Cabinet to back airlines' no to EU carbon tax

Resolution soon retaliation against EU airlines, air pacts possible, say officials

The Union Cabinet is likely to soon pass a resolution endorsing the fact that Indian airliners would not share their specific carbon emission data with European Union (EU) authorities. This will be the first time since the imbroglio began over the buzz that government was going to officially communicate to the EU that it would not adhere to the latter’s changed emission trading system (ETS) laws.

While around 35 countries have refused to follow the EU’s new directives on carbon emission, only India and China have even refused to share their carbon emission data with Brussels. The government is also likely to indicate it is open to the idea of reviewing all the separate bilateral agreements on civil aviation that India has with each of the 27 member-states of the EU, a senior official involved with the issue told Business Standard.

The government has also hinted at strong retaliation if the EU imposes severe penalties on Indian air carriers. The official noted the number of flights European airlines operate in India are more than thrice the number that India operates to Europe. Also not ruled out is taking the issue to the World Trade Organization’s (WTO) dispute settlement body, as the “last resort”.

TAKE-OFF TROUBLE

• Govt also open to the idea of reviewing all the separate bilateral agreements on civil aviation with each of the 27 member-states
• The Cabinet will also officially communicate to the EU that it would not be party to any sort of “extra territorial imposition”
• 35 countries have refused to follow the EU's new directives on carbon emission
• India and China have even refused to share their carbon emission data with Brussels

“The Cabinet will endorse the decision that India will not share its data. If need be, we are also open to the idea of reviewing the bilateral arrangements on aviation with each of the member-states and find an amicable solution to this problem. We are open to sit on the negotiating table and explore ways to mitigate the issue,” the official, who refused to be identified, said.

The cabinet will also officially communicate to the EU that it would not be party to any sort of “extra territorial imposition”. Only the guidelines being worked out under the United Nations’ International Civil Aviation Organization (ICAO) would be followed. The latter talks, to put a cap on carbon emission by international airliners, have been on for the past 15 years at the ICAO and remain inconclusive. As a result, the EU had come up with its own rules to check the emission targets of all airlines polluting the European skies.

Earlier, the EU had threatened India and China with a ban on their airlines from European skies. However, last month, the EU spokesman for climate action, Isaac Valero Ladron, had told Business Standard that it would impose financial penalties, not ban the airlines.

The 27-member bloc had decided to include the aviation sector under the EU ETS in January this year. Since then, it has asked all domestic and foreign airlines to comply with the changed laws and share their respective carbon emission data with Brussels. These airlines would now need to follow a specific benchmark on carbon emission or pay a carbon tax, as well as face penalties. While other countries have shared their data, India and China have refused to do so.