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Tuesday, 10 January, 2012, 14 : 30 PM [IST]

India seeks reversal of EU carbon emissions tax

India has warned the European Union (EU) that the carbon levy the former has begun imposing on airlines will hinder future climate-change negotiations and demanded a rollback. Jayanthi Natarajan, Union Minister for Environment, has written to the Connie Hedegaard, Commissioner for Climate and Energy, European Union, calling for an immediate reversal of the tax, which came into force on January 1 this year. “I strongly urge the EU to reconsider and reverse the decision to apply the scheme to non-EU airlines,” Natrajan wrote in the letter dated 28 December 2011. While it does so, the EU should defer the levy for a year, the letter said.

According to a report by Mint, under the Emission Trading Scheme (ETS), airlines using EU airspace will have to pay a fee for carbon emissions that exceed a set limit. They will also need to pay for the part of the journey that’s over non-EU airspace. Indian carriers that fly to Europe, including Air India, Jet Airways (India) Ltd and Kingfisher Airlines Ltd, could together pay more than Rs 300 crore in 2012 alone on account of the levy. The airlines would have to make the payment at the end of the year. “India strongly feels that a unilateral measure as the one proposed to be taken by EU, stands not only in violation of the principles and provisions of the (international) convention but will also not augur well for the success of future climate change negotiations,” Natarajan said in the letter.

India has led the opposition to the new tax with the support of more than two dozen countries, including the US and China, emphasising that the move does not have the sanctity of any bilateral air services agreement. The Indian government has also asked the country’s airlines to refrain from submitting carbon emissions data to the EU.

Issac Valero-Ladrón, spokesperson for Climate Action Commissioner Hedegaard, confirmed the letter from Natarajan had been received and a reply was being drafted. “We are very open to continuing our discussions with the Indian government. We are confident that the EU and India share the same goal of curbing growing aviation carbon emissions that increasingly contribute to climate change,” Ladrón said. “Our law gives all countries, including India, the choice to reduce aviation’s carbon pollution differently. If India takes equivalent measures, all incoming flights from India can be exempt from the EU law when arriving in or departing from Europe,” he said.

If airlines refuse to give carbon data to EU, they could, as a last resort, be banned, according to Ladrón. “The EU legislation foresees the possibility of imposing an operating ban on an airline if it persistently failed to meet its legal obligations. We hope, however, that this very last resort will never need to be applied,” Ladrón said.

The EU is “trying to increase revenues in any possible way due to their dire economic conditions,” said Steve Forte, former CEO, Jet Airways (India). “The EU has not, I repeat not, stated unequivocally that the ETS revenues will be fully utilised in the efforts of reducing aircraft emission,” Forte added. Natarajan said in an interview that India will not accept any new taxes “disguised as climate action”. Talks with the Civil Aviation Ministry are on to decide the course of action, she said. “So far, we haven’t (come up with a counter legislation),” she said. “But we have made sure that our views are made very clear.
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