Cap-and-trade programme to go ahead

The European Union's cap-and-trade carbon credits programme is set to go ahead, as a legal bid from US airlines failed to deter the legislation.

The EU law, that will charge airlines flying into Europe for their carbon pollution, has been hailed by environmentalists who describe the ruling as the first step in controlling carbon emissions in a key area. However, Fitch ratings agency believe the ruling could trigger a global trade dispute.

Aviation is the fastest-growing source of carbon pollution, and this is the biggest move seen yet from any country or regional bloc. Under the scheme, airlines will be allocated pollution permits estimated at slightly less than its average historical emissions record. Airlines can then buy and sell permits depending on whether they have reduced or exceeded their maximum carbon level. This is calculated on the entire route of the aircraft landing in the EU, and not just for the distance covered in EU airspace.

Aviation figures were forthcoming in highlighting their disappointment with the ruling, the National Airlines Council of Canada responded said: "While we respect the court’s ruling and authority, the NACC is nevertheless disappointed."