India, China Object to EU Carbon Tax for Airlines

May 24th, 2012
in econ_news

Econintersect:  India has issued a warning that, if flights of their airlines into Europe are restricted, a reciprocal action could be taken by India against air-india-a330SMALLEuropean carriers.  The dispute has arisen because the EU has been demanding that foreign airlines comply with EU carbon tax requirements.  India, as well as China, have refused to cooperate and will not share their carbon emission data for 2011.  According to the Financial Times, other countries including Russia and the U.S., have also protested the imposition of the Brussels requirements.  In April The New York Times reported that China had suspended $14 billion in orders from Airbus in the ongoing dispute.

Follow up:

The threat of a “trade war” over the carbon tax appears to be escalating.  From the Financial Times:

Ajit Singh, civil aviation minister, said in an interview with the Financial Times on Wednesday: “Travelling is always a two-way traffic … if they can impose sanctions so can other countries.”

“[The EU] is a sovereign union, they can make laws for themselves but they cannot make laws for the whole world,” he said. “If you allow this, next they will impose a carbon tax on shipping or cement.”

However, the extent of the war appears to be limited to just ten airlines, two from India and eight from China.  From (May 17):

Connie Hedegaard, European Commissioner for Climate Action said that only China and India Airlines still defied the EU and refused to provide the carbon emissions data from 2011, compared to 1,200 airlines from around the world that have submitted the information. The two last holdouts' carbon emissions accounted for less than 3 percent in the aviation industry.

Hedegard warned that if the ten airlines do not cooperate by mid-June they may face penalties, (, 17 May).

John Lounsbury


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