India joined China in asking its airlines to boycott the European Union’s carbon scheme, confirming an escalation in the diplomatic row over the issue. A Senior Indian government official, interviewed by Reuters, claimed that the Indian government is awaiting formal approval from several ministries to implement the order to airlines not to comply with the EU ETS rules.
Opposition to the ETS could damage the chances of the Free Trade Agreement (FTA) India is negotiating with the EU.
Although the Europe’s highest court ruled last December that the EU law does not breach international agreements, foreign governments, including the United States, China and India, claimed the EU decision is exceeding its legal jurisdiction. The EU scheme has been widely criticised also by the aviation industry. The escalation of international tension over the EU’s scheme has accelerated efforts at the ICAO (International Civil Aviation Organization) to deliver a global plan while directing a working group to continue studying the options and report back in June. In fact, the European Union is available to modify its law if the ICAO will come up with a convincing alternative. This week, the EC also clarified that airline operators covered by the market scheme will be allowed to ‘bank’ unused offset credits. Answering this question, a spokesman for the European Commission confirmed that under Art 11a, “airlines can carry over their 15 per cent offset entitlement from 2012 into subsequent years”. This provision will contribute to potentially cutting the sector’s compliance costs by allowing operators to use cheaper foreign credits to offset emissions.
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