European Union carbon tax sparks row in airlines

SINGAPORE, Monday

World aviation bosses warned on Monday of a potential trade war over a carbon tax imposed by the European Union on the airline industry to reduce emissions and curb climate change.

In a conference on the eve of the Singapore Airshow, one of Asia’s largest aviation trade fairs, industry executives expressed concern over the political and economic impact of the charges which took effect on January 1.

“I have to say I’m really worried, also as a manufacturer, about the consequences,” said Airbus chief executive Thomas Enders.

“I have seen the position in China, in Russia, in the US, in India, and what started as a scheme to present a solution for the environment has become a source of potential trade conflict,” he added.

The EU imposed its Emissions Trading Scheme (ETS) on airlines flying into the continent despite opposition from more than two dozen countries including India, Russia, China and the US.

The EU says the scheme was designed to reduce carbon emissions blamed for climate change, and will help the 27-nation bloc achieve its goal of cutting emissions by 20 per cent by 2020.

EU transport commissioner Siim Kallas, who also spoke at the Singapore conference, said Europe was committed to reducing carbon emissions.

“We don’t have enough reasons or ground to suspend the legislation,” he said.

But he added that Europe was “sincere” in expressing readiness to achieve a compromise through the UN airline watchdog, the International Civil Aviation Organisation (ICAO). (AFP)