Russia leads attack against EU airline CO2 law

By Gleb Stolyarov

MOSCOW - Russia has joined countries considering tit-for-tat legislation to counter a European Union law that forces airlines to pay for carbon emissions, its transport minister said on Tuesday at the start of a Moscow meeting of countries opposing the EU scheme.

Since the start of this year, all airlines using EU airports have to buy permits under the EU Emissions Trading Scheme, which has prompted international outage and threats of a trade war.

Russian Transport Minister Igor Levitin told transportation officials from 26 countries that Russia "shared the position" of China and the United States in opposing airlines' involvement in European emissions trade.

U.S. legislation has stopped short of banning airlines from taking part, although it made clear participation would be under protest.

China's central government State Council, or cabinet, earlier this month said all airlines were barred from taking part - unless they received government approval to do so.

"We believe that market measures to introduce levies on greenhouse gas emissions and other decisions on environmental protection should be agreed by all sides after achievement of a consensus, within ICAO," Levitin said in remarks released by the Transportation Ministry.

The U.N.'s International Civil Aviation Authority (ICAO) has been suggested as a forum to resolve the dispute over the EU law.

Levitin said Russian carriers had already taken steps to reduce aircraft emissions, including multi-billion dollar investments to swap out Soviet-built craft and make new Boeing and Airbus planes the mainstay of their fleet.

The two-day meeting, attended by representatives of ICAO and the International Air Transport Association, was due to discuss counter-measures ranging from a formal dispute at the ICAO to blocking legislation banning airlines from participating in the EU scheme to retaliatory fees for EU flights.

Other measures mooted in a draft discussion paper seen by Reuters include halting international aviation talks or other trade discussions between EU and non-EU states and denying EU states any requested new routes.

The 26 nations gathered in opposition to the law argue that the EU, by insisting that carriers pay for emissions along their entire routes, is trying to extend its authority outside its own airspace and violates international trade conventions.

The opponents - a grouping of countries mostly from Latin America, the Middle East, Africa and Asia known as the "coalition of the unwilling" - have held previous meetings and in New Delhi last year issued a joint declaration opposing the EU plan.

A meeting of ICAO in Canada in November adopted a working paper from the 26 objectors urging the EU not to include non-EU carriers in its plan.

The EU said it opted to include all airlines in its scheme only because of ICAO's failure to deliver a global solution to rising airline emissions.

Its law could be modified should ICAO find a solution, but the bloc cannot simply tear up a law approved by all 27 of its member states and endorsed in its highest court in December last year.

Climate Commissioner Connie Hedegaard, speaking in Nairobi, said the EU would stand firm and that the polluter had to pay.

"To get the pricing right so that there is an incentive for a company to pollute less, to be more resource-efficient, to be more energy-efficient, that is part of the key to a more sustainable future," she said.

She reiterated previous comments that the EU was willing to accept "equivalent measures", meaning other ways of curbing airline carbon emissions, if nations could demonstrate they were implementing them.

She also said she would be delighted if after years of dithering ICAO managed to deliver a valid scheme.

"Now they say because of the European legislation, we would like to engage in a global regime. Nobody is happier than the European Union if we could have such a regime," she said.

With the backing of environmental groups, the Commission wants to go further and include shipping in sectors required to pay for its emissions.

In Brussels on Tuesday, financial ministers approved a statement saying the carbon price of global aviation and shipping should "generate the necessary price signals" to help achieve more emissions reductions from these sectors and "generate large financial flows" to help combat climate change.

They also invited the Commission to prepare a "reflection paper" by June on the carbon pricing of global aviation and shipping.

(With additional reporting in Nairobi by Katy Migiro, who works for AlertNet, a humanitarian news service run by Thomson Reuters Foundation. http://www.trust.org/alertnet)

(Additional reporting by Barbara Lewis in Brussels, writing by Melissa Akin, editing by Jane Baird)