EU defies carbon trade war threats

European Union Commissioner for Climate Change Connie Hedegaard at the commission headquarters in Brussels on October 7.

Story highlights

  • EU Commissioner for Climate Change will stand firm on climate legislation despite threat of trade war
  • EU requires all carriers to pay for their carbon emissions from flights arriving or departing within the bloc
  • European aerospace and airline companies face retaliation from foreign governments

The threat of a trade war will not make the European Union back down on climate legislation, Connie Hedegaard, the bloc's climate chief, said on Tuesday following pressure from foreign governments who want the EU to drop plans to charge airlines for carbon emissions.

In an interview with the Financial Times, Ms Hedegaard, the commissioner for climate action, said the bloc was determined to work with the US, China and other nations to reach an international agreement to curb airlines' emissions.

But she also sought to make clear that commercial threats would not sway Brussels, saying: "You can't threaten a trade war just because you don't like European legislation."

The EU's policy to require all carriers to pay for their carbon emissions for flights that take off or land in the 27-member bloc have met with fierce resistance from non-European governments. India is the latest country to consider asking its airlines to defy measure.

Airlines that do not comply can be fined, or -- in extreme cases -- banned from the EU.

The head of Airbus, the European aerospace company, and six leading European airlines last week wrote to political leaders, warning them that they faced retaliation from foreign governments, and urging them to consider a compromise. A person close to Airbus said the Chinese government was blocking aircraft orders worth $14bn.

Businesses outside the aviation industry are also worried about the repercussions of a trade spat, employers' groups have said.

Ms Hedegaard acknowledged the concerns weighing on executives, but asked them to consider the broader EU interest.

"If there is some European legislation you do not like, can you then threaten us?" she asked. "I think most industrialists in Europe understand we can't have that game in the 21st century."

Although the EU legislation took effect in January, airlines will not have to hand over payments for their emissions until April 2013, providing a long window for diplomats to negotiate a solution.

The EU law allows for carriers to be exempted if their national governments take equivalent measures to reduce emissions from their aviation sectors. The bloc has also said it would scrap the plan if there were a comparable international agreement through the UN civil aviation body, known as ICAO.

Asked if a compromise was possible, Ms Hedegaard said: "I'm not going to speculate. What really matters is that we are working as hard as we can to make progress in ICAO."