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China: EU carbon tax could spark trade war

Dec 22 2011 09:33 Reuters

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Beijing - China on Thursday criticised a decision by Europe’s highest court to charge airlines for carbon emissions on flights to and from Europe, calling it a “green barrier” that could spark a trade war.

“This is a trade barrier in the name of environmental protection and will strike a wide blow to passenger benefits and the international airline industry,” the state-run Xinhua News Agency said in a signed commentary.

“It will be difficult to avoid a trade war focused on an aviation ’carbon tax’,” said Xinhua, whose editorials reflect the official government position.

The European Court of Justice ruled on Wednesday against a group of US airlines that challenged a European law requiring a carbon cap on all airlines flying to and from European Union airports and forcing them to purchase permits from January 1 under the EU’s emissions trading plan.

Earlier this month, the China Air Transport Association urged China’s airlines to refuse to take part in the emissions scheme, and not to submit CO² monitoring plans to EU officials.

CATA says the scheme will cost Chinese airlines 800 million yuan ($123m) in the first year and more than triple that by 2020.

“The EU’s hurried and unilateral levy of a ’carbon tax’ on aviation is essentially a kind of green barrier, and thus in the name of environmental protection it is usurping other countries’ interests,” Xinhua’s Thursday commentary said.

It did not threaten specific consequences such as taking legal action against the EU.
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