India Leads Fight Against EU’s New Airline Emission Charges
India is working with over 30 nations to counter the European Union’s plan to impose emission charges on all airlines flying in to the region, beginning next year. The 27-nation bloc intends to impose carbon curbs on flights to and from the region, sparking protest from India, China’s airline association, and many carriers, including American Airlines (NYSE:AMR) and Continental Airlines (NYSE:UAL). The International Civil Aviation Organization has accused the EU of trying to “contravene” international law, calling the measure “an attack on sovereignty.”
More than 30 members of the International Civil Aviation Organization are meeting in India’s capital today to discuss the EU’s emission trading system. The meeting, hosted by India’s aviation ministry, will last two days. The ICAO has 190 member states, including the U.S. and China, but no news on which countries will be participating.
“By making the scheme applicable to non-EU airlines, there is a feeling that the European Union is overstepping its authority,” said Binit Somaia, a Sydney-based director at industry adviser CAPA Centre for Aviation. “Retaliation could take the form of tit-for-tat taxes, restrictions on traffic rights for European carriers and could even impact European aircraft manufacturers.”
In 2008, the EU decided to add aviation to its cap-and-trade carbon program after airline discharges had doubled in Europe in two decades. International aviation emissions account for 2% to 3% of all global greenhouse gas discharges. “The EU stands firm and, at the same time, willing to discuss with our partners the possibility of having equivalent measures,” said Isaac Valero-Ladron, the EU spokesman for Climate Action Commissioner. “This is not a tax, it is a pollution ceiling. If you emit less than the ceiling, you will not need to pay.”
The new measures, which will go into effect in January, will require all airlines flying into the EU to buy carbon permits if they exceed emission standards set by the EU. The costs of meeting those emissions targets could raise fares for a transatlantic flight by by two to twelve euros.
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The European Commission set a level of 0.6422 carbon allowances per 1,000 ton-kilometers for the eight years through 2020, while airlines will receive 0.6797 carbon allowance for every 1,000 ton-kilometers in 2012, when the new carbon curbs are expected to add $1.2 billion of costs to airlines. The world’s carriers are forecast to make a combined profit of $4.9 billion next year.