India, China slam EU’s carbon emissions tax on airlines

Say it would jeopardise international efforts to combat climate change

By Uthra Radhakrishnan
Published: Wednesday 15 February 2012

The European Union’s move to levy tax on carbon emissions from airlines entering the EU from January 1 has been roundly criticised by its Asian trading partners, China and India, along with other members of the BASIC negotiating group, comprising Brazil and South Africa. The tax is viewed as providing unfair advantage to some, and more importantly, interfering with the supreme autonomy that states enjoy over their airspace.

In a joint statement issued by members of the BASIC group after a meeting of their ministers in New Delhi on February 13-14, the four countries reiterated their stand that European Union-Emissions Trading Scheme (EU-ETS) “violates international law, including provisions of the UNFCCC, and runs counter to multilateralism.” The ministers noted that the unilateral action by the EU in the name of climate change was taken despite strong international opposition and would seriously jeopardise the international efforts to combat climate change, the statement said.

Xie Zhenhua, China's chief climate negotiator, said that China has been approaching the EU at different levels, but it continues to be stubborn. The country will try to unite all like-minded countries to oppose the EU tax, he added. India's environment and forest minister Jayanthi Natarajan called it unilateral trade measure in the name of climate change mitigation action.

Last week, China imposed a ban on all Chinese airlines withholding them from taking part in the EU emissions trading scheme. Coming at a time when the EU is expecting to forge stronger ties with its trading partners globally to help with an ailing domestic economy, the move fueled fears that EU’s stubborn stance could lead to a trade war between the EU and the rest of the world. 

The scheme proposes to tax any flight that enters or leaves the EU for the amount of carbon emitted for the entire distance of the trip. But such a uniform tax would make it more costly for those flying farther away from the European bloc.

Furthermore, governments condemn the unilateral approach adopted by the EU in addressing the aviation industry’s contribution to climate change. Earlier last year, the US had filed a law suit in the UK High Court and Chinese officials had indicated that they may file one later this year in Germany. John Slosar, CEO of Hong Kong-based Cathay Pacific Airways agreed with this sentiment in an aviation conference in Singapore, “There’s a difference between leadership and bludgeoning. You guys tried the latter and are now discovering it works both ways”.

For years, the International Civil Aviation Organization (ICAO) has been charged with a mandate to regulate the environmental impacts of the aviation sector and also find a solution for commercial aviation’s contribution to climate change. The failure of governments to come to a common agreement on dealing with emissions from the aviation sector did not bode well for the EU which has for long been attempting to gradually expand its coverage of different sectors that would come under its emissions trading scheme.

Defiant EU

In its defense, the EU Climate Commissioner, Connie Hedegaard stated in a recent press briefing, “We made our law. First we tried for years and years to get global regulation but unfortunately without any success. Then we said we cannot have a situation where one of the truly global contributors to climate change, aviation, should not contribute where all the other sectors in Europe should contribute. Power sector, cement, manufacturing, steel and lots of other sectors are actually contributing and they are part of an ETS scheme.”

India, China and the US have long opposed this measure as it breaches one of the principal concerns of Convention on International Civil Aviation a.k.a Chicago Convention stated in Article 1 which reads: “The contracting States recognize that every State has complete and exclusive sovereignty over the airspace above its territory.” However, the US’ opposition to EU’s aviation directive based on this principle in the Chicago Convention has already been dealt with a death blow when the European Court of Justice (ECJ) rejected the US’ claim and had ruled in favor of the EU. 

José Manuel Durão Barroso, president of the European Commission, who was in Delhi on February 10 for the 12th India-EU Summit also could not convince the Indian side to accept the EU-ETS. A joint statement issued by the both the sides after the summit said, “Leaders reiterated their respective positions on the inclusion of aviation in the EU Emissions Trading System and noted the strong divergence of views.”

China and India have other reasons to plead their disadvantaged position. A newer fleet means a higher price to pay for increasing the fuel efficiency of their fleets.

While the EU has refused to cancel the levy, it has agreed to renegotiate the terms and conditions of how the directive will apply to different countries. Presently, this includes a provision called “equivalent measure” which allows countries that have policies in place to tackle climate change to be exempted from paying the tax, although it is still unclear exactly what measures will qualify.


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