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India boycotts EU aviation carbon tax


India’s opposition to the EU's carbon tax scheme could have adverse implications for the Free Trade Agreement it is currently negotiating with the EU.



India has barred its airlines from complying with the European Union’s (EU) controversial carbon taxation scheme, Civil Aviation Minister Ajit Singh said Thursday, adding that no Indian carrier would share emissions data with the EU.

“Though the European Union has directed Indian carriers to submit emission details of their aircraft by March 31, 2012, no Indian carrier is submitting them in view of the position of the government,” Singh told parliament.

“Hence the imposition of carbon tax does not arise,” he said, according to the Agence France Presse.

Despite opposition from over two dozen countries, including the US, Australia, Russia and China, the EU’s Emissions Trading Scheme (ETS), which imposes a carbon tax on the airline industry, entered into force on January 1.

It levies a charge on flights in EU airspace based on emissions but creates carbon allowances which airlines can “cap and trade.” No carrier will have to pay a bill until 2013, after this year’s carbon emissions have been assessed.

The EU says the scheme is essential if it is to reach its target of reducing emissions by 20 percent by 2020, but opponents argue that taxing aircraft flying to and from destinations outside Europe breaches international law.

The European Court of Justice ruled that the tax was legal at the end of last year.

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Last month, China said it airlines would not pay the EU tax. Along with India, it has attacked the carbon scheme as a unilateral trade levy disguised as an attempt to tackle climate change.

India’s opposition to the ETS could have adverse implications for the Free Trade Agreement it is currently negotiating with the EU, according to Reuters.

Countries opposed to the tax adopted the so-called Moscow declaration in February, in which they said they had decided on a series of retaliatory measures to be taken if the scheme is not dropped, including banning carriers from participating, RTÉ News reports.

Last month, Airbus chief executive Thomas Enders warned that the EU’s scheme could lead to a trade war, saying: “I’m really worried, also as a manufacturer, about the consequences.”

The Moscow declaration also allows for governments to take action against EU carriers and aviation companies if necessary, and impose their own taxes on EU airlines.  

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