Published on January 6th, 2012 | by Ravinder Casley Gera3
Chinese Airlines: We “Will Not Cooperate” with EU Air Traffic Carbon Tax
January 6th, 2012 by Ravinder Casley Gera
How quickly things change. Just a few weeks ago, it seemed that China had gone from obstacle to advocate in the battle over restricting climate emissions. The surprise deal at the UN Convention on Climate Change in Durban, South Africa in December, which saw India and China agree for the first time to discuss joining up to a successor to the Kyoto Protocol, seemed to usher in a new era of cooperation between developed and developing countries to reduce their mutual carbon emissions.
But here’s a worrying sign that Chinese businesses, at least, remain dead-set against strong action on emissions. China’s leading airlines have said they have no intention of paying a new levy on airline carbon emissions in the EU, something that just came into force on New Year’s Day.
The levy requires all airlines flying to and from airports in the EU to participate in the EU’s emissions trading scheme. Previously, the ETS has only applied to European energy companies and heavy industry. Now, it’ll apply to both EU and foreign airlines if they use European airports, requiring the airlines to buy carbon permits through the scheme. Airlines flying without permits could face fines of €100 per tonne of CO2. (A 1-tonne permit currently costs about €6.)
But the China Air Transport Association, which represents the People’s Republic’s four biggest airlines, says it has no intention of paying. “China will not cooperate with the European Union on the ETS, so Chinese airlines will not impose surcharges on customers relating to the emissions tax,” says deputy secretary-general Cai Haibo. He estimates the levy would cost his members around €94 million each in the first year.
In fairness, China’s airlines aren’t the only ones squealing at the new charge. A group of American airlines (including, yes, American Airlines) brought a legal challenge against the levy in a London court last year. But the European Court of Justice ruled in December that the inclusion of airlines in the ETS, whether European-based or not, could go ahead, and it seems American airlines are now resigned to paying the fine.
So, what happens now? Some further legal shenanigans, most likely. The first fees don’t actually have to be paid until 2013, although the counting of tonnes of CO2 that have to be permitted has already begun. So, there’s time for more court cases before the Chinese airlines actually face fines. If the levy isn’t overturned by the courts, and the Chinese airlines still don’t pay, they could theoretically be banned from EU airspace.
For more on the European Union’s Emissions Trading Scheme, see EU Will Tighten Cap to Fix Carbon Price Collapse.