Airbus chief expresses concern over EU emission charge damaging trade

The European Union’s Emissions Trading Scheme, introduced on January 1, has drawn howls of protest from airlines around the world, with China banning its carriers from taking part.

Airbus chief executive Tom Enders said he was increasingly concerned at the potential fall-out if tensions were not defused.

“I am very worried about the consequences of that. What started out as a solution for the environment has become a source of potential trade conflict and that should be a worry for all of us,” he told an aviation conference yesterday before the Singapore Airshow.

China is a strategic market for the world’s two big planemakers, as it coordinates purchases centrally and regularly places orders with Airbus and Boeing in batches of 100 or more to coincide with high-level political contacts.

Chinese domestic air traffic quadrupled in the past decade and is expected to keep growing at more than seven per cent a year up to 2030, according to Airbus research. Boeing predicts China will be the second-biggest market for new aircraft behind the United States between 2011 and 2030.

China last year delayed the final signing of a deal for 10 A380 superjumbos worth £2bn for Hong Kong Airlines in a sign of its displeasure over the EU plans, and in the mid-1990s, it refused to buy French products such as wheat and Airbus planes in retaliation for France selling fighters and frigates to Taiwan.

Last week, Beijing banned its airlines from joining the emissions scheme without its permission, and threatened to take unspecified measures to defend itself against the scheme, which levies charges for carbon emissions on flights in and out of Europe.

Foreign governments argue Brussels is exceeding its legal jurisdiction by calculating the carbon cost over the whole flight, not just Europe.

EU Transport Commissioner Siim Kallas acknowledged opposition and said he was willing to be flexible in finding a solution but would not suspend the scheme.