BASIC Countries Slam EU Carbon Tax On Airlines

by Mary Swire, Tax-News.com, Hong Kong

17 February 2012

The 10th BASIC Ministerial Meeting on Climate Change, held recently in New Delhi, has heavily criticized the inclusion of international aviation in the European Union Emissions Trading Scheme (EU ETS).

The BASIC countries, led by China, India, Brazil and South Africa, were originally formed by an agreement in November 2009 to act jointly at the Copenhagen climate summit. They work to define a common position, amongst themselves and with other countries, on greenhouse gas reductions and climate change.

The Chinese government has already this month banned Chinese airlines from participating in the EU ETS, under which, starting from January 1, 2012, airlines operating into and out of the EU, regardless of how long that flight is in EU airspace, will be required to surrender varying emission allowances, and will be required to purchase any additional permits outside of their free allowance.

Non-EU nations' airlines would also be required to pay such an emissions tax to the EU member state to which they most frequently fly, without any requirements that those EU countries use the funds collected in emissions reduction efforts.

The BASIC ministers at the meeting noted with deep concern, and reiterated their firm opposition to, the inclusion of international aviation in the EU ETS which, it was said, violates international law, including the principles and provisions of United Nations Framework Convention on Climate Change.

In addition, they noted that the unilateral action by the EU in the name of climate change was taken despite strong international opposition and would actually jeopardize the international efforts to combat climate change. The ministers recognized the threat of similar unilateral measures being considered by developed countries in the name of climate change in the area of international shipping, and expressed their additional concern.