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China: We will not co-operate with the EU on ETS,Airlines won’t pay carbon tax

Beijing, Jan 5 ():  Starting January 1, 2012, flight operators will have to abide by the new EU law that pronounces that all airlines are required to hold emission rights in the form of CO2 certificates for flights to and from Europe. In 2012, 82 per cent of the necessary certificates will be awarded to airlines free of charge. Airlines will have to purchase another 15 per cent of the certificates, with 3 per cent being reserved for new airlines.

China’s largest airlines are set to flout EU law by refusing to pay for the emissions impact of flights in and out of Europe. The China Air Transport Association (CATA), which represents the country’s four major airlines, today outlined a policy of non-compliance.

“China will not co-operate with the European Union on the Environmental Treatment systems (ETS), so Chinese airlines will not impose surcharges on customers relating to the emissions tax,” CATA deputy secretary-general Cai Haibo told .

The European Commission has consistently refused to back down in the face of pressure from China and the US to exclude non-EU airlines and has indicated it will impose financial penalties of up to €100 per tonne of CO2 or even ground non-compliant carriers.

The US House of Representatives passed a bill in November that prohibits the nation’s carriers from participating in the ETS after it was estimated that it would cost them $3.1 billion between 2012 and 2020. To become a law, the bill needs support from President Barack Obama and the Senate. Meanwhile, the US Department of Transportation has asked its airlines to provide information on how the EU legislation is impacting their businesses.

“From our point of view it is quite simple,” a spokeswoman for EU climate commissioner Connie Hedegaard told.”There is a law and we expect people to follow it.”

The row surrounding the policy escalated this week when Lufthansa said participating in the ETS would cost the company an extra $130m this year, which would primarily be covered by hikes in ticket prices. And Delta Air Lines said on Tuesday it will add a $3 surcharge each way for trans-Atlantic tickets purchased in the US in order to offset the cost of the ETS.

But, green campaigners have backed the EU’s stance, claiming that airlines will receive 85 per cent of the permits they need in the first year for free and should use such windfall profits to invest in more efficient aircraft and low-carbon fuels. Supporters of the move argue that in the absence of progress towards a global deal at the International Civil Aviation Organisation (ICAO), the EU’s regional approach is necessary and will save around 183 million tonnes of CO2 each year by 2020.

Lufthansa last raised its fuel surcharge for European and long-haul flights on 15 December 2011 by 3 to 10 euros. In future, the surcharge will reflect both the price of oil and the cost of acquiring emission rights.

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