France Calls For Compromise On ETS

April 5, 2012

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The French government has urged the European Union to revisit the Emissions Trading Scheme that has drawn criticism from countries including the United States, Russia, India and China and threatens to hurt the bloc's aerospace industry.

The EU must make every effort to find a solution acceptable to countries outside the region, French Prime Minister Francois Fillon said in a letter to European Commission President Jose Manuel Barroso late last month.

The carbon charge took effect on January 1 and requires all airlines flying to and from EU airports to buy permits under the bloc's Emissions Trading Scheme (ETS) as part of measures designed to help tackle climate change.

China has already suspended aircraft orders from European plane maker Airbus worth USD$14 billion in a row over the scheme. Fillon said Airbus, Air France and engine maker Safran warned 2,000 jobs were at risk.

"This situation is causing strong concerns among companies," Fillon said in the letter dated March 22.

"It seems absolutely vital that the EU... deploy every effort necessary to find mutually acceptable solutions with the third-party countries," he added.

Fillon called on the EU Commission to hold talks with the countries opposed to the carbon levy to push for an international agreement under the United Nations' International Civil Aviation Organization (ICAO).

At the same time, Fillon called for the EU to fight back with "appropriate measures" if its companies become the target of discriminatory moves.

A Commission spokesman said on Thursday that he could not immediately comment.

In the past, it has repeatedly said it would modify its law provided the ICAO could deliver a viable international scheme to curb rising emissions from the airline sector. It has said it was driven to imposing a carbon charge after more than a decade of talks at the ICAO had failed to come up with a plan.

Europe's highest court found the EU's law was valid in December last year.

On March 28, a group of US airlines dropped a private lawsuit challenging the carbon levy, calling on the US government to take over the issue.