Chinese airlines are opposed to the European Union's move to include the aviation industry in the Emission Trading Scheme which will likely cost global airlines billions of US dollars every year for their emissions.

The China Air Transport Association said in a statement on behalf of its members, including Air China, China Eastern Airlines, China Southern Airlines and the HNA Group, that significant flaws exist in the ETS if the EU includes the aviation industry in the scheme, and the rules themselves violated international law.

The statement, which was sent to the EU on March 10, said that the aviation industry's emission problems should be solved by consensus between governments and airlines rather than by a unilateral decision by the EU.

The association will urge the Chinese government to take "corresponding measures" to safeguard domestic airlines' interests and rights in the international market if the EU insists on the move.

The EU approved a proposal in 2008 to include the aviation industry in the ETS after emissions from the sector doubled since 1990. They account for around three percent of the EU's total carbon dioxide footprint.

Under the ETS, all flights departing or landing at EU airports will start emission trading from January 1, 2012, which means airlines that exceed their carbon dioxide limit will have to buy spare permits from more efficient businesses or face a fine.

The number allocated to airlines for free is 213 million metric tons next year and the cap will drop to 208.5 million tons per year from 2013, according to the EU.

Airlines will face a bill of up to 1.4 billion euros (US$1.98 billion) in 2012, rising to 7 billion euros in 2020, according to Thomson Reuters Point Carbon.

Thomson Reuters Point Carbon estimates that this will leave airlines facing an allowance shortfall of 88.5 million metric tons, with a cost implication of 1.4 billion euros in the first year of their inclusion in the ETS.

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