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Estimated reading time for this article: 2 – 3 minutes

New FlightGlobal Journo Kirsty McGregor just published an article that rendered me speechless. The EU Commission is threatening that Chinese Carriers might be banned from the EU over the new ETS regulations.

Chinese airlines could be banned from operating to Europe if they persistently refuse to pay charges for their carbon emissions, the European Commission has warned.

The China Air Transport Association, which represents the country’s four major airlines, including flag carrier Air China, is reported to have said that it would not comply with the European Union’s Emissions Trading System (ETS), which came into effect on 1 January.

In response, the European Commission pointed to the ETS directive, which allows for the imposition of an operating ban on any airline which consistently breaks EU law.

The new ETS policy has been a major issue in recent weeks, and I have already covered it here and here. As I wrote:

“We deeply regretted that the United States lost the lawsuit,” China Air Transport Association deputy secretary Chai Haibo told the Economic Observer this week. “China will continue to steadfastly pursue a lawsuit.” In another interview, Chai Haibo made it clear that Chinese airlines don’t plan to pay a dime for the ETS. Deciding not to comply opens China up to penalties, many of them severe. However, the EU may find that the pressure is too much to keep fighting. The USA and India have also announced that they will be fighting the lawsuit, and India’s regulator, the DGCA, has also threatened to publish an executive order banning Indian carriers from submitting Emissions data.

Since this news came out, there has been a lot of speculation regarding a full-fledged trade war between China and the EU, with the USA and India supporting China. This announcement says that the EU is serious about this trade war, by telling the Chinese that if they do what they plan to do (not pay ETS costs), they will be banned.

With the Eurozone Crisis going on right now, financial, political, and aviation analysts alike think that it is economically unfeasible for the EU to take on China. Add India and the USA into the equation, and it seems like the EU is almost guaranteed to surrender. Yet, they keep on pushing on. I, for one, am grabbing some popcorn to see what happens next.

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