PaylessFlights.com

From January 1st this year airlines flying to the 27 European Union countries including UK are under the EU Emission Trading Scheme, making carriers that exceed their carbon limit to pay a carbon tax.

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.

Most of the airlines responded to this with increased taxes. Lufthansa and Delta were first, followed by Continental, United, US airways and American airlines. Airlines will not disclose detailed fees and taxes due to US Department of Justice regulations.

For now the increase is not significant and there is a possibility to change. US and China have expressed opposition to the new European laws, and the US House of Representatives have approved a law that will prohibit the US airlines of paying the fee.

On the other side Europe stands firm on the airlines emissions. The European Commission said that airlines that do not follow the new law to account for their emissions of greenhouse gases could face being banned from European airports.

Unfortunately all this is already passed to the consumer and higher fares and taxes are in effect. However, given the huge resistance from USA and China, it is unclear how the situation will develop.