China bars airlines from EU carbon tax

European officials insisted Chinese airlines will have to pay a tax on their carbon emissions, rebuffing an attempt by Beijing to shield its airlines from the controversial emissions trading scheme.

The EU said it remains determined to include all airlines that take off or land in the 27-member bloc in the scheme, which other nations including the US complain is a violation of their sovereignty and has stoked warnings of a trade war. “We’re not backing down,” said a spokesman for Connie Hedegaard, the EU’s climate commissioner, adding that the bloc was “confident that the Chinese airlines will comply with our legislation”.

While Chinese airlines had previously said they would not pay the EU carbon tax, the Civil Aviation Administration of China has instructed them that they cannot join the EU emissions trading scheme without government approval.

The announcement, published by the official Xinhua news agency, sets the stage for a showdown next week when Chinese and European leaders meet at a summit. Wen Jiabao, China’s premier, recently said Beijing was looking to provide more financial support to help Europe out of its debt crisis.

Companies are obliged to pay a tax on their annual emissions in the EU, which oversees the world’s largest carbon market.

The European Commission, the EU’s executive arm, has blamed the aviation industry for dragging its feet on the issue, and insists that the extra cost to transatlantic passengers would amount to only a few euros per ticket. In December the European Court of Justice, the EU’s highest court, found the bloc was within its rights to bring foreign carriers into its carbon market.

The US, however, has warned that it would “take appropriate action” if Europe does not amend the law, and some two dozen nations have signed a declaration opposing it. Beijing, which oversees the world’s fastest-growing aviation market, will add heft to such complaints.

The immediate impact on Chinese airlines with routes to Europe was unclear. Although the EU’s carbon scheme came into effect for airlines on January 1, Brussels has not started charging them. Those that do not comply, however, would face fines and persistent offenders could be banned from EU airports.

“China hopes that Europe will directly address our concerns, in light of the overall situation of global climate change, the sustainable development of international aviation and Chinese-European relations,” the Chinese aviation authority said, adding that it “will consider additional measures to protect the interests of our citizens and our companies”.