British Airways has demanded the European Union restrict the emissions trading scheme (ETS) for airlines to European airspace to head off growing opposition from non EU-governments and carriers.
BA head of environment Jonathon Counsell said: "There is a high risk of non-compliance and retaliation and we have to find a way through.
“BA supports emissions trading. An appropriately implemented European ETS can be a first step towards a global approach. But this is inappropriate.
“Twenty countries have signed up to oppose the scheme, led by China, India, Russia and the US. India stated last week that if any penalties were imposed on its airlines [for non-compliance] it would ban EU carriers from India."
Counsell told an aviation seminar in London organised by the Westminster Energy, Environment and Transport Forum: "If we carry on as we are, ETS will collapse.
“The EU began talking about amending the scope of the scheme to flights that take off and land in the EU six weeks ago."
He said BA favours a different approach out of the three that appear possible: an intra-Europe scheme, an outbound-only ETS or a scheme restricted to EU airspace.
Counsell said: “We favour 'EU airspace'. This would address the main concern of non-EU airlines about the right of the EU to levy charges outside European airspace.
"It would keep other airlines in the scheme and we believe it could be applied quite easily. That is what we are pushing for."
He said restricting the ETS to EU airspace would reduce the scope of the scheme by 40%. “But it would preserve the scheme."
Counsell added: “Anything non-EU airlines do to comply and mitigate emissions in EU airspace would apply for the whole flight."
However, BA's head of environment also argued European carriers should be entitled to compensation for penalties imposed on them outside Europe from opponents of the scheme and for the costs of emissions trading if rival carriers are excluded.
Counsell said: “We are looking for protection from retaliation and compensation if we face charges for emissions that others do not.
"Every EU state will earn revenue from the auction of carbon allowances. The UK government estimates it will raise £130 million in the first year. Why not use that for compensation?"
He dismissed a suggestion that a localised emissions scheme could contribute effectively to cutting greenhouse gases. Counsell said: “No manufacturer is going to produce aircraft just for UK airlines. It has to be a global scheme.”
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