India will urge its airlines to boycott the European Union's carbon charge scheme, raising the prospect of a global trade war over a law requiring flights in and out of Europe to pay for their greenhouse gas emissions.
A senior Indian government official told the Reuters news agency that India would soon ask local airlines not to buy carbon credits from or share emissions data with the EU, which says other countries are not doing enough to tackle this source of greenhouse gases.
China said in February its airlines were barred from participating in the EU Emissions Trading Scheme (ETS) unless they got government approval. Beijing has also suspended the purchase of $14 billion worth of jets from European maker Airbus.
India does not yet plan to ask airlines to cancel Airbus purchases, but that is possible if the dispute escalates, said the Indian official, who has direct knowledge of talks between the EU and other countries on the issue.
If the European Commission then stopped Indian airlines from flying to Europe, India would retaliate with similar moves and consider charging an "unreasonable" amount for flying over India, the official said on Monday.
The European Commission's climate spokesman Isaac Valero-Ladron said: "We will modify our legislation when there's an ambitious global agreement in force." The EU law obliging all airlines to buy carbon permits to offset their emissions took effect from Jan. 1, but no-one will receive a bill until April next year, after the amount of emissions has been calculated.
Tony Tyler, head of the International Air Travel Association, said the last thing the industry wanted was a trade war, but Europe needed to give some ground. "They're going to have to show some willingness to make concessions, otherwise it's not a negotiation ... What we've seen in recent weeks is a hardening of attitudes around the world on this issue," he said.
