Airbus ‘Could Lose Chinese Business’ Due to European Carbon Rules

Airbus’ parent company has warned that it stands to lose Chinese business if the European Commission ignores protests from airlines about its European emissions trading scheme, Fox Business reports.

Louis Gallois, the chief executive of Airbus parent company European Aeronautic Defence & Space (EADS) told a conference call to analysts on Thursday that the Chinese government was “putting on hold” approval of 35 wide-bodied Airbus aircraft ordered by Chinese carriers, the website reports.

Gallois said the move could be part of a “commercial war,” and in retaliation for the emissions trading scheme, which China has banned its carriers from taking part in.

The trading program, which obliges airlines to buy carbon credits when flying through European airspace, has been met with disdain by numerous carriers worldwide. In December, United/Continental Airlines and American Airlines saw a legal attempt to block the scheme quashed, while UPS threatened to extend its flights in a bid to circumvent European airspace and avoid buying the credits. Estimates by Thomson Reuters Point Carbon suggest the scheme will cost airlines around €1.1 billion ($1.5 billion) in 2012.

Meanwhile, a report on Friday by the Federal Aviation Administration said that if international objections to the scheme are not resolved, its implementation could increase costs to the aviation industry and cut the funds available for investment in emisisons-reduction technologies.

However, FAA Aerospace Forecast Fiscal Years 2012-2032 also said that the increased costs could hasten the adoption of more fuel-efficient technologies.