Bans State-Run Airlines From Taking Part In Carbon Tax Scheme

China has imposed an outright ban on its flagged airlines from taking part in the EU's Emissions Trading Scheme, saying it is in violation of United Nations Framework Convention on Climate Change and international civil aviation regulations. The country's airlines are also prevented from using the scheme as a reason to boost ticket prices.

A report appearing in Business Week indicated that the EU is hoping for a negotiated resolution to the issue, as does the the China Air Transport Association. "I believe all sides can negotiate and find a solution," CATA vice president Chai Haibo said at a news conference Monday, adding that he could not "imagine" the EU grounding Chinese flights.

The U.S., India, and other nations have discussed sanctions against the EU for imposing the tax, and U.S. lawmakers have passed legislation barring U.S. airlines from participating in the program. The Chinese airline group has begun work on mounting a legal challenge to the EU-ETS in Germany which will include China's three largest state-controlled carriers.

The EU Court of Justice has consistently held that the Union is within its rights to impose the tax on all airliners operating in any way in European Union airspace.

FMI: http://ec.europa.eu/clima/policies/ets/index_en.htm