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6 Feb, 2012

China Hits Back, Bans Airlines From Paying EU Carbon Tax

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BEIJING, 6 February 2012, (Xinhua News Agency)  – China’s airlines are not allowed to pay a charge on carbon emissions imposed by the Europe Union (EU), and neither to hike freights nor to add other fees accordingly without government permission, the Civil Aviation Administration of China (CAAC) said Monday. The CAAC said in a statement that it had been authorized by the State Council, China’s Cabinet, to notify the ban to all domestic airlines.

Editor’s Comment

The Chinese move sets the stage for an aviation confrontation between Europe and China. Should European authorities insist on holding the fort, it may well lead to Chinese airlines pulling out of Europe. Which side then suffers more remains to be seen.

The move also reflects a growing frustration at a more broader level across much of Asia over European high-handedness and a propensity to throw its weight around, with scant regard for opinions or impact in other parts of the world.

In the new world order, those days are likely to fade. Travel advisories are next.

The statement said the EU’s decision to charge flights into and out of EU airports for carbon emission “runs contrary to relevant principles of the United Nations Framework Convention on Climate Change and the international civil aviation regulations.”

The EU’s Emissions Trading Scheme, which has taken effect on January 1, is one of the widest-reaching measures adopted by any country or regional bloc to regulate emissions of greenhouse gases blamed for climate change. It is estimated that around 4,000 airlines will pay the EU for their carbon emissions.

“China objects to the EU’s decision to impose the scheme on non-EU airlines, and has expressed its concerns over the scheme through various channels,” the statement said. “China will consider adopting necessary measures to protect interests of Chinese individuals and companies, pending the development of the issue.”

It added that China hopes the EU can find proper solutions to the issue with considerations of the overall bilateral relations, the two sides’ combined efforts to combat climate change as well as the sustainable development of the international airline industry.

Ironically, the move comes just after one week after European Union and China launched the 2012 EU-China Year of Intercultural Dialogue in Brussels. The year, launched on February 1 by Androulla Vassiliou, European Commissioner for Education, Culture, Multilingualism and Youth, and Cai Wu, China’s Minister of Culture, will see a large number of events and projects hosted by EU Member States and China, “with the aim of strengthening intercultural dialogue and mutual understanding through cultural exchanges and people-to-people contacts,” according to a European Commission press release.

A conference launching the Year took place on 2 February and focussed on prospects for strengthening EU-China cooperation and promoting mutual understanding . The EU-China Year of Intercultural Dialogue is the second in a series of thematic years in EU-China relations. 2011 was the EU-China Year of Youth.

Another potential for crisis is looming for Europe over its threat to ban oil imports from Iran as part of a move to impose sanctions over its nuclear programme. The ban is to come into effect in July, but the Iranians have said they are prepared to block Iranian oil exports to Europe right now. A bill is awaiting Parliamentary approval to do just that.

According to a report in the Iranian-funded media outlet Press TV, the Deputy Chairman of Iran Majlis Energy Committee Nasser Soudani said on Feb 4, “So far the ambassadors of several European countries such as France, Greece, Germany and Italy have desperately rushed to the parliament to call for restraint against passing a bill on stopping [the Iranian] oil exports to Europe.”

On January 28, the Iranian Parliament’s Energy Committee said it has finalized a draft bill to put an end to the country’s oil exports to the EU member states. The committee added that based on the double-urgency bill, the Islamic Republic would halt all oil exports to the European countries if they push for a ban on oil imports from Iran.

In their January 23 meeting in Brussels, EU foreign ministers imposed new sanctions on Iran which include a ban on purchasing oil from the country, a freeze on the assets of Iran’s Central Bank within the EU, and a ban on the sale of diamonds, gold and other precious metals to Iran. According to PressTV, the sanctions will become fully effective on July 1, 2012, to give EU member states enough time to adjust to new conditions and find alternative crude oil supplies.

Soudani further highlighted that the double-urgency bill is still on the table and that the Iranian lawmakers have expressed readiness to approve it. The lawmaker, however, added that Iran’s Majlis does not aim to “enter into war with the world,” stressing that the European countries have created tensions.

The United States, Israel and some of their allies accuse Tehran of pursuing military objectives in its nuclear program and have used this pretext to impose four rounds of sanctions and a series of unilateral sanctions against the Islamic Republic. Iran has refuted the allegations, arguing that as a signatory to the Nuclear Non-Proliferation Treaty and a member of the International Atomic Energy Agency, Tehran is entitled to use nuclear technology for peaceful use.

  • Jaffee Yee

    I believe if China decides to pull back, Europe will suffer more.  Who is going to buy all those Louis Vuitton and Gucci bags?

  • Jad

    Big time mistake – with 200Millions chinese expected to travel by 2015 – and a big fraction of them to Europ – that is a Not so well thought plan!