Canada not on board flight emissions trading plan

The federal government has vowed to keep up its fight against the European Union's emissions trading scheme that could cost Canadian and international airlines billions of dollars in EU airspace emissions fees.

Yet emboldened by the European Court of Justice's Dec. 21 decision, the European Commission told airlines to get ready for the new law, sparking fears of an international trade war.

"At this time of economic uncertainty, actions should not come at the price of international aviation, which plays such an important role in all of our economies," Transport Minister Denis Lebel wrote in a Dec. 8. letter to Slim Kallas, vice-president of the EU Commission for Transport.

"I've listened closely to the concerns expressed by Canada's industry and have concluded that taking scarce funds from the sector in the current economic climate would not be the best route to achieving emissions reductions," he continued.

Lebel also emphasized Canada's opposition to the EU's "unilateral" approach to tackling emissions in the airline industry.

He urged his European counterpart to abandon the plan and to join the international community in developing a global approach for tackling emissions in the airline industry under the auspices of the International Civil Aviation Organization, a UN agency. Action plans from ICAO members are expected in June.

On Dec. 21, the European Court of Justice rejected the legal challenge by U.S., Canadian and international airlines that called the EU proposal a violation of several international aviation agreements by imposing unfair penalties on non-EU carriers.

Under the EU scheme, all airlines, regardless of their country of origin, would have to pay for 15 per cent of the polluting rights accorded to them in 2012, the figure then rising to 18 per cent between 2013 and 2020.

Airlines say the move would cost them billions of dollars.

Canada is joined by 26 countries, including the U.S., China, Brazil and India, which signed a joint-ICAO declaration in September opposing the plan. They also urged the EU to join the international community to develop a global emissions plan.

Upon hearing the decision, the National Airlines Council of Canada expressed its "disappointment," saying it will begin talks with the Canadian government and other aviation powers "in earnest," NACC president George Petsika told Postmedia News.

"That's what we do in a free and democratic society," he said.

Charging fees for non-EU planes flying in EU airspace is "illegal under international law because emissions produced in international air space over high seas, that territory does not belong to the EU," Petsikas said. "This violates the principles of sovereignty under international law."

Echoing Lebel's earlier position, Petsikas said the matter should be brought before the ICAO.

Last month, the ICAO urged the EU to exclude foreign carriers from the new rules.

"All parties should agree to a global approach, not just one country or one territory, not just the EU dictating the rules of other countries," Petsikas said.

Meanwhile, a trade war could soon be on the horizon after strong language from both sides.

The European Court of Justice defended the EU's approach as "valid," and that it "infringes neither the principles of customary international law at issue nor the Open Skies Agreement" covering trans-Atlantic flights.

Non-EU airlines could "choose" whether to make commercial flights to and from EU airports, the court said.

"After crystal clear ruling today, EU now expects U.S. airlines to respect EU law, as EU respects U.S. law," EU climate change commissioner Connie Hedegaard wrote on Twitter.

Earlier this month, the U.S. voiced threats of reprisal should the EU move forward with the program.

In a Dec. 16 letter to EU officials, U.S. Secretary of State Hillary Clinton listed 43 nations also opposed to the EU proposal.

"Halt or, at a minimum, delay or suspend application of this directive," she wrote. "Re-engage with the rest of the world. The United States stands ready to engage in such an effort. Absent such willingness on the part of the EU, we will be compelled to take appropriate action."

In October, the U.S. House of Representatives passed a bill directing the U.S. government to forbid American carriers from taking part "in any emissions trading scheme unilaterally established by the European Union."

Underscoring the potential for a significant trade row, in early in June, China blocked an order by Hong Kong Airlines for billions of euros worth of Airbus aircraft.

But it's not only non-EU parties that are worried about the new law: European airlines also have expressed fears of a damaging trade war.

SNonato(at)postmedia.com

Twitter.com/SheilaNonato

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Source: http://feeds.canada.com/~r/canwest/F56/~3/hchQzGe_ZbY/story.html

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