EU Airline Carbon Law Waivers Worth Eyeing

January 23, 2012

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Countries opposing a European Union law that charges airlines for carbon emissions should consider seeking waivers by adopting equivalent emission reduction measures, the EU's new envoy to India said on Monday.

From January 1, all airlines using EU airports have come under the European Union Emissions Trading Scheme, which has stirred up strong opposition in the United States, China and India.

Any airline that does not comply faces fines of EUR€100 (USD$130) for each tonne of carbon dioxide emitted for which they have not surrendered allowances. In the case of persistent offenders, the EU has the right to ban airlines from its airports.

"There is space in the legislation that has not yet been explored regarding exemptions for equivalent measures," said Joao Cravinho, the ambassador to New Delhi for the EU.

"There is room for negotiation, not for annulling the law. But there is within the law itself the possibility of exploring the avenues of exemption."

The EU law allows for equivalent measures to be taken into account, which analysts said would cover other ways of reducing emissions in the airline sector.

The rules do not specify what could constitute equivalent measures, Cravinho said.

"Flights coming from countries that have equivalent measures can be exempted. So we need to look at what equivalent measures can be," he said.

The EU says it needs to put a price on carbon dioxide (CO2) emissions to guard against the impact of global warming such as crop failures, droughts or flooding.

The airlines carbon tax forms part of measures the bloc says will help it fulfil its pledge to reduce emissions by 20 percent below 1990 levels by 2020.

Critics have said that the unilateral move violates the Chicago Convention on international aviation as well as some provisions under the World Trade Organisation.

Some of them have threatened retaliatory measures.

Cravinho said such threats would not force the EU to back down on a measure that he said was nondiscriminatory.

"It affects European companies as much as it affects Indian and other companies," he said.

"Any measures that discriminate against European companies will obviously be taken to... international court."