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Wed, Dec 28, 2011

India Weighs Response To EU Carbon Tax

Warns Carbon Scheme Will Bring Retaliatory Action

India, one of almost two dozen nations gearing up for a fight with Europe over the imminent launch of a unilateral carbon licensing system, warns that the unilateral action by Europe could lead to international retaliation. Official sources now say India will decide on a formal policy sometime in February, according to a report in The Economic Times of India.

Following a recent interministerial meeting which included Indian government and airline officials, the Times quotes an unnamed, high-level government official as warning, "The EU has legislated without consulting the rest of the world and they might have to face retaliatory measures from other countries of the world. Therefore, they might have to reconsider whether their call is worth taking."

The Indian government estimates the new taxes imposed by the EU will cost India's airlines an additional four billion rupees per year, equivalent to about $75 million US, and could rise further as Indian carriers expand service in the future. While the new carbon license fees officially start January 1, airlines won't receive invoices until early 2013, so we'll hear plenty more on this story.

FMI: www.ibef.org/industry/aviation.aspx

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