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Why European Union might have to Rescind the Green Tax on Airlines as India,China and USA gang up

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Europe which has been one of the greenest regions on earth in terms of promoting green energy and reducing carbon emissions is set to face a severe test. Europe is going to impose a Carbon Tax on Airlines flying into the region from 2012 . This has got the other major countries seeing red, with most of them planning retaliation. This Green Tax will add around $3 billion per year in terms of extra fees from airlines or around $6 per extra passenger. While airlines from USA and Canada approached the court, airlines from India and China are refusing to pay the tax outright. Indian airlines won’t supply their carbon data while China won’t pay the taxes . Note European Union is isolated in this fight against climate change . Though Carbon Trading is not a perfect system and open to abuses, at least it makes a pretense to fight global warming. On the other hand,these other countries have no plan or intention to fight climate change.

With global public opinion focused on the economic crisis , governments don’t care a hoot for a problem that is a decade away . So instead of enacting some policies to reduce carbon emissions from airlines which is around 3% of the carbon emissions or around 300 million tons, they want to browbeat the European Union.

Why European Union might have to Rescind the Green Tax

1) Retaliation by other countries on European Airlines like putting up overflight fees

2) Action against the European Airline Industry (Airbus), if countries like India and China prefer Boeing for their aircraft orders

3) Flights will be diverted away from Europe to avoid the Green Tax. The main beneficiaries will be Emirates, Ethihad over Lufthanse and British Airways on transworld flights

4) Ruling against European Union in international courts against violation of international airline treaties

EU stops the Free Carbon Lunch – Airline Prices to Increase to factor in Carbon Emissions

Airline Ticket Prices are set to go up as European Union implements its ETS Scheme on the Airline Industry from 2012.Note EU as a region has been one of the most active players in the climate change arena  and has an active carbon emissions market.Though this market has encouraged fraud and profiteering by unscrupulous players making it a good target for the fossil fuel lobby,the principle to fight against global warming is a good one.Compare that to USA,Canada and Japan who have done nothing to fight climate change despite the wealth of these nations.Canada has been guilty of abandoning the Kyoto Plan after missing its previous target.It has faced no penalties as it is not legally enforceable.The country continues down the pollute as much as you can pushing oil extraction from tar sands which is much more dangerous to the environment than normal oil drilling.

Europe’s Doomed Flight of Decarbonizing Fancy

The decision to include the airlines – responsible for just 3 percent of global CO2 emissions – in the EU cap-and-trade scheme came in the wake of the failure to agree a global agreement. While airlines will only pay for 15 percent of their emission allowances in 2012, around €256 at current market prices, from 2013 they will have to pay 18 percent. The airline industry estimates the cost over the first 8 years will be in the region of €17 billion ($23.8 billion). Although the carbon pollution bill kicked-in on January 1, 2012, invoices will not be sent to airlines until 2013; which is why non-EU governments are considering their next moves carefully.

At the heart of the “legal options” for the airline lawyers is the international agreement regulating air commerce known as the Chicago Accords. More prosaically known as the Chicago Convention on International Civil Aviation, its opening section specifically states, “The contracting states recognize that every state has complete and exclusive sovereignty over the airspace above its territory.” The new EU carbon regulations clearly violate the terms of this agreement by seeking to regulate air flight above nations outside Europe.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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