Following on from the failed attempt by US and Canadian airlines, made to the highest court in the European Union, to overturn Europe’s decision to introduce a carbon tax on any airlines entering European airspace, China have now joined the demonstration.
Many countries around the world now oppose the unilateral legislation. China is hoping that the EU will be practical and prudent will look to deal with the problems through consulting with relevant countries including China.
Airlines have spoke of their dislike for the emissions tax saying that it would cost the industry around $24 billion over the next eight years. China itself could face a bill of $125 million per year which could well increase massively by 2020.
Airlines will be expected to pay for 15 percent of all pollution rights in 2012. This figure would rise to 18 percent from 2013.
Apparently in retaliation China blocked a move by Hong Kong Airlines in their order for a Airbus aircraft in a deal that would be worth billions of Euros. This could well spark a trade row between the two economic giants with government agencies calling for more action.
US airlines who failed in their attempt to fight the tax have said that they will carry on under protest. The airlines argued that this amounted to a backdoor tax.
The European Court ruled that the tax was legal in that the tax does not infringe on the Open Skies Agreement or international law. The EU has told the US that it should prepare itself to obey the new law in the same way that European companies have to respect American law.
The US too has spoken about reprisals between itself and the EU sparking the risk of a trade war.