The Commercial Aircraft Corp of China (COMAC) signed its first collaboration agreement with Boeing to jointly set up a research center in Beijing to reduce aviation greenhouse gas emissions. The Boeing-COMAC Aviation Energy Conservation and Emissions Reductions Technology Center funded by both companies will support research projects to increase commercial aviation’s fuel efficiency and reduce greenhouse gas emissions, said Jim Albaugh, President and CEO of Boeing Commercial Airplanes. Under the agreement, the companies will collaborate with China-based universities and research institutions to expand knowledge of technologies, including sustainable aviation biofuels. The center will be built at COMAC’s Beijing Civil Aircraft Technology Research Center. Marc Allen, President of Boeing China, said the innovative emission-reduction technologies developed through the new center will advance aviation in China and globally.

China has barred domestic airlines from paying carbon emission taxes imposed by the European Union on flights to and from the EU and says they can’t charge customers extra because of the EU plan. Chinese airlines need government approval if they want to join the emissions plan, which the government has denounced as an unfair trade barrier. “China hopes Europe will act in the light of the broader issues of responding to global climate change, the sustainable development of international aviation and Sino-European ties, strengthening communication and coordination to find an appropriate solution acceptable to both sides,” an official from the Civil Aviation Administration of China (CAAC) told Xinhua news agency. “The Chinese side will also consider taking necessary measures to protect the interests of the Chinese public and businesses based on developments,” the official said. From January 1, the EU began charging airlines using EU airports for carbon emissions based on its Emission Trading Scheme (ETS). The money will not be collected until April 30 next year, however. “It is high time for the EU to rethink its carbon tax scheme and respond in a positive manner,” Chai Haibo, Deputy Secretary General of the China Air Transport Association (CATA), which represents China’s airlines, said. The European Union Ambassador to Beijing, Markus Ederer, defended the charges as consistent with Europe’s efforts to be a “green leader” in curbing climate change and said they treated European and foreign carriers equally.

If Chinese airlines continue to refuse to pay the carbon emissions tax, they could face fines and prohibitions to use of EU airports. “Air China has always opposed the EU’s carbon emission system, which is unreasonable and illegal,” said Lu Lingfei, Deputy Director of the airline’s Planning and Development Department. A total of 33 Chinese airlines will be affected by the tax. It would cost Chinese airlines an estimated CNY743 million this year, or about CNY300 for each ticket for flights between China and Europe, Chai said. About 26 countries, including China, the United States and Canada, have protested the plan but, in December, the European Court of Justice dismissed arguments against the carbon emissions tax from U.S. airlines. The International Air Transport Association (IATA) has criticized the charges as “market distorting.” It says the EU should negotiate through the International Civil Aviation Organization (ICAO) to reach a global agreement. The European Commission said that it would stand by the new rules. “We are not backing down and this legislation will apply to companies operating in Europe,” said Isaac Valero-Ladron, Spokesman for EU Climate Action Commissioner Connie Hedegaard. Russia and India have threatened to ban their airlines from joining the plan and charge overflying fees for every flight out of Europe. Zhang Min at the Chinese Academy of Social Sciences said that if China and the EU fail to reach an agreement, China may adopt countermeasures against the EU.

During the climate change talks in Durban in November, China’s Chief Negotiator Su Wei firmly rejected proposals for a new global treaty on greenhouse gas emissions because they would lead to the end of the Kyoto protocol, the world’s only existing treaty stipulating emissions cuts. Its current provisions will expire at the end of this year. EU member states, with a handful of allies including Norway and Switzerland, are the only developed countries prepared to carry on with the Kyoto protocol. The U.S. has always rejected the 1997 pact, and Japan, Canada and Russia have declared they will not take on new emissions targets under the protocol beyond 2012. The 194-party conference in Durban finally agreed to start negotiations on a new accord that would ensure countries will be legally bound to carry out any pledges they make. It would take effect by 2020 at the latest. The deal doesn’t explicitly compel any nation to take on emissions targets. The legally binding emissions targets under the 1997 Kyoto Protocol, which expire this year, will be extended for at least another five years under the new accord. A separate document obliges major developing nations like China and India, excluded under Kyoto, to accept legally binding targets. UN Secretary General Ban Ki-moon said the deal represented “an important advance in our work on climate change.”

Environmentalists criticized the package for failing to address what they called the most urgent issue, to move faster and deeper in cutting carbon emissions. Scientists say that unless those emissions ― chiefly carbon dioxide from power generation and industry ― level out and reverse within a few years, the earth will be set on a possibly irreversible path of rising temperatures. China welcomed the modest outcome of the UN climate talks. Chief Negotiator Su Wei described the Durban Platform as “a great achievement” after “one of the most drawn-out” experiences he has had in 20 years of climate talks. Beijing successfully secured the existing two-tier system of accountability enshrined in the current UN climate regime, under which developing countries take voluntary actions. Dr Yang Fuqiang, Senior Adviser on climate and energy for the Natural Resources Defense Council’s Beijing office, warned that China would have to be prepared for greater international pressure in future talks as its carbon emissions continued to expand at an accelerating pace.

China is considering imposing an emissions tax by 2015, which will hit the biggest industries that burn fossil fuel and encourage them to invest in carbon-cutting technologies. The Research Institute for Fiscal Science has submitted a new carbon tax proposal to the Ministry of Finance. Director Jia Kang said that to relieve the extra burden on firms, Beijing could consider cutting profit tax. This would encourage polluters to upgrade their technology since the carbon tax would be levied based on emissions volumes. The Institute proposed an initial charge of CNY10  per ton of carbon gas, while the Ministry of Environmental Protection (MEP) favored CNY20 a ton. Power producers, which rely on coal to generate 82% of their output, are expected to be among the largest targets of the tax. The industry accounts for around half the nation’s coal consumption. Heavy petroleum fuel users such as airlines, vessels and motor vehicle owners will also be affected. “It is highly likely the carbon tax will be rolled out before the end of 2015,” said Lin Boqiang, Dean of Xiamen University’s Center for Energy Economics Research.

A balance between development and the environment is essential, Vice Premier Li Keqiang said. “Providing basic environmental quality for its people is an essential public service for any government. It is necessary to improve the quality of life and provide a favorable environment with clear water, blue skies and uncontaminated soil,” Li told a national conference on environmental protection in Beijing which was attended by Provincial Governors and Ministers. Efforts to tackle problems with the environment should include greater protection for sources of drinking water, more thorough treatment of urban sewage, revising and publishing stricter air quality standards, preventing heavy metal pollution, better managing hazardous wastes and enhancing rural environmental protection to ensure food safety. Calling the environmental protection industry a fresh economic engine, Li said that enhanced efforts to curb pollution can push the country to improve its economic structure. “It is estimated that the output of green sectors ― pollution treatment and energy saving ― can exceed CNY10 billion during the 12th Five  Year Plan (2011-2015) period,” he said. At the conference, Governors and CEOs of the country’s biggest state-owned enterprises signed liability statements with the Ministry of Environmental Protection (MEP) to meet their emission reduction targets between 2011 and 2015, the Ministry said in a statement. A total of 1,184 sewage plants will be built in the next five years, with a combined treatment capacity of 45.7 million tons. Nitrogen oxide removal facilities will be installed for coal-fired power plants with a total installed capacity of 400 gigawatt. Local officials and company executives who fail to meet their emission reduction targets will be held responsible. Li also urged that the pollution monitoring agency should include PM2.5 into the new system to monitor air quality.