Garuda Seeks to Dodge EU Carbon Tax Scheme

Source : Jakarta Globe – January 17, 2012

National airline Garuda Indonesia said that they were not willing to pay the European Union’s emission trading scheme (ETS), which charges airlines for greenhouse gases produced by their jets flying to and from the EU, a senior official said.

“We actually do not want to pay the ETS because the consequences would be that we would raise
our ticket prices,” Garuda Indonesia finance director Elisa Lumbantoruan told The Jakarta Post on Sunday.

It would be financially viable for Garuda, however, to pay such a tax next year, Elisa said.

In addition, the airline’s vice president for corporate communication Pujobroto said that Garuda had reported their emission budget for this year’s Jakarta–Amsterdam route, which connects in Dubai, to the Dutch Ministry of Infrastructure and Environment.

Pujobroto said the airline would receive the final evaluation from the Dutch ministry in December.

“If we emit more carbon than the level allowed, we would pay the tax,” he told the Post.

However, Elisa said that they were optimistic that Garuda would not exceed the carbon cap because their aircraft were environmentally friendly.

Besides, he continued, the EU would only count the carbon emitted on the Dubai to Amsterdam leg of the route, he added.

The EU’s new aircraft emissions scheme came into force on Jan. 1 and the EU said that it would not back down from the new tax despite mounting international pressure to do so.

Several nations, such as China, India and the United States have criticized the new tax.

The ETS is an extension of a 2003 EU carbon trading scheme that covers factories, power plants and other installations. The scheme, which sets a limit on the level of emissions allowed, is a key part of EU’s climate change policy aimed at reducing global warming emissions.

Under the scheme, the facilities that emit more carbon than their prescribed limit will have to buy permits to cover their emissions.

But, if their emissions are less than the allowed limit, they would be allowed to sell spare permits from their emission allowances.

In a separate interview, Transportation Ministry spokesman Bambang Ervan said the Indonesian government was against the carbon emission scheme.

Bambang said that Indonesia was not alone as Transportation Ministries in the Southeast Asian Countries (ASEAN) were on the same page about the new tax system.

“Our decision in the last ASEAN working group last year is that we are against the ETS,” he added.

According to Garuda Indonesia’s official website, the flight to Amsterdam takes off from Jakarta everyday at 8:40 p.m., arriving in Dubai at 2 a.m. The aircraft then departs again at 3:15 a.m., arriving at Amsterdam’s Schiphol airport at 8 a.m.

Elisa said that the ETS did not discourage the airline’s intention to add to its fast growing network over the next four years with new routes to Frankfurt, London, Paris and Rome.

“If the routes are profitable, we will open them,” Elisa said. (nfo)

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