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U.S. and India Dig In against EU Air Carbon Charge

By Valerie Volcovici and Devidutta Tripathy WASHINGTON/NEW DELHI (Reuters) - India voiced firm opposition on Tuesday to EU plans to impose a scaled-back carbon charge on flights over European airspace while a senior U.S.

By Valerie Volcovici and Devidutta Tripathy

WASHINGTON/NEW DELHI (Reuters) - India voiced firm opposition on Tuesday to EU plans to impose a scaled-back carbon charge on flights over European airspace while a senior U.S. lawmaker said the EU proposal runs afoul of a law intended to shield U.S. airlines from such charges.

The European Commission, the EU executive, last week proposed to make all airlines pay for emissions over European airspace in a retreat from a suspended EU law that covered the duration of flights using EU airports.

India said the EU proposal defies a global aviation agreement hammered out in Montreal earlier this month at an assembly of the International Civil Aviation Organization (ICAO), the U.N. body in charge of civil air travel.

"What they (the European Commission) have now done is in total conflict with what the ICAO has decided. The multilateral body has to intervene in this matter," K.N. Shrivastava, India's aviation secretary, told Reuters.

Along with China, India has defied the European Union move, even refusing to submit emissions data before the EU suspended it for a year amid threats of a trade war.

The EU proposal also could push the U.S. government to invoke a law signed by President Barack Obama in November 2012 that would shield U.S. airlines from what Transportation Secretary Anthony Foxx may deem an unfair charge.

Republican Senator John Thune, who introduced the measure in the Senate, will raise the issue in a letter to Foxx and other U.S. officials, his office said. The law gives the secretary of transportation the authority to ensure that U.S. carriers are not penalized by unilateral EU emissions charges.

"Senator Thune believes that any such effort by the European Commission would be in direct violation of the legislation that was signed into law last year to hold U.S. air carriers harmless from such unilateral actions," Thune spokesperson Andi Fouberg told Reuters.

ICAO negotiators this month reached a consensus on a market-based system to curb carbon emissions from airlines by 2020, but rejected a proposal to let Europe apply its own plan to foreign carriers in the meantime. The deal averted a looming global trade dispute over aviation emissions.

U.S. airlines hope that because the European Commission's most recent proposal was a draft, the Europeans will revise the plan in line with what was agreed to at ICAO, according to Vaughn Jennings, spokesman for the industry group Airlines for America (A4A).

The European Commission said it is acting in good faith.

"Limiting it to EU airspace and not touching on somebody's else's airspace. That's our interpretation of what was said in Montreal," Artur Runge-Metzger, director for international climate strategy in the Commission's climate department, told Reuters.

For the proposal to go into effect, it needs the approval of member states and the European Parliament.

(Additional reporting and writing by Barbara Lewis in Brussels; Editing by Will Dunham)

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