European Union officials have reached a preliminary deal to include airlines flying to and from the EU in the bloc's strategy to cut carbon dioxide emissions - a move that could raise the cost of flying and provoke a dispute with the United States. Under the deal, reached by representatives of the Slovenian EU presidency and the European Parliament late Thursday, all flights starting or landing in the EU, including intercontinental flights, will be included in the EU's emission trading system from 2012. Pollution permits granted to airlines would initially be capped at 97 percent of their average emissions for 2004-2006. From 2013 the cap would drop to 95 percent. Eighty-five percent of those emission certificates will be allocated for free, while the rest will be auctioned. Airlines that want to fly - and pollute - more will buy more permits. Small airline companies producing low emissions will be excluded from the program. The revenues generated by the auctioning will be used to finance the fight against climate change, research into clean aircraft and other environment-friendly policies, according to the deal, which still needs to be formally approved by the EU governments and the European Parliament, which will vote in July. European airlines complained Friday that new EU rules on carbon dioxide emissions will cost them 4.8 billion euros ($7.6 billion) a year and threaten their future. Under an agreement reached Thursday, the European Union will set quotas on carbon dioxide, the main gas that causes global warming, on all airlines - those from Europe and abroad - from 2012. They would then have to pay for these permits to pollute from 2013. “This decision is going to cost us 4.8 billion euros a year,” said Francoise Herbert, spokeswoman at the Association of European Airlines (AEA), which represents 33 firms including Air France-KLM, British Airways and Lufthansa. “It all has to be compared with the 3.7 billion euros profit that our companies made in 2007, which was a very good year. And 2008 is looking quite different with the hike in fuel prices,” she said. The AEA believes the quota system is essentially a tax that will encourage foreign airlines to avoid the 27 nation EU whenever possible. “Companies flying from New York to Hong Kong will transit by Dubai rather than Frankfurt,” Herbert said. “European airports are likely to suffer.” Carbon dioxide emissions from aircraft in Europe are to be limited in 2012 to 97 percent of their levels in 2005, dropping further to 95 percent by 2020.
