Possibility of Trade War Over Carbon Emissions

European airlines have warned of a damaging trade war with the US, Russia and China if Brussels pushes ahead with plans to include carriers in the emissions trading scheme next year in a move that will put fares up by €40 and cost the industry €1.1bn (£980m).

The warning comes as US airlines prepare to launch a legal challenge against the ETS in Luxembourg next month, adding to unease from the Russian and Chinese governments. From January carriers flying in and out of the European Union must join power companies in the EU in the cap-and-trade system, where they will have to acquire carbon credits to account for the emissions generated by their flights.

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