From January, all airlines will have to buy carbon credits under the European Union's emissions trading scheme ETS.L to help offset the carbon emissions of flights that land or take off in Europe.
An adviser to Europe's highest court said on Thursday said that “European rules forcing all airlines to pay for carbon emissions are within the law.”
So far 25 countries including India, China, Brazil and Russia are opposing the EU's move. The Canadian airlines and airline associations have gone a step further and have challenged the EU's move in a High Court in London. In fact there's criticism of the EU move from many industry quarters.
One study shows that if the proposed carbon credit scheme is implemented in 2012 it would push up the fare of a London-Delhi-London flight by about 6 to 10 Euros. Although 6-10 euros doesn’t sound like much it is bound to escalate as aircrafts age.
Indian carriers with global operations like Air India, Jet Airways and Kingfisher are wary of the emissions tax.
"Every airline will suffer. It's a tax increases fares will go up for already stressed airlines,” said Amber Dubey, director-aviation at KPMG.
It is the European Union versus the rest of the world and right now the battle is a legal one. But there's every chance that the next chapter could be fought between governments.
Source : Ndtv Profit
