Simon Buck, chief executive of the British Air Transport Association (BATA) warned there was a risk of the EU “distorting competition” if it waived payments by non-EU airlines as a way of avoiding retalitory action by states such as China and India that oppose the scheme.

“We are concerned that the EU could effectively look for some kind of a cop out and effectively deem all states that are complaining or refusing to be a part of the EU ETS can have some sort of equivalent measure which means the EU accepting some form of dispensation for them not complying with the EU ETS.

“If that is the case it means it is going to apply solely to EU airlines and it will place EU airlines that are competing internationally at a competitive cost disadvantage as they have to pay permits because they are based in the EU with airlines that have a dispensation. Essentially it increases the cost base for EU based carriers.”

Buck said this would be a “retrograde” step that could cost jobs and business for European airlines and urged EU policy makers to continue to push for a global emissions payment scheme that is enforced by ICAO.

One option, he said, was for the inclusion of carriers in the ETS to be "placed in abeyance" or for it to operate as a shadow scheme until a global framework is put in place.

Buck's comments come during a period of heightened international tensions over the controversial EU scheme with the US Senate Commerce Committee approving a bill that would allow the Secretary of Transportation Ray LeHood to prohibit US carriers from participating in ETS on the grounds it is challenges national soveriegnty.