6 Feb 2012

China bans its airlines joining carbon tax scheme

6:28 pm on 6 February 2012

China has banned its airlines from paying the tax on carbon dioxide emissions imposed by the European Union.

From 1 January 2012, levies are being charged on flights in EU airspace based on their carbon emissions under the EU's Emissions Trading Scheme (ETS).

In a statement on China's central government website, the State Council says airlines would need express approval to join the ETS, which aims to combat global warming.

The council decree also says airlines must not increase their fares or add new charges for the scheme.

The BBC reports that the official ban comes just weeks after the China Air Transport Association said its members did not support the scheme, which China claims could cost its airlines $US124 million in extra annual costs.

The EU estimates the tax will raise air fares by between 2 and 12 euros per passenger.

The EU ETS has also come in for criticism from other countries, including the US and Canada.