EU ditches carbon tax until 2013 for global CO2 deal

The EU has agreed to postpone the extension of carbon tax rules that compel airlines flying from and to EU destinations to pay for their carbon emissions.

EU Climate Commissioner Connie Hedegaard offered to “stop the clock” on the contested carbon air tax on Monday in the interests of negotiating a global CO2 deal.

Addressing the progress made on the matter at a meeting of the International Civil Aviation Organization (ICAO) in Montreal, Hiedegaard said: “Finally we have a chance to get an international regulation on emissions from aviation.”

She then added: “If this exercise does not deliver – and I hope it does – then needless to say we are back to where we are today with the EU ETS [Emissions Trading Scheme]. Automatically!”

The International Air Transport Association (IATA) welcomed the news with a statement from chief Tony Taylor.

Taylor said the development “represents a significant step in the right direction and creates an opportunity for the international community,” adding that “the commission’s pragmatic decision clearly recognises the progress that has been made towards a global solution for managing aviation’s carbon emissions”.

The EU rules currently only apply to those flights that begin and end within the 27-nation bloc. The tax forces airlines operating within the EU, whatever their flag, to buy 15% of their carbon emissions. Brussels confirmed that this measure would help the EU in cutting 20% of CO2 emissions by 2020.

The scheme was originally imposed on 1^st January 2012, but encountered firm opposition from 26 of ICAO’s 36 members, including India, Russia, China and US, who claimed that the rule was against international law.

The Association of European Airlines AEA, “cautiously welcomed” the EU decision, confirming it will stimulate concrete progress towards a more global approach.

AEA’s acting chief Athar Husain Khan said: “As international tensions over the issue have escalated, European airlines have been facing the very real prospect of discrimination and retaliation in our most important global markets”.

The EU confirmed it would reintroduce the carbon tax in the case of the expected deal with ICAO not being reached. This would cost airlines 17.5 billion euros ($22.3 billion; £14 billion) over eight years.

Annalisa Ratti