India Says 27 Nations to Discuss Retaliation on EU Airline Levy

India, China and the U.S. will be among at least 27 nations that will discuss retaliatory steps following the European Union’s extension of its emissions market to aviation, according to an Indian aviation ministry official.

New taxes and charges on European airlines, as well as the re-opening of bilateral treaties governing flight rights will be considered at the two-day meeting in Moscow, due to start Feb. 21, the official told reporters in New Delhi today. He declined to be identified citing government policy.

India will also protest the EU’s decision, which came into effect on Jan. 1, when Prime Minister Manmohan Singh and EU President Herman Van Rompuy hold summit level talks in New Delhi tomorrow, the official said. The Moscow meeting follows a statement adopted in November by the United Nations’ International Civil Aviation Organization calling on the EU to exempt overseas airlines from the levy system, which is designed to curb pollution.

The EU decided in 2008 that aviation should become part of its cap-and-trade carbon program after airline discharges in Europe doubled over two decades. Emissions from international aviation now account for 2 percent to 3 percent of global greenhouse gas discharges, according to the EU.

Airlines must monitor and report their emissions on all flights into and out of Europe each year, and purchase carbon permits to cover these discharges. Airlines will be given about 85 percent of their permits free of charge in 2012. One permit is equivalent to one metric ton of carbon dioxide.

China has already banned local carriers from supplying emissions data to the EU, while U.S. airlines unsuccessfully tried to prevent the extension of the market mechanism in a legal challenge last year. Non-European governments have said the system impinges sovereignty as the EU monitors and charges emissions outside of Europe, such as those generated on the final leg of a flight from Asia.

Only three Indian carriers, state-owned Air India Ltd., Jet Airways (India) Ltd., the nation’s biggest, and Kingfisher Airlines Ltd. operate services to Europe.

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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