Business, Finance & Economics

Chinese airlines refuse to pay EU carbon tax

Picture of the China Southern Airlines first Airbus A380 taken in France on October 14, 2011.

China's major airlines say they'll refuse to pay a European Union carbon tax that was this year extended to include international carriers using EU airports, Reuters reported.

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The China Air Transport Association – which represents Air China, China Southern Airlines, China Eastern Airlines and Hainan Airlines – said today it was wrong for Europe to enforce its Emissions Trading Scheme (ETS) on other nations.

Chai Haibo, the deputy secretary-general of the association, known as CATA, said that China would not cooperate with Europe on the ETS issue:

"The CATA, on behalf of Chinese airlines, is strongly against the EU's improper practice of unilaterally forcing international airlines into its ETS."

While some airlines have warned customers to prepare for higher ticket prices, Chai said Chinese flight prices would remain the same, Reuters reported.

Under the carbon scheme, all airlines flying to and from the 27 member states will have to buy permits if they exceed their emissions allowance.

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Airlines around the world have warned the tax will cost the aviation industry $23.8 billion over eight years – but those refusing to pay may be fined or prohibited from flying into the region, the BBC reported.

India, the United States and Canada have criticized the scheme, which they say violates aviation and climate change pacts. The US Department of Transportation said it "strongly objected" to the imposition of European policy on other countries, Agence France Presse reported.

In December, the European Court of Justice in Luxembourg threw out a bid by US and Canadian airlines to block the scheme's introduction, the Toronto Star reported.

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The US Airlines Association has said it would comply with the European Court of Justice decision, but may take the case to the High Court of Justice, in London.

Meanwhile Reuters reported that a draft law before the US Congress would make it illegal for US carriers to comply with the EU scheme, while the Australian airline Qantas was also considering a legal challenge.

For its part, Europe says the ETS – which is one of the widest-reaching measures adopted by any country or regional bloc to regulate greenhouse emissions – is the fairest way to offset the aviation industry's contribution to global warming.

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