Flying greener became a priority - and potential headache - for Chinese airlines after the country's civil aviation regulator vowed to cut emissions and the European Union decided to include international flights in a carbon cap system that will require them to pay for emissions beyond a certain level.

Air China, the nation's flagship international carrier, plans to operate a trans-Pacific demonstration flight partially powered by biofuel in the second half of this year. [File photo]

The Civil Aviation Administration of China said it wants to reduce the 2005 levels of carbon dioxide emissions by 22 percent by the end of 2020. It is encouraging airlines to use alternative fuels and newer, more efficient jet engines.

"By the end of 2020, companies in China's aviation industry will be keeping pace with developed countries in terms of energy consumption and emission standards," the administration said in a recent guideline.

Air China, the nation's flagship international carrier, plans to operate a trans-Pacific demonstration flight partially powered by biofuel in the second half of this year.

The Beijing-based carrier is expected to use a Boeing 747 powered by Pratt & Whitney engines on the test flight, and PetroChina will provide jatropha-based feedstock for the project.

The flight will follow a number of biofuel test-flights conducted by airlines worldwide, including Virgin Atlantic, Air New Zealand and Continental Airlines.

Zhang Jianzhong, vice general manager of China Eastern Airlines, said his carrier is developing energy-efficiency strategies, including phasing out older planes, optimizing routes and renovating technologies.

The carrier has chosen Rolls-Royce to supply Trent 700 engines to power its 16 Airbus A330 aircraft. The engines are estimated to reduce fuel consumption by at least 2 percent in the first year alone. That's the equivalent of a 190,000-ton reduction in carbon dioxide, or the equivalent of the carbon emissions produced by 80,000 cars.

However, airline officials say some of the emission problems are beyond their control.

"Limited air space costs airlines more energy because many planes have to wait at the airport or in the air under air traffic control, which increases our consumption of jet fuel," Zhang said.

The EU's Emission Trading System is facing challenges from Chinese and other global airlines who question the Europeans' right to regulate emissions from airlines using their airports.

The China Air Transport Association said in a statement on behalf of Air China, China Eastern, China Southern and its other members that significant flaws exist in the EU emissions policy and rules imposed may themselves violate international law.

The association will urge the Chinese government to take "corresponding measures" to safeguard the interests of the nation's carriers if the EU persists in its efforts.

The EU has ordered all flights departing or landing at its airports to participate in emissions trading, starting next January 1. Under the so-called "cap-and-trade" system, a ceiling is imposed on carbon dioxide emissions. Companies that exceed their allotted limits are forced to buy emissions rights from more efficient companies that don't use all their allocated amounts.

The number of emissions rights allocated to airlines is 213 million metric tons next year, dropping to 208.5 million tons a year from 2013, according to the European plan.

Thomson Reuters Point Carbon estimates that airlines face an allowance shortfall of 88.5 million metric tons in the first year alone, which will cost the global industry 1.4 billion euros (US$2 billion) in 2012. That figure is expected to rise to 7 billion euros by 2020.

Chinese carriers would need to pay an estimated 17.6 billion yuan (US$2.7 billion) by 2020, after a first-year cost of 800 million yuan. Adding a new flight between China and Europe would cost 15 million yuan annually, according to China's civil aviation regulator.

"Airlines have to reduce flights or use biofuel-powered planes to offset the rising costs under the emission trading system, but they would prefer biofuel planes because Europe is a hot destination for domestic tourists," said Wu Yunying, an analyst at Changjiang Securities Co.

If carriers transfer the costs to passengers, an economy-class ticket from Shanghai to Europe is expected to rise between 200 yuan and 300 yuan.

Air China stands to be the biggest loser among Chinese carriers when the European emissions program comes into effect because it operates the most flights, with 12 passenger and four cargo destinations in Europe.

The carrier, according to media reports, said it sympathizes with Europe's desire to reduce emissions, but the cap-and-trade system adopted by the EU doesn't take into consideration the special problems of developing countries and violates the "common but differentiated responsibilities" principle followed by the international community on climate change.

The Air Transport Association of America and US carriers United and Continental and American have a case pending in the High Court in London, challenging the legality of extending the EU emissions trading system to international flights.

"I would point out that commercial aviation is a remarkably efficient economic engine, accounting for only 2 percent of global carbon dioxide emissions while adding over 7 percent to global gross domestic product," James Muller, vice president of United Airlines Asia Pacific told Shanghai Daily in an interview.

"The industry's track record of improvements in fuel efficiency and environmental impact over the past 40 years is exemplary," Muller added. "Airlines today move passengers and cargo 70 percent farther on a gallon of fuel than four decades ago. In terms of carbon emissions, that amounts to taking almost 19 million cars off the road in each of those 40 years."

"We are global airlines; we need global solution," he added.

The US airlines are hoping to get a verdict in the case before the end of this year.