Foreign airlines that failed to comply with emission curbs in the European Union’s cap-and-trade program must be forced to pay for their pollution, according to the Transport & Environment lobby group.

The environmental group asked authorities in the U.K., the Netherlands and Germany to take steps to ensure airlines from countries including China and India meet their requirements under the EU emissions trading system. Carriers such as Air China Ltd. and Air India Ltd. failed to submit permits to cover their emissions on intra-European flights in 2012, the lobby said in a statement.

“EU countries must enforce compliance with the ETS in a consistent and fair manner,” said Bill Hemmings, aviation manager at Transport & Environment in Brussels. “No enforcement means offenders gain a competitive advantage over those that did play by the rules and foreign governments receive a signal that complying with EU law is voluntary.”

The inclusion of aviation in the EU carbon market, the world’s biggest, sparked opposition from countries including the U.S., India, China, Russia and Brazil, which said any curbs on discharges from airlines should be regulated by an international agreement. To facilitate global talks on such a deal the EU agreed to freeze emissions-trading obligations for flights into and out of Europe and keep them only on flights within the region. The program originally covered the entire length of flights originating or ending at EU airports.

The deadline for submitting allowances to cover 2012 emissions expired on April 30, 2013. Airlines responsible for 98 percent of emissions under the ETS complied with their obligations, according to the European Commission.

Shortfall Fines

Emitters that fail to surrender the required number of permits face fines of 100 euros ($137) a metric ton of carbon, according to EU law. Member states can also decide to impose other forms of penalties. Airlines were given emission allowances making up 85 percent of the industry cap for free and have to buy the rest at government auctions or purchase them from other participants in the system.

EU governments and the European Parliament aim to reach a decision next month on the shape of the ETS for aviation from 2013. The European Commission proposed that the freeze on foreign flights be extended into 2013. From this year until 2020 limits on emissions from international flights would apply only to the portion of trips within the bloc’s airspace.

The Parliament wants to limit the concessions and shorten to 2016 the period where pollution curbs would apply only in European airspace. Such a move is meant to keep pressure on countries worldwide to agree a deal to cut emissions from the industry in 2016.

Member states including the U.K. have said they prefer extending the freeze on foreign flights, possibly until 2020. The next round of negotiations between the Parliament and governments on the final version of the law is set for March 4.

Editors: Rob Verdonck and John Deane.

To contact the reporter on this story: Ewa Krukowska in Brussels at ekrukowska@bloomberg.net. To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net.

Tags: eu
Photo Credit: Air China plane touches down on the run way. Simon Clancy / Flickr