EU shelves carbon tax on airlines

Copy of Copy of ca NU p20 SAA done Airbus SAA and other international airlines will no longer be forced to buy carbon pollution credits pending a new round of negotiations by the International Civil Aviation Organisation (ICAO). This after the EU caved in to pressure from the global aviation industry by suspending its controversial climate tax scheme for all foreign airlines flying into Europe.

The EU has caved in to pressure from the global aviation industry by suspending its controversial climate tax scheme for all foreign airlines flying into Europe.

The climbdown, confirmed this week by the EU Climate Action office, means that SAA and other carriers will no longer be forced to buy carbon pollution credits pending a new round of negotiations by the International Civil Aviation Organisation (ICAO).

Although new carbon taxes under the EU’s Emissions Trading Scheme have not led to steep hikes in ticket prices, the scheme provoked strong opposition from several nations, and warnings that it could trigger a trade war.

Although the scheme was ruled legal by the EU Court of Justice, the US and India simply refused to comply and China retaliated by delaying a multimillion-dollar deal to buy passenger jets from European aircraft maker Airbus.

SAA, which flies to London, Frankfurt and Munich, said earlier this year that it would comply “under protest”, and announced that it would raise a fuel surcharge of about e2 (R22) a passenger on European flights, with effect from July 1.

South African Tourism Minister Marthinus van Schalkwyk entered the fray this year, urging the EU to suspend the scheme for two years pending negotiation of a new global agreement to curb aviation emissions, which account for more than 2 percent of man-made greenhouse gas emissions.

The scheme was implemented from January this year and required all foreign airlines using European airports to monitor and reduce carbon emissions progressively or be penalised financially.

However, EU Climate Action commissioner Connie Hedegaard said on Monday that she was “stopping the clock” and would suspend the scheme for one year as a gesture of good faith.

The suspension was conditional on the global aviation industry making substantial progress on a new emissions agreement before the International Civil Aviation Organisation’s next general assembly in September next year.

Hedegaard said the EU had been forced to implement the scheme after the organisation’s members had failed to take action for several years.

“Now it seems that because of some countries’ dislike of our scheme, many countries are prepared to move on ICAO… In short, finally we have a chance to get international regulation on emissions from aviation. This is a long-sought-for opportunity… This is progress. But actually to get there, a lot of tough negotiations lie ahead of us.”

The International Air Transport Association (Iata), which has also lobbied strongly against the scheme, said this week that the decision by Hedegaard was a “significant step in the right direction”.

“The commission’s pragmatic decision clearly recognises the progress that has been made towards a global solution for managing aviation’s carbon emissions,” said Iata director-general Tony Tyler.

Although the time frames remain unclear, it seems unlikely that a global agreement will come into force before 2020.

Iata has noted that one of the proposals on the table involves establishing a global carbon offsetting scheme, using 2020 as a baseline for future emission reductions.


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