Carbon tax may push up airfare to EU nations

January 2nd, 20126:32 pm @

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MUMBAI: From January 1, carbon emissions by aircraft flying into 27 European Union (EU) countries, including the United Kingdom, will be measured as the airline industry will come under the EU emission trading scheme, making carriers that exceed their carbon limit liable to pay a carbon tax.

There will be no immediate impact on airfares as the tax will come into effect only after an airline has crossed its carbon emission limit as laid down by the EU. But if an alternative is not worked out by countries opposed to the EU scheme, the one-way cost of an air ticket from India could go up by about Rs 350-750, depending on the length of the trip, say sources.

Under the scheme, emissions will be measured for the entire length of the trip, irrespective of whether the flight begins or ends at an EU airport. So, for a Mumbai-London flight, the carbon emissions will be measured from the time the aircraft starts moving in Mumbai airport. Consequently, the quantum of carbon tax levy, say on a Dubai-London flight will be lesser than that on a Mumbai-London one.

As on Tuesday, none of the airlines in India that fly to Europe had received communication from EU on the carbon emission limit. Once an airline crosses limit, it will need to buy carbon credits through the emission trade scheme.
Meanwhile, the Indian government has continued its fight against the said scheme. A meeting was held by ministry of civil aviation (MOCA) officials with representatives from two countries on Tuesday, as MOCA continues to garner support globally against the EU scheme. In September, India along with 26 countries, including the US, China, Canada and Brazil had signed a joint-International Civil Aviation Organisation (ICAO) declaration opposing the EU scheme.

“Currently, talks are on with countries opposed to the EU scheme to work out an alternative emissions plan to address the issue of carbon emissions,” said an official from the civil aviation ministry. The issue will be taken up again in a meeting with other countries in January and in February, concrete steps will be taken in co-ordination with other countries to work out an alternative against the EU scheme, the official added.

The average carbon emissions per passenger, flying economy class, on a Mumbai-London flight is about 600 kg. Irrespective of the EU-emissions trading scheme, if an economy-class passenger flying this route wants to offset the emissions on account of his/her air trip, the cost of emission reduction credits will be about Rs 383 (the number was arrived at by using an airline carbon emission calculator).

For every business class passenger, an aircraft burns about 1,200 kg of carbon dioxide and for a first class passenger it is 1,800 kg. That is, an aircraft, burns 1,800 kg of carbon-dioxide to fly a first class passenger from Mumbai to London, a distance of about 7,200 km. To offset the damage, a business class and first class passenger will need to buy credits worth Rs 795 and Rs 1,180 respectively.

Article source: http://timesofindia.indiatimes.com/city/mumbai/Carbon-tax-may-push-up-airfare-to-EU-nations/articleshow/11333167.cms