Russia Begins Retaliation Over The E.U.'s Carbon Emissions Trading Scheme; Denies Overflights

Russia has denied European airlines overflight routes from Europe to Asia as part of its retaliation to the European Union's Emissions Trading Scheme, ETS, for carbon emissions. This move makes Russia the latest in a long line of countries enacting retaliatory measures or considering such, 30 nations have joined the Delhi Declaration opposing the E.U.'s emissions tax including China, Russia, India and the U.S.

Both Lufthansa and Finnair had applied for more overflights to meet rising demand for cargo and passenger traffic between Europe and northern Asia.

Congressional leaders in the U.S. are considering legislation that would block U.S. based airlines from paying the tax. Earlier this week congress heard testimony about its proposed legislation.

Many around the world see as a cash grab by European regulators that will do nothing for the environment. The U.S. has already filed a suit at the World Trade Organization citing the ETS as a violation of international law.

The E.U.'s ETS will require airlines operating in European airspace to pay a tax for the carbon emissions. The ETS tax went into effect earlier this year and is expected to raise roughly $2 billion annually by 2020 as credits are gradually decreased.

So far, China, India and Russia have taken retaliatory measures and 12 other countries are considering the same in what is feared to become a global trade war.

China has banned Chinese airlines from buying Airbus airplanes resulting in China Eastern Airlines buying 20 Boeing 777's instead, and India has held up flights by European airlines and denied some charter European charter flights. Brazil is considering slapping a tariff on European aviation equipment, and 5 nations have began making European carriers wait to land after other traffic, costing carriers a lot of money in jet fuel.

The E.U. commission responsible for the ETS has said it will not back down unless the U.N. and its ICAO take concrete measures to taken global pollution.

So far only a limited amount of new overflight routes and traffic has been turned down by Russia, both Lufthansa and Finnair said they expect to take longer routes as a result but that they will complete their flying obligations.

The European Commission said only 10 airlines - all from China and India - had so far had failed to submit emissions data. Some 1,200 have complied.

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