Airbus Head Fears for Global Trade Conflict over EU Carbon Tax

Continuing disagreements between policy administrators in the European Union (EU) and heads of the global aviation industry could threaten the operations of airlines both inside and outside the EU, according to Thomas Enders, the Chief Executive of Airbus.

Speaking from Singapore, ahead of the 2012 Singapore Air Show, Enders was quoted in an AFP report as saying he was worried about the consequences of the EU's Carbon Tax programme.

Essentially, the program allots a certain number of carbon emission certificates to all airlines flying in and out of the EU. Each certificate allows the airline a certain amount of emission and, naturally, these certificates will be limited. Therefore, if an airline exceeds its allotted amount of emission, they will be forced to purchase extra credits from other airlines who have them to spare.

"I have seen the position in China, in Russia, in the US, in India, and what started as a scheme to present a solution for the environment has become a source of potential trade conflict," Enders added.

The EU enforced the tax unilaterally from Jan.1. The proposal, however, has met with resistance from a number of countries, including China, India and the United States. They claim it violates international law. The EU, on the other hand, claim the programme is aimed at helping the region achieve its goal of cutting emissions by 20 percent by 2020.