China has banned its airlines from paying the new European Union carbon charge, state news agency Xinhua has reported - stepping up the international battle over the scheme.
The levy applies to all airlines flying to and from EU countries. Companies that do not comply face fines and ultimately could be banned from using EU airports.
The Civil Aviation Administration of China (CAAC) said on Monday that airlines were not allowed to pay the EU charge, increase freight costs or add other fees, according to Xinhua. It cited authorisation from the state council, China's cabinet.
Meanwhile, the European Commission said on Monday it will stand by a new law that imposes charges on airline carbon emissions.
"We are not backing down and this legislation will apply to companies operating in Europe," said Isaac Valero-Ladron, spokesman for EU climate action commissioner Connie Hedegaard.
He warned that the law carries fines for airlines that ignore it.
With inputs from The Guardian and AFP.