EU firm on carbon tax bill

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EU ETS
The European Commission insists that European Emissions Trading scheme (ETS) will help make Europe more climate friendly. Photo - Reuters

Gulf airlines would be incurring huge bills on flights into Europe due to EU’s new climate change scheme. From March this year, Etihad Airways, in response to the additional surcharge, has hiked the price of tickets by at least AED11 ($3) per passenger.

According to Georges Hannouche, CEO, Bayanat, an aviation services company, the impact of the EU Emissions Trading Scheme (EU ETS) will cost Emirates Airline around AED2.5 billion ($680m) over the next 10 years. He also added that the scheme does not take into consideration the efficiency of the aircraft fleet. However, expansion continues unabated for airlines in the GCC with new routes added to both US and European destinations.

EU ETS has been met with wide criticism. Several nations have joined the lobbying efforts. The Chinese aircraft has decided to boycott the scheme with support from the government. The United States also plans to have a legislation to outlaw the compliance with the scheme.

Under the scheme, the airlines operating in and out of Europe and regardless of the duration of flight in EU airspace are required to surrender varying emission allowances. They are also required to purchase additional permits.

All non-EU nations’ airlines are required to pay an emissions tax to the EU member state to which they most frequently fly.

SHIPPING WOES

EU ETS is also considering market-based measures to reduce carbon emission from ships. A series of guidelines to support the implementation of mandatory measures to increase energy efficiency and reduce emissions of greenhouse gases (GHGs) from international shipping was adopted by the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO) at the 63rd session.

An expert group is set up to carry out a feasibility study of the market-based measures and to determine the amount of emission reductions, carbon tax rate, and subsidies for developing countries.

However, the measures received strong opposition from major shipping associations such as International Chamber of Shipping and International Maritime Council.

Sources: People’s Daily Online, Reuters, Ameinfo

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