India protests EU's carbon tax on aviation news
30 July 2011

New Delhi: Much after China raised a hue and cry over the imposition of a European Union tax on the aviation sector under its Emission Trade Scheme, India has now awakened from slumber and come out shrieking and complaining. Indian minster for environment Jayanti Natarajan lodged a formal complaint with the EU last week over the proposed tax, dubbing it an ''unfair'' trade practice.

When the tax becomes applicable next year in January, airfare to London will cost an additional €6 (Rs380), thanks to the carbon tax levied by the European Union (EU) on the aviation sector.  Industry experts estimate the tax will cost India atleast $1 billion (Rs4,500 crore) a year and along with Chinese and American airlines will help Europe rake in $10 billion a year.

"We believe the European carbon tax is just the start of a new global tax regime to adversely hit businesses of emerging economies such as India and China… We will have no option other than to approach the World Trade Organisation (WTO) if it isn't withdrawn," a senior government functionary said.

In her protest note minister Natarajan urged Europe to withdraw the tax till consensus emerged on the issue at the United Nations Framework Convention on Climate Change (UNFCCC), a body of 194 nations.

Under its Emission Trade Scheme, the EU will impose a penalty for failing to maintain annual carbon emissions within 10,000 tonnes a year. The decision was taken after the EU found in February that the aviation sector was spewing 20 per cent more carbon dioxide into the environment than previously known.

The EU itself is the world's third largest emitter of carbon dioxide after the US and China.

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India protests EU's carbon tax on aviation