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China opposes EU's 'unilateral' airline tax plan
by Staff Writers
Beijing (AFP) Sept 28, 2011

China on Wednesday criticised European Union plans to charge airlines for carbon emissions, accusing it of "unilaterally" introducing the new tax.

Airlines, which contribute 3.0 percent of global greenhouse gas emissions, will be included in the EU's carbon trading market on January 1.

China has said it fears its aviation sector will have to pay an additional 800 million yuan (about $125 million) a year on flights originating or landing in Europe, and that the cost could be almost four times higher by 2020.

"China appreciates the EU's efforts in climate change but opposes the EU's forced implementation of unilateral legislation," foreign ministry spokesman Hong Lei told journalists at a briefing.

The tax would affect the country's major airlines -- including Air China, China Eastern and China Southern -- which plan to jointly lodge a legal case with the China Air Transport Association (CATA), the group told AFP.

Hainan Airlines, another large carrier, will also take part in the litigation.

CATA deputy secretary general Chai Haibo said "dozens of airlines" would be involved in the lawsuit and it aimed to lodge the case by the end of the year.

"Not only China but many other countries oppose the EU's practice," Hong said.

"The EU should act prudently and take a positive and practical attitude to handle this matter through proper consultations with China and other parties." Airlines around the world have denounced the EU plan to charge them for carbon emissions, warning it would cost the industry 17.5 billion euros ($23.8 billion) over eight years.

US air carriers are also challenging the EU Emissions Trading System in Europe's top court, arguing that it breaches international climate change agreements.

EU climate action commissioner Connie Hedegaard said Monday that airlines will receive 85 percent of their emissions allowances free of charge in 2012, meaning airlines would have to pay for 15 percent of their polluting rights. The figure will drop to 82 percent per year between 2013-2020.

She said the free allowances amount to 20 billion euros over the next decade, adding that airlines could use the funds to modernise their fleets, improve fuel efficiency and use non-fossil aviation fuel.

At the Paris air show in June, China reportedly blocked an order by Hong Kong Airlines for billions of euros worth of Airbus aircraft due to the EU carbon tax plan.

A source close to the matter who asked not to be identified told AFP at the time that he was aware of "the possibility that China could put the deal on ice."

He said it is well known that "the Chinese government is very unhappy" about legislation bringing airlines operating in Europe into the EU's emissions trading system.

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