Feb. 14 - EU refuses to suspend airline carbon tax, but willing to be flexible if global agreements on emissions can be reached. Arnold Gay reports.
RESENDING WITH NEW SOUNBITE FROM COMAC VP, AND LATEST CHINA-EU SUMMIT VIDEO ADDED. Airlines fear it could spiral out of control, but the EU says there's no turning back. Europe's Transport Commissioner Siim Kallas insists its mandatory system for regulating airline emissions will go ahead, despite growing opposition from at least two dozen countries, including China and the U.S. (SOUNDBITE) (English) EU TRANSPORT COMMISSIONER , SIIM KALLAS, SAYING: "If you think that Europe will be forced to suspend, this is not the case. This is not the case. Europe will implement its system with difficulties, with conflicts, court cases, whatever, but system will be introduced." Beijing has already ordered its airlines not to pay the carbon fees, threatening to escalate the issue into a full-blown trade war. In a signal of its displeasure over the EU plans, China delayed the final signing of a deal for 10 A380s worth $4 billion last year. The head of the International Air Transport Association (IATA), Tony Tyler, says airlines are being pushed into a difficult position. (SOUNDBITE) (English) IATA DIRECTOR GENERAL, TONY TYLER, SAYING: "The Chinese move to prevent its airlines from taking part in the European emissions trading scheme is a very bold move. And in its course it has pushed Chinese carriers very much into the front line of this particular dispute, and placed them in a very difficult position." Chinese plane manufacturer COMAC is the latest to voice opposition, with vice president Wu Guang Hui saying COMAC does not support the scheme. (SOUNDBITE) (Mandarin) COMAC VICE PRESIDENT, WU GUANG HUI, SAYING: "As aircraft manufacturers and airlines we hope that there won't be an ETS (emission trading scheme), I think even Airbus and Boeing will agree with us and not be supportive of the scheme." The dispute may also hamper efforts by the EU to seek China's help for funds to tackle Europe's debt crisis. The region's debt is top of the agenda at the on-going China-EU summit in Beijing. Transport Commissioner Kallas says the EU is willing to be flexible, but says this must mean agreement on global targets for reducing CO2 emissions. (SOUNDBITE) (English) EU TRANSPORT COMMISSIONER , SIIM KALLAS, SAYING: "European Union is ready also to be flexible. Concerning that this flexibility doesn't mean that to simply abandon our system, or suspend our system. But the flexibility means that there will be a global targets, there will be a global ambition to reduce CO2 emissions." Analysis by Thomson Reuters Point Carbon shows airlines face a carbon pollution bill of $670 million (505 million euros) for 2012, under Europe's Emissions Trading Scheme (ETS). Arnold Gay, Reuters.