EU refuses to budge on emissions legislation

Brussels: The European Commission has refused to blink on a planned pollution tax on airlines, due to become effective 2012, in spite of the United States and China breathing down its neck over the issue. There are reports that China has put a large Airbus order on ice as a clear hint that it will use its huge economic clout to influence the issue.

There were expectations that Hong Kong Airlines would announce a $3.8 billion contract for the purchase of 10 A-380 superjumbo aircraft from Airbus at the Paris Air Show. The order never materialised, leading to suspicions that Beijing blocked the order as a retaliatory response to EU inflexibility on the matter.

Isaac Valero Ladron, spokesman for EU climate action commissioner, Connie Hedegaard, said, "I cannot comment on internal dealings between Chinese authorities and companies."

"Whatever the Chinese or the Americans are saying, there is no Plan B -- we don't intend to back down," he said.

The row has gained urgency for carriers as companies will be told in September of emissions allowances post-2012 based on past pollution data forcing airlines to pay for their pollution. The legislation, adopted in 2008, is to enter into force on January 1, 2012.

Based on data collected from the period 2004-6, companies get a fixed emissions allowance and then will be expected to bid for the remaining 15 per cent of the available polluting rights, which will be the annual equivalent of 200 million tonnes of carbon dioxide.