China has banned its local airlines from complying with an EU scheme that imposes charges on carbon emissions.

A statement on the website of China’s State Council said airlines would not have to abide by the European Union’s Emissions Trading Scheme (ETS), or increase fares or other passenger charges.

"Without the approval of relevant government departments all transport airlines in China are prohibited from participating in the ETS," the statement said.

Beijing criticizes the EU’s Emissions Trading Scheme for being contrary to relevant principles in the United Nations Framework Convention on Climate Change and international civil aviation regulations.

The Chinese government says it's concerned that the country's aviation sector will have to pay an additional 800 million yuan (125 million euros) a year on flights originating or landing in Europe. It predicts the cost could be almost four times higher by 2020.

The European Union argues that the extra costs for airlines are manageable, estimating that the scheme could prompt carriers to add up to 24 euros to the price of a two-way long-haul flight.

Need to talk

The EU’s ambassador to China, Markus Ederer, said he hoped the current stand-off could be resolved.

"There are a number of avenues to be pursued - bilateral, multilateral and possibly legal," Ederer told journalists in Beijing.

Ederer added the EU was ready to exempt any airline from the carbon charges if equivalent levies were imposed elsewhere to offset their emissions.

Chinese airlines are unlikely to be penalized immediately as carriers have until the end of April 2013 to calculate their annual emissions and buy polluting rights for 2012.

Author: Hardy Graupner (AP, AFP, dpa)
Editor: Zulfikar Abbany