The so-called emissions trading scheme, which is to be voted on by the EU lawmakers next week, aims at cutting aviation pollution by forcing airlines to lower emissions by 3.0 percent in the first year and by 5.0 percent from 2013.

Airlines can exceed these caps, but they would have to pay for permits to do so.

All airlines -- European and non-European -- flying in and out of the EU would be brought into the scheme from 2012.

In addition, between 2013-2020, airlines also would have to pay for 15 percent of their emissions.

Officials from the International Air Transport Association, which represents the interests of the airline industry, told AFP that while the industry supported the principle of an emissions trading scheme, it wanted a global standard to be set by the International Civil Aviation Organisation (ICAO).

They said IATA was opposed to EU's "unilateral" plan, which it they said violated an international aviation convention.

IATA Director for Government and Industry Affairs Carlos Grau Tanner said the EU's move could push non-European states to seek redress through global governing bodies such as UN-agency ICAO or even the International Court of Justice.

But beyond legal tussles, there could also be diplomatic flare-ups.

"What could happen is a typical trade war where they retaliate through completely different channels. You impose this on me, I'll find something else to hurt you. That's exactly the position that airlines don't want to be in," said Grau.

He noted that such a scheme would require an airline flying from outside Europe -- but making a stop at an EU airport -- to pay a fee to pollute, even though the flight was headed for a non-European destination.

Indications are already pointing towards fierce opposition led by the United States.

When the idea for the emissions trading scheme emerged last year, the ambassadors of Australia, Canada, China, Japan, South Korea and the United States raised their concerns in a letter to the German ambassador to the European Union. Germany at the time held the rotating EU presidency.

"Inclusion of our airlines in the EU scheme without the consent of our governments would potentially violate EU Member State international obligations under the Convention on International Civil Aviation, as well as bilateral agreements," said the letter, which was also circulated to other EU representatives.

At an ICAO General Assembly meeting last September, countries lined up behind the US to oppose the EU initiative.

However, the EU pushed ahead as it felt that ICAO was dragging its feet on a global standard.

IATA spokesman Anthony Concil said he was confident that ICAO could deliver on a global solution.

He also said the current case was reminiscent of a long-drawn US-EU trade war on aircraft noise rules almost a decade ago.

In 1999, the EU banned so-called hush kits, or mufflers fitted on older US-made planes. The US ended up taking the case to ICAO, before the EU finally dropped the legislation in 2001.

"At a time when airlines are already feeling the heat from higher fuel prices, getting dragged into a trade war is the last thing that airlines need," said Concil.

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