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China bans airlines from paying EU carbon tax

By Yang Jian (Shanghai Daily)

15:40, February 06, 2012

THE Chinese government today barred domestic airlines from paying carbon emissions taxes imposed by the European Union on flights into and out of Europe and prohibited airlines from charging customers extra because of the scheme.

The announcement from the country's State Council, or cabinet, said Chinese airlines need approval if they want to join the EU airlines emissions plan, which the government has already denounced as an unfair trade barrier.

According to the EU plan, airlines flying to or from the bloc will have to buy permits from the Emission Trading System from January 1 at a cost of 15 percent of the carbon emissions they generate, with large fines for noncompliance.

The carbon tax plan will only exempt airplanes that have an annual carbon emission of less than 10,000 tons.

The move is expected to cost Chinese airlines an estimated 743 million yuan (US$117.39 million) in 2012, or about 300 yuan for each ticket for flights between China and European countries, said Chai Haibo, deputy secretary general of the China Air Transport Association.

The association urged China's airlines to refuse to take part in the emissions scheme in December.

"China hopes Europe will act in the light of the broader issues of responding to global climate change, the sustainable development of international aviation and Sino-European ties, strengthening communication and coordination to find an appropriate solution acceptable to both sides," an unnamed official from China's civil aviation authority told Xinhua news agency today.

"As well, the Chinese side will also consider taking necessary measures to protect the interest of the Chinese public and businesses based on developments," said the official with the Civil Aviation Administration of China.

The European Court of Justice in Luxembourg dismissed arguments from US airlines against the EU plan late last month and allowed the union to charge carbon emissions tax from airlines flying to or from the bloc from this year.

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