China’s four leading airlines are refusing to pay a carbon dioxide tax under the European Union’s Emissions Trading Scheme (ETS). Becoming the latest in a list of international carriers who are refusing to pay the tax.
In a bid to combat carbon emissions the ETS charges were introduced on Sunday, this means all airlines using EU airports are expected to comply with the cap-and-trade scheme.
Deputy secretary-general of the China Air Transport Association (CATA), Cai Haibo said: “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”.
The new ETS system requires airlines flying to or from Europe to obtain carbon dioxide emission certificates. By doing so they will get free credits to cover the majority of flights this year, however must buy or trade for credits to cover the rest.
Airlines could face fines of 100 euros (£83) by EU law, for each tonne of carbon dioxide emitted that the airlines have not surrendered carbon allowances. If airlines continually break the law the EU can ban the operator.
In December a ruling from Europe’s highest court decided that the airlines were to comply with the ETS, this news came immediately after a news agency warned of a trade war in China’s state-run Xinhua.
The country join the U.S. who have warned of a possible retaliation, the U.S. Congress have drafted a law in which it proposes to make it illegal to comply with the EU legislation.
Cai announced in response to its carbon emission charges Chinese airlines may consider taking legal action against the EU. However U.S. airlines lost their legal battle in December.
The European Court of Justice in Luxembourg dismissed arguments that their latest system infringes national sovereignty or violates aviation treaties.
China however, may have unusually strong leverage in its dispute against Europe because its state-owned airlines carry vast amounts of Chinese and other Asian tourists to Europe.
CATA have estimated that the ETS will cost Chinese airlines a shocking 800 million yuan (£79 million) in the first year, and by 2020 the figure will have more than tripled.
Article by Charlotte Greenhalgh