16-May-2011 11:32 AM

Qantas fined by EU due to lack of carbon price in Australia

Qantas will be forced to increase airfares to Europe from Jan-2012 after the European Union penalised the airline because Australia currently lacks a price on greenhouse gas emissions (AAP, Sydney Morning Herald, 14-May-2011). The aviation industry will be included in the EU’s Emissions Trading Scheme from 01-Jan-2011 and under changes made to the scheme, Qantas would be required to pay a tax on 15% of its carbon emissions from its nearest port of call, the airline claims. A Qantas spokesperson said the airline is likely to be hit twice on services to the UK, owing to Air Passenger Duty. The EU charge would be levied on the airline's last port of departure, which in Qantas' case would be usually be Bangkok, Singapore or Hong Kong. Qantas operates to London Heathrow and Frankfurt in the European Union. US airlines will also face the EU carbon impost and are likely to challenge its validity in the World Trade Organisation (The Australian, 14-May-2011).

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