Saudis To EU: Think Again on Emissions Trading

The sun may have set on the old European colonial empires, but the continent has not given up on the desire to tell other lands what to do. The European Union is trying to force foreign airlines to comply with the EU’s emission trading rules (cap and trade) or face punitive measures.

Non-EU states are pushing back hard, and Saudi Arabia has joined the fray. Businessweek reports that the kingdom has ordered Saudi Arabian Airlines not to comply with the carbon trading regime, which requires airlines to purchase credits to offset specified emission levels (i.e. pay a tax). The Saudis reject this regulatory intrusion into their affairs:

‘The EU thinks that, with time, the charges levied on us will become normal and acceptable. We wanted to make sure to send them a message that the case will not end easily,’ Mohammed al-Sabban, an independent energy consultant and a former Saudi chief climate negotiator who represented the country in issuing the joint communique, said Sept. 28 by phone. State-owned Saudi Arabian Airlines is the only Saudi-based carrier that travels to Europe.

Currently airlines receive free emissions credits, but this is part of a phase-in period that ends in 2013. The Saudis have joined a phalanx of other nations, including China and India, in opposing the full implementation of the program. It is anyone’s guess what will happen next, and it is possible that the dispute will spark the equivalent of a trade war. In that event, at least the international lawyers will enjoy the green.