India, EU try to break logjam over airline carbon tax

NEW DELHI Fri Feb 3, 2012 7:19am EST

A passenger aircraft is silhouetted against the rising moon in New Delhi May 7, 2009.  REUTERS/B Mathur

A passenger aircraft is silhouetted against the rising moon in New Delhi May 7, 2009.

Credit: Reuters/B Mathur

NEW DELHI (Reuters) - The European Union EU.L is willing to consider whether India's efforts to reduce carbon emissions could qualify for waivers under an EU law that charges airlines for polluting, the 27-nation bloc's climate chief said on Friday.

India, along with the United States, China and several other nations, has opposed the European Union Emissions Trading Scheme that stipulates all airlines using EU airports must pay a price for emitting planet-warming gases during a flight.

But the law also allows for equivalent measures to be taken into account without specifying what they could be. Some analysts say such steps would cover other ways of reducing emissions in the airline sector.

"We are not dictating others what to do. They can do whatever they want and we can discuss if they are equivalent measures," Connie Hedegaard told Reuters after a meeting with India's Aviation Minister Ajit Singh on Friday.

"I invited the Indian minister that we could engage in a discussion on equivalent measures. We had a very constructive dialogue. "

No. 3 in the list of top carbon polluters, India is betting big on two market-based trading schemes to encourage energy efficiency and the use of green power, touting them as decisive, voluntary action to fight emissions-induced climate change.

New Delhi would hope that such schemes would qualify as "equivalent measures" that would help its airlines gain exemption from the EU carbon law for the aviation sector.

"That (waiver) is a provision in our legislation," Hedegaard said, adding so far exact measures that could be considered equivalent were yet to be negotiated.

The EU law came into force from Jan 1. Any airline that does not comply faces fines of 100 euros for each tonne of carbon dioxide emitted for which they have not surrendered allowances.

In the case of persistent offenders, the EU has the right to ban airlines from its airports.

The EU says it needs to put a price on carbon dioxide (CO2) emissions to guard against the impact of global warming such as crop failures, droughts or flooding.

The airlines carbon tax forms part of measures the bloc says will help it fulfil its pledge to reduce emissions by 20 percent below 1990 levels by 2020.

Critics have said that the unilateral action violates the Chicago Convention on international aviation as well as some provisions under the World Trade Organisation.

Some of them have threatened retaliatory measures. But Hedegaard brushed aside such threats.

"The key point is some of those who now rally against the European legislation what alternative can they rally on. It's always easy to say what you do not like. I would very much like to hear what do they like," she said.

Critics have said any regulation of the airline industry should be negotiated at the U.N.'s International Civil Aviation Organization ICAO.L.

Hedegaard said Europe went ahead with the law after waiting for years for ICAO to act.

"The day that you have an international regime agreed in ICAO and entering into force then, of course, that's good, that fine. Then you do not need European legislation," she said.

"But the world is not so that you can say oh let's discuss that in ICAO, please take away your legislation. That's not how we are playing."

(Editing by Jane Merriman)