Nations opposed to EU emission tax to meet next few weeks

There will be a meeting in early February of nations opposed to the EU ETS, in Delhi or Moscow. India seems to be talking up the potential of a trade war, with European airlines being restricted on flights in Asia and the east. IATA opposes the ETS and the motivations of those opposing appear to be financial, as it raises costs (of course – that it what it is intended to do, to pay for carbon) but veiled in thin arguments about there being better ways to cut aviation carbon.  Which are not being actively sought by any nation, other than the EU.

23.1.2012 (The Economic Times, India)

NEW DELHI: Nations opposed to the European Union’s new ruling on carbon emissions are meeting early next month to discuss retaliatory action, a top Indian government official has said.

The meeting may take place either in Delhi or in the Russian capital, Moscow, and will discuss a joint plan against the EU measures which have angered most countries of the world.

Last year, the European Union imposed a carbon emissions tax on all airlines flying into the continent in an effort to control carbon dioxide emissions, which are blamed for an increase in global temperatures. The proposal makes it mandatory for airlines flying into its airspace to buy carbon credits equivalent to the carbon dioxide emitted by their aircraft starting January 2012. Airlines don’t have to pay on a daily but an annual accumulated basis.

“Nations opposed to the tax may plan to respond in phases or a graded manner. However, this joint action has the potential to develop into a trade war. It is bound to have repercussions on the WTO as well,” the government official said. He declined to give details, but one of the retaliatory measures could include curbs on European airlines flying out to destinations in the east.

The EU Emissions Trading Scheme (ETS) has been criticised by a lot of governments across the globe, who say that it is unfair to unilaterally impose a tax without taking the consent of rest of the world, making the move inconsistent with international law. Industry experts do not think that the ETS is an effective way to keep emissions caused by airlines in control and are opposed to the measure.

“It is not the only way to keep emissions in control. Serious problems with EU ETS are that they cover only one regiona¦It won’t bring emissions down. It doesn’t solve the problem, but raises cost of travelling,” global airline body International Association of Air Transport (IATA) chief economist Brian D Pearce told ET.

and earlier

4.1.2012 (Money Control)

India readies a four-pronged poke to ETS tax on aviation

From January 1st, all airlines using the EU airspace will need to pay a carbon tax if the emissions exceed a certain cap. This move will impact Indian carriers that use EU airspace and airports, reports Rituparna Bhuyan of CNNBC-TV18. Sources have told the channel that India will be using a multi-pronged strategy to challenge the tax known as EU emission trading system or ETS.

India is reportedly going to team up with US, Canada, Japan and many other countries to challenge ETS.

The first strategy will be to challenge it at the WTO because India believes that ETS is a violation of the National Treatment Norms set up by the WTO. This stems from the fact that the tax charged is not only on the airlines that uses the EU airspace, but also on the route taken to reach the EU airspace.

ETS is likely to be challenged at the UN Framework Convention on Climate Change because the convention has not taken any decision on aviation emissions.

ETS will also be challenged at the International Civil Aviation Organization because it is at the moment negotiating a global treaty on aviation emissions, but it has not taken any final view on it.

Lastly, India is going to take up this matter bilaterally with all EU-based countries. In fact, CNBC-TV18 has learnt that Civil Aviation Ministry has started calling up many EU-based airline companies to take up this issue with them at a one-to-one level.

see earlier

Airlines could net £1.6bn windfall from EU carbon trading scheme, report says

Date added: January 12, 2012

Far from damaging US airlines, the EU ETS could deliver it a €2 billion windfall profit, according to a new report by a US Federal Aviation Administration-funded group of academics. Bill Hemmings, the aviation spokesman for the European environmental pressure group Transport & Environment, said that it “called seriously into question” air industry claims that the ETS would leave them out of pocket. Instead they can pass them on to passengers with minimal impact on their businesses. This US government-funded report says they could make windfall profits, so T&E are not sympathetic to their cries that the ETS will cost them billions.

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Fears of trade war after Chinese airlines ‘refuse’ to pay ETS

Date added: January 6, 2012

While the system was introduced this month, airlines won’t have to start paying the tax until the first quarter of 2013 giving them time to take responsive action. The China Air Transport Association says Chinese airlines will not impose surcharges on customers relating to the emissions tax. The EU legally has the option of enforcing fines of €100 for each tonne of CO2 emitted for which airlines have not surrendered a carbon allowance. The Assoc of Asia Pacific Airlines said various governments around the world opposed to the EU ETS are now evaluating what sanctions can be taken against the EU with the likelihood of a trade war ahead, which would not achieve any environmental benefit. Delta has already increased its fares to Europe by €3. Cathay said the ETS would add about $6.44 to a ticket between Hong Kong and Europe.

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Chinese airlines refuse to pay EU carbon tax

Date added: January 4, 2012

The 4 main Chinese airlines, Air China, China Southern Airlines, China Eastern Airlines and Hainan Airlines, which fly millions of passengers to Europe each year, have said they will not pay the ETS charges. This might lead to a ban from European airports. There are warnings of a trade war, and it has been suggested that China’s airlines should counter by reducing purchases of Airbus aircraft. The ETS costs expanding airlines more than those not expanding. China says it is still at the stage of rapid expansion of their airline industries and so find it difficult to cut overall emissions.

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