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            october 15, 2019

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China's airlines refuse to pay the European Union's new carbon tax


Taking advice from their industry association, China's airlines say they will refuse to pay the European Union's new carbon tax, while Hong Kong's Cathay Pacific says it is considering adding surcharges or a fare increase offset the tax, according to Reuters.
"China will not cooperate with the European Union on the ETS, so Chinese airlines will not impose surcharges on customers relating to the emissions tax," Cai Haibo, deputy secretary-general of the China Air Transport Association.
The association represents China's top four airlines: Air China, China Southern, China Eastern and Hainan Airlines.
The air cargo industry, particularly Asian carriers, face weak demand and overcapacity in 2012, mirroring a similar environment seen last year. CATA estimates the EU carbon rule will cost Chinese airlines $123 million this year and more than triple by 2020.
Europe's high court upheld the EU right to tax despite American airlines' pleas that the tax infringes on the sovereignty of other nations and ignores the Chicago Convention pact on the governance of international aviation.
Under the tax, airlines must now buy permits for carbon produced during entire flights, including over non-EU airspace, that land or take off from airports in the 27-nation EU.

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