Feb. 6 (Bloomberg) -- China banned airlines from taking part in a European Union carbon-emissions system designed to curb pollution, saying the program violates international rules.
The system contravenes the United Nations Framework Convention on Climate Change and international civil aviation regulations, the Civil Aviation Administration of China said in a statement cited yesterday by the official Xinhua news agency. Carriers were also barred from using the EU program as a reason for raising fares, it said.
The European Union hopes to resolve the issue through negotiations, Markus Ederer, its ambassador to China, said at a press briefing in Beijing today. India, the U.S. and global airlines have also raised objections to the levy, arguing it will raise costs and be less effective than a global solution.
“I believe all sides will negotiate again and find a solution,” said Chai Haibo, vice president of the China Air Transport Association. “I can’t imagine that the worst case, such as the EU grounding Chinese flights, could happen.”
The airline group has called on the government to oppose the EU levy and it is working on a legal challenge in Germany. Whether the lawsuit will continue will depend on the EU reaction to the China ban, Chai said. The group’s members include China’s big three state-controlled carriers, Air China Ltd., China Southern Airlines Co. and China Eastern Airlines Corp.
A call to Civil Aviation Administration of China wasn’t answered.
The EU added aviation to a wider carbon-trading system on Jan. 1. The move could cost Chinese airlines as much as 800 million yuan in 2012, according to the China airline group.
The dispute could be resolved in a number of ways, including bilateral or multilateral talks, or through a legal ruling, Ederer said. The EU Court of Justice in December upheld the legality of the bloc’s drive to extend the world’s largest carbon cap-and-trade program beyond its borders.
China Southern Chairman Si Xianmin said last week that Europe’s emission trading program is not beneficial in the current economic environment or for Europe’s efforts to escape the sovereign debt crisis. He made the comments at a briefing also attended by German Chancellor Angela Merkel and Chinese Premier Wen Jiabao.
--Jasmine Wang and Nicholas Wadhams. Editors: Neil Denslow, Frank Longid
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