China Refuses to Pay EU Emissions Tax

The European Union is facing more pressure to scrap its carbon tax on airlines after carriers in China have refused to comply with the legislation. The Emissions Trading Scheme (ETS) has been hugely controversial around the world, and an attempt by US airlines to get the regulation overturned in the European Union’s highest court was unsuccessful.

The China Air Transport Association (CATA) says that the EU needs to either scrap or postpone the ETS, which includes flights to and from the airports in the union’s 27 member states. The CATA’s members include Air China, China Eastern Airlines and China Southern Airlines. The group says that the world needs to cooperate together and push the EU to scrap the legislation.

The warnings from China follow a declaration adopted by the United Nations’ International Civil Aviation Organisation (ICAO) in November, which called on the EU to exempt international airlines from its carbon tax. The non-binding statement was supported by 26 nations, including the US, Japan and Russia, who say the programme’s expansion is inconsistent with international law. India has also indicated that it will ask carriers to withhold emissions data.

The US House of Representatives passed a bill in November that prohibits the nation’s carriers from participating in the ETS after it was estimated that it would cost them $3.1 billion between 2012 and 2020. To become law, the bill needs support from President Barack Obama and the Senate. Meanwhile, the US Department of Transportation has asked its airlines to provide information on how the EU legislation is impacting their businesses.

The EU’s ETS was actually started in 2005, imposing carbon taxes on over 11,000 manufacturers and utilities. Companies that produce less emissions than their quota can sell surplus allowances, while companies that exceed their limits have to purchase more permits or face a fine of €100 per tonne of CO2.

The EU aims to be the global leader in the fight against climate change and decided a couple years ago that the aviation industry should be part of its ETS after finding that airline discharges in Europe have doubled over the last two decades. It also follows international organisations failing to implement emissions curbs. International carriers are due to get emissions permits that make up 85% of the industry cap in 2012 and the remaining 15% will need to be purchased at auction.

The European Commission has repeatedly said that it won’t give up on expanding the ETS to include airlines, even though it prefers that a worldwide solution be implemented. The EU’s law is open for the possibility of exempted flights from certain countries, providing the nations implement equivalent measures that reduce pollution from the aviation industry. The commission’s climate spokesman, Isaac Valero-Ladron, says that they hope that it won’t have to issue fines or ban airlines for continuous noncompliance with the legislation.