Aviation carbon tax compromise wins industry support, eco-condemnation

THE proposal on aviation carbon emission taxes that has received industry approval, even acquiescence from Europe, but displeased environmentalists because it only "requires" countries to make a decision on finding a market-based mechanism for reducing emissions by 2016.

EU officials agreed at UN talks in Montreal to only include emissions from flights over European airspace in the bloc's Emissions Trading Scheme (ETS), said the EU's top climate official Jos Delbeke.

Under the EU's original law, CO2 emitted throughout the journey would be covered by a trading scheme, in which airlines were obliged to buy carbon credits, a feature China, the US and India considered a violation of national sovereignty.

This is the likely proposal to be tabled at the UN's International Civil Aviation Organisation plenary session in Montreal later this month.

"You could call it a defeat for Europe," said Christian Egenhofer, senior fellow at Brussels-based think tank the Centre for European Policy Studies.

EU climate chief Connie Hedegaard described the move as "not perfect but progress" on her Twitter account.

"This is not about winning or losing. This is a multilateral negotiation where you have to give and take," her spokesman Isaac Valero-Ladron added in an emailed statement.

Ms Hedegaard's plan to tax carbon aviation emissions beyond EU territory caused an uproar.

The United States went to the European Court of Justice and lost, with the EU successfully arguing that jurisdictions can impose conditions abroad if those parties subject to those conditions wish to do business with Europe, citing US-imposed airline security measures as example.

China simply suspended billions of dollars' of purchases of Airbus jetliners from Europe and warned of other possible retaliatory measures if Europe went a head with its scheme to levy taxes over non-EU airspace.

Faced with legal challenges from US lawmakers and airlines as well as the suspension of Chinese orders for up to 45 Airbus jets, European governments broke ranks and suspended its charges on international flights to and from Europe.