Air China 737-800. Courtesy, Boeing

Four Chinese carriers—Air China (CA), China Eastern Airlines, China Southern Airlines and Hainan Airlines—are planning to file a lawsuit against the European Union European Trading Scheme (EU ETS), scheduled to take effect Jan. 1.

The carriers have support from the China Air Transport Assn. (CATA), which claims EU ETS would cost Chinese carriers CNY800 million ($123.6 million) annually. CATA said costs would keep rising as flights increase between China and Europe.

CATA DG Wei Zhenzhong said it would choose the “right timing” to file the lawsuit, although he did admit “there is little hope of winning this case within EU legal framework.”

China has joined several countries in opposition to the EU ETS (ATW Daily News, Sept. 29), which will require all airlines flying to/from an EU airport to offset their carbon emissions on these flights, regardless of how long that flight is in EU airspace. Airlines will be required to pay an emissions tax to the EU member state to which they most frequently fly (ATW Daily News, Sept. 27).

CATA is asking for all Chinese carriers not to take part in the EU carbon market trading scheme, not to submit a carbon emission monitoring plan and not to negotiate with EU separately for favorable policies.

CA submitted its carbon emission monitoring report to EU earlier this year. Other Chinese carriers are expected to follow suit if the legal process fails.

Industry analysts say that Chinese carriers will have to increase air fares to offset extra costs imposed by EU ETS, which would probably lead to a reduction of Chinese airlines’ load factor, weakening domestic carriers’ international competitiveness.