China’s airlines are refusing to participate in the European Union’s cap and trade program, which went into effect for airlines on January 1.
Other Asia Pacific airlines will go along with the EU’s new rules, saying they will pass any costs to passengers.
As of January 1, airlines that use EU airports (fly in or fly out) are required by law to participate.
Although US airlines recently lost their legal challenge to the rules, which were upheld by Europe’s highest court, Chinese airlines are considering legal action, and Australian airline Qantas Airways says it’s will take action.
CATA, China’s airline trade association estimates participation in the EU program will cost Chinese airlines $123 million in the first year and more than triple that by 2020, reports Reuters.
But that’s only if they produce lots of greenhouse gas emissions. The program, which has been operating since 2005 and covers every other industry in Europe, only results in costs if companies exceed pollution limits. If they are below those limits they can make money by selling their permits to more polluting companies.
The cost is actually expected to be no more than airlines already charge to carry baggage. As an example, US-based Delta Airlines has already added a $3 surcharge each way for flights between the US and Europe.
Singapore Airlines is taking a different approach. It will reduce the costs of participation by improving fuel efficiency and
reducing carbon emissions – exactly what the cap and trade program aims to do.