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October 10th, 2013:

China and India unhappy with EU over Aircraft Emissions Taxes

The European Union has, for the past few years, pushed for capping aircraft carbon emissions and taxation, in an effort to reduce one of the biggest contributors to greenhouse gases. The proposed plan, however, ran into an insurmountable obstacle: taxing aircrafts of foreign airlines flying to and from Europe. Taxation for emissions that take place outside of Europe (for instance, a large part of a journey between Shanghai and London will not be in EU airspace) is considered by non-EU countries to be extraterritorial and sovereignty-violating, and many threatened retaliatory tariffs on European airlines if the EU went ahead with the plan unilaterally. The US even passed a preemptive law banning US airlines from compliance, and China flashed warnings of a trade war with a moratorium on aircraft orders from Airbus that was only partially lifted recently.

The International Civil Aviation Organisation (ICAO) of the UN has stepped in with a plan to hash out a global agreement over aircraft carbon emissions. Brussels then agreed last November to a one-year suspension of emissions taxes for foreign airlines while the agreement is being worked out. As it turns out, the ICAO target for reaching full agreement is 2016, coming into force only in 2020. Non-EU countries, however, continue to voice their displeasure, fearing that the plan would severely impact their fast-growing aviation networks.

Some in the European transport industries do not consider airlines outside the EU and US as big players in global aviation. (Jimmy LWH/flickr)

It remains to be seen if this round of politicking will be resolved at all.

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