The European Court of Justice has ruled that all airlines flying to and from Europe with have to pay for any carbon dioxide emissions above an agreed limit as part of the Emissions Trading Scheme (ETS).

This controversial decision to include non-EU airlines in the ETS has been strongly opposed by economic powers worldwide. They say that the control of emissions should be left to the International Civil Aviation Organisation.

The ETS will start on 1st January 2012 and function under a credit system. Airlines will be given credits to cover most of their emissions, but they must buy more to cover any further output.

European airlines fear a retaliation from other countries which may include other taxes being imposed on them. The US said it goes against the EU-US open-skies agreement. US Secretary of State Hillary Clinton said America would respond with “appropriate action” if the scheme went ahead.

However, Europe’s highest court insisted that the ETS did not infringe on the sovereignty of other nations, as it only applied to carriers when they were operating within the EU.