendly as possible.

Will your scheme reduce the total emissions generated by airlines within Europe?

If your question is whether this will contribute to making emissions from airlines decline, then the answer is yes, but you should be aware that 82% of the allowances will be given to airlines for free, 15% will be allocated through auctioning and then there is 3% left where you can go in and help specific airlines, for instance, those growing particularly fast.

Will Chinese airlines be able to benefit from this 3%?

There may be some help there. That is, of course, the kind of area in which we want a good dialogue with the Chinese airlines. 

The only countries so far objecting to inclusion in the scheme are China and America?

I cannot give you a list. What I can see is that so far all those countries, including those that you have mentioned, have submitted all the papers that we have required through our legislation. In that respect, everyone has lived up to the standard. 

Looking more broadly at Europe’s carbon trading scheme, doesn’t it benefit manufacturers who create pollution in other countries, like China, and then import their goods onto the continent? 

We’re trying to do many things here. We are also working with the Chinese to try to get China to make international commitments. When it comes to both aviation and shipping, we are trying to discuss with the Chinese corporations in these sectors. That’s on the agenda for the next climate change conference in South Africa.

I note that China is starting six big pilot projects on carbon trade, but I can see from the press today that they want to make it a nationwide system from 2015. 

The Chinese have come to realize that they have to deliver on their CO2 targets and that in order to achieve them they also need to introduce some kind of market system. 

Have you been working with China to help develop a carbon trading scheme?

We have had various exchanges between our experts and I’ll also be discussing it with the Chinese minister. When he last visited Brussels, I suggested that we could also offer to do some of their pilot projects in co-operation because it’s in our common interest - no matter how China organises its carbon trading, we both benefit from making the systems compatible. China has acknowledged that this would be a good idea.

Ideally, you’d want a Shanghai factory to be able to trade CO2 emissions permits with one near Stuttgart?

As a long-term vision, yes - what we want is a global price for CO2. We think that it’s a very interesting step forward that China has included pilot schemes as part of its five-year plan.  Korea is introducing a scheme from 2015, and the same date has been cited in Australia. Needless to say its best if we’re don’t each create a separate system, but instead try to find a common denominator. 

In order to do that, you have to agree on how much CO2 a factory in China is entitled to emit relative to a factory in Europe? 

It’s not a question of how much you can emit. At least, that’s not how we’ve been doing it in Europe. The question at stake is how to create the maximum incentives to manufacture in the most energy-efficient, climate-friendly way.


This interview was taken by Will Bland. It has been edited for brevity.

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