India, 22 nations to retaliate EU move on carbon tax

New Delhi: Faced with European Union`s decision to impose a carbon tax on all flights operating on its skies, India and 22 other countries, including Russia, China and the US, have decided to retaliate with a series of measures which would impose heavy costs on European airlines and plane manufacturers.

A joint declaration to this effect was unanimously adopted at a meeting of these countries in Moscow earlier this week, which asked the EU and its member states that they "must cease application of the Directive 2008/101/EC to airlines/ aircraft operators registered in third states".

Through the directive, the EU has included all flights operating on its skies in the Emission Trading System (EU ETS) for payment of the carbon tax for CO2 emission. The directive has been effective from January this year.

Indian carriers that fly to Europe – Air India, Jet Airways and Kingfisher -? may end up having to pay millions of dollars annually on this count as it requires them to pay 15 per cent of the cost of compensating for the CO2 (carbon dioxide) emitted during landings or take-offs from Europe.

Among the measures decided upon by the 23 nations are "imposition of additional levies/charges on EU carriers/ aircraft operators as a form of countermeasure", reviewing Bilateral Air Services Agreements, including Open Skies with individual EU member states and suspension of "current and future discussions or negotiations to enhance operating rights for EU airlines and aircraft operators".

India had taken the lead in hosting a conference of several countries here last September in which a declaration was unanimously adopted to oppose the EU move.

This was followed by the Moscow meeting on February 21-22 where the joint declaration was adopted which starts by saying that the "inclusion of international civil aviation in the EU -ETS leads to serious market distortions and unfair competition".

In the joint declaration, the 23 nations decided to file an application under the Chicago Convention for resolution of the dispute in accordance with the rules of the UN-body, International Civil Aviation Organisation (ICAO).

They also decided to use existing or new state legislation, regulations or other legal mechanism to prohibit their own airlines and aircraft operators from participating in the EU-ETS. They also decided to mandate EU carriers to submit flight details and other data relating to carbon emission with the aim of taxing them.

Besides India, Russia, China and the US, the meet was also attended by representatives of Armenia, Argentina, Republic of Belarus, Brazil, Cameroon, Chile, Cuba, Guatemala, Japan, Republic of Korea, Mexico, Nigeria, Paraguay, Saudi Arabia, the Seychelles, Singapore, South Africa, Thailand and Uganda.

The European authorities have been maintaining that they would stand firm on the EU-ETS legislation and called upon its opponents to come up with an alternative system that would help curb greenhouse gas emissions by the airlines.