China stops airlines from paying EU carbon tax

The Chinese government ordered its airlines on Monday not to pay carbon emission charges imposed by the European Union. China's Civil Aviation Administration said that EU's Emission Trading Scheme on carriers using EU airports was "contrary to relevant principles of the United Nations Framework Convention on Climate Change and the international civil aviation regulations," adding the government would "consider taking necessary measures to protect the interests of Chinese individuals and companies. " The ETS was extended to cover all airlines using EU airports on January 1, one month after the EU's highest court rejected a legal challenge brought by US carriers. Under the EU law, airlines that do not fully comply with ETS provisions could be fined 100 euros for each ton of untaxed carbon dioxide they emit. Airlines may also be banned from landing at EU airports if they persistently breach the rules. China's fears Whilst China fears that its aviation sector will have to pay an additional 800 million yuan each year on flights taking off or landing in Europe, and that the costs could rise four times by 2020, the European Commission argues the extra cost for airlines is manageable if they charge extra between four and 24 euros to the price of a two-way long-haul flight. Other than China, there are more than twenty countries, including India, Russia, Japan and the United States, which oppose the new rules. They are of the view that the EU has no right to include non-EU carriers into its scheme and that it cannot control emissions taking place outside of its airspace. On its part, the Indian government has recently asked its airlines that fly to Europe, such as Air India and Jet Airways, to refrain from handing over any carbon emissions data to EU officials. “India strongly feels that a unilateral measure, as the one proposed to be taken by EU, stands not only in violation of the principles and provisions of the (international) convention, but will also not augur well for the success of future climate change negotiations," India’s Environment Minister Jayanthi Natarajan wrote in a letter to Connie Hedegaard, the EU's commissioner for climate and energy. ‘Airlines will benefit’ Dr. Janina Scheelhaase of the Institute of Airport Research in Cologne believes that ETS, launched in 2005 in a bid to combat climate change, could be a success. "At present over 10,000 installations are included in the ETS. Operators of large-scale power stations and industrial plants are obliged to surrender allowances for their emissions," Scheelhaase told Deutsche Welle. The airlines could benefit from the ETS, says Scheelhaase, because "the abatement of carbon dioxide by aviation itself would be very costly due to high fuel costs." Scheelhaase said "under this scheme, airlines can fulfil their obligations of emission reduction at a lower cost by purchasing allowances.”