The European Union on Tuesday warned Chinese and Indian airlines that they risked "penalties" for defying the bloc's emission trading scheme by refusing to state how much carbon dioxide (CO2) they produced last year. India and China are among the nations opposed to the EU extending its emission trading scheme (ETS) to aviation. Starting this year, the bloc is forcing foreign airlines serving EU destinations to stock up on CO2 permits.
As part of the ETS rules, airlines were meant to report to national authorities in the EU countries in which they operate on how much CO2 they produced last year. The deadline was March 31. Companies from countries such as the US and Russia, which also oppose the ETS extension, all complied with the requirement, while there was "systematic non-reporting" from Chinese and Indian airlines, the European Commission said in a statement.
Eight of the violators came from China and two from India, EU Climate Commissioner Connie Hedegaard said at a press conference. They have been given until "mid-June" to fall back in line, she added. If they still refuse, national EU authorities can apply "penalties," Hedegaard said, without going into specifics. "There are different penalties in different states, that varies."
The EU says it was forced to act unilaterally on curbing aviation CO2 emissions after years of talks on a global deal proved inconclusive. But Hedegaard said Tuesday that the bloc was prepared to give negotiations one last shot, pointing to a meeting next month of the International Civil Aviation Organisation. An international deal would solve the confrontation with China, India and others.
"Nobody would be happier than the European Union if we could achieve" a global solution, the commissioner said. Hedegaard also announced that emissions from the over 12,000 power plants and factories covered by the ETS last year fell by more than 2 per cent to 1.9 billion tonnes of CO2-equivalent. But critics say that the EU's scheme could achieve much stronger reductions if the problem of oversupply of emission permits could be addressed.
During 2008-2011, there were "more than 900 million more allowances" circulating than industry actually needed to comply with EU CO2 targets, the commission acknowledged in its statement. Hedegaard said the EU executive would propose corrective measures for the next period of ETS trading, stretching over the next eight years, "before the summer recess," hoping that governments could approve them before the end of the year. Hedegaard suggested limiting the supply of new CO2 permits at the start of 2013-2020 period, but warned that more radical measures, such as withdrawing permits altogether from the system, might be warranted. In recent months Poland, which relies on CO2-intensive coal for its energy supply, has emerged as a leading opponent of stricter ETS policies.