April 5, 2012 / 10:44 AM / 5 years ago

France calls for compromise on EU carbon levy

An Emirates airlines Airbus A380 comes in for landing over the roof of the Beijing Capital International Airport's train station March 6, 2012.David Gray

PARIS (Reuters) - The French government has urged the European Union to revisit a controversial carbon levy that has drawn criticism from countries including the United States, Russia, India and China and threatens to hurt the bloc's aerospace industry.

The EU must make every effort to find a solution acceptable to countries outside the region, French Prime Minister Francois Fillon said in a letter to European Commission President Jose Manuel Barroso late last month seen by Reuters.

The carbon charge took effect on January 1 and requires all airlines flying to and from EU airports to buy permits under the bloc's complex Emissions Trading Scheme ETS.L as part of measures designed to help tackle climate change.

China has already suspended plane orders from European planemaker Airbus EAD.PA worth $14 billion in a row over the scheme. Fillon said Airbus, airline Air France (AIRF.PA) and engine maker Safran (SAF.PA) warned 2,000 jobs were at risk.

"This situation is causing strong concerns among companies," Fillon said in the letter dated March 22.

"It seems absolutely vital that the EU ... deploy every effort necessary to find mutually acceptable solutions with the third-party countries," he added.

Fillon called on the EU Commission to hold talks with the countries opposed to the carbon levy to push for an international agreement under the United Nations' International Civil Aviation Organization ICAO.L.

At the same time, Fillon called for the EU to fight back with "appropriate measures" if its companies become the target of discriminary moves.

A Commission spokesman said on Thursday that he could not immediately comment.

In the past, it has repeatedly said it would modify its law provided the ICAO could deliver a viable international scheme to curb rising emissions from the airline sector. It has said it was driven to imposing a carbon charge after more than a decade of talks at the ICAO had failed to come up with a plan.

Europe's highest court found the EU's law was valid in December last year.

On March 28, a group of U.S. airlines dropped a private lawsuit challenging the carbon levy, calling on the U.S. government to take over the issue.

Reporting by Patrick Vignal; Additional reporting by Barbara Lewis in Brussels; Writing by James Regan; Editing by Christian Plumb

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