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India Leads Protest Against EU Carbon Tax On Airlines

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

04 October 2011


Strong protests have been made by 26 countries, led by India, against European Union (EU) plans to tax airlines on carbon emissions in its airspace. These concerns about the Emissions Trading Scheme (ETS) were expressed at a meeting of the International Civil Aviation Organization (ICAO) Council and non-EU Member States held in Delhi within the last few days.

Under the ETS, airlines flying to Europe will be required to purchase permits to allow them to emit additional tons of carbon dioxide above a predetermined cap. According to the proposals, sanctions for non-compliance will include fines and flight suspensions.

The Indian government said in a statement afterwards that the ETS measures were “inconsistent with international legal regimes” and violated the Chicago Convention. A joint declaration was negotiated and adopted at the meeting, opposing the ETS and calling for the EU and its member states to work collaboratively with the rest of the international community to address aviation emissions.

The unease of the delegates in Delhi was repeated at the Greener Skies conference in Hong Kong, where the International Air Transport Association (IATA) demonstrated the air transport industry’s commitment to its ambitious agenda to reduce CO2 emissions and urged the EU to abandon its “misguided plans” to include aviation in its ETS.

IATA invited governments to join industry as committed partners in a global approach to reducing aviation’s carbon emissions that could also include a global ETS or other compensation measures.

“The industry’s value chain is united around ambitious targets and a clear strategy to reduce its carbon footprint. To achieve the positive economic measures, technology improvements, more efficient infrastructure and better operations necessary to meet our targets, governments need to be much more proactive stakeholders and real partners,” said Tony Tyler, IATA’s Director General and CEO.

Airlines, airports, air navigation service providers and manufacturers are committed to improving fuel efficiency by 1.5% annually to 2020, capping net carbon emissions from 2020 with carbon-neutral growth and cutting net emissions in half by 2050, compared to 2005.

“These are challenging targets. Airlines represent 2% of global manmade CO2 emissions. This year that is estimated to be some 650m tonnes of CO2 emitted while carrying 2.8bn passengers and 46m tonnes of cargo. By 2050, the industry aspires to carry 16bn passengers and 400m tones of cargo with some 320m tonnes of CO2 emissions,” said Tyler.

“IATA is not opposed to emissions trading. But the EU’s unilateral and regional approach to ETS could not be more misguided. It is distracting governments from focusing on the real solution — a global approach through ICAO,” said Tyler.

IATA says that failure to coordinate in a global scheme will lead to a layering of taxes and air passengers could be faced with the burden of compensating for their carbon emissions several times over.

“We already see it in Europe with the UK Air Passenger Duty and copycat departure taxes in Germany and Austria. All were implemented using environment as the justification. But there is no guarantee that any will be eliminated when the ETS takes effect,” said Tyler. He also said: “There is absolutely no guarantee that any of the monies collected will be used for environmental initiatives. It is simply a punitive tax.”

Tyler noted that the EU’s plans challenge national sovereignty. “Europe’s plans contravene international law with the extra-territorial application of taxes. What right does Europe have to charge an Australian carrier for emissions over China? It is an attack on sovereignty that is being challenged by governments. China, India and the US are among states formally opposing the EU ETS. And the US is even processing a bill that will prohibit its carriers from participating. While the EU sees its actions as supporting a positive environmental agenda, the rest of the world sees it as an attack on sovereignty,” said Tyler.

TAGS: environment | tax | India | law | aviation | Australia | China | Germany | Hong Kong | United States | European Union (EU) | Europe

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