Chinese bars its airlines from paying EU carbon tax

The Chinese government on Monday announced it has prohibited state-owned airlines from paying EU-imposed charges on carbon emissions.

The move by the Civil Aviation Administration of China, which is the globe’s fastest growing aviation market, is said to trigger a dispute about the cost of combating climate change.

Fitch warned in December that this clash could also spiral into a possible global trade war.

But, China could have abnormally strong leverage in a potential dispute as its airlines carry vast quantities of Chinese and Asian tourists to Europe and back, which would mean any disruption could hurt the EU’s travel industry.