Wednesday, January 4, 2012

Can China Refuse to Participate in EU ETS?

Cai Habo, deputy secretary-general of the China Air Transport Association (CATA), announced today that Chinese carriers will not cooperate with EU emissions officials and will not surrender the required emissions permits or pay the monetary penalties for non-compliance. See Jonathan Watts, Chinese Airlines Refuse to Pay EU Carbon Tax, The Guardian, Jan. 4, 2012 (available here). It remains to be seen how the EU will respond. Aside from the dramatic step of banning Chinese carriers from EU airports, it is not clear how the EU can force China to participate. Though the ETS is now in effect for airlines, at present EU officials are only calculating aircraft emissions; carriers will not receive the bill for this year's emissions until early next year. This mitigates somewhat the need for an immediate resolution to the standoff between the EU and China. However, EU officials will soon need to determine how far they are willing to go to ensure compliance, as legislation similarly prohibiting U.S. carriers from participating in the EU scheme is under consideration by the U.S. Senate.

January 4, 2012 | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 3, 2012

Airlines Slow to Participate in EU Carbon Market

As it is now 2012, the aviation industry is officially required to participate in the EU ETS. An article today from Reuters Africa suggests that patience will be necessary when attempting to evaluate the impact of this new regulation on the aviation sector. See Jeff Coehlo and Ben Garside, Legal, Economic Concerns Mute Aviation CO2 Trade, Reuters Africa, Jan. 3, 2012 (available here). According to the story some carriers have already begun purchasing permits, but many, especially non-EU carriers, remained cautious given the possibility of future legal challenges and diplomatic stand-offs over the scheme. The recent collapse of the price of permits as a result of ongoing economic troubles further complicates the decisions facing the newest ETS participants as to how best to proceed with their new obligations under EU law.

January 3, 2012 | Permalink | Comments (0) | TrackBack (0)