The European Parliament announced Friday that its members had arrived at an agreement with the Council Presidency on the inclusion of aviation, including airlines from outside the EU, in the body's emissions trading system (ETS) beginning in 2012.
The deal still has to undergo other approval processes before it becomes mandatory.
Under the ETS it will be mandated that all flights, regardless of carrier, originating or landing in EU territory, will be included in the system. However, under the agreement, "small airline companies producing low emissions are excluded."
Under the scheme, eighty-five per cent of emissions certificates will be allocated for free "according to a common European benchmark," while the remaining 15% will be auctioned.
These measures are aimed at cutting emissions from 2004-06 levels by 3% in 2012, and 5% from 2013 onward.
According to the EP proposal, revenues generated from allowance auctions will fund climate change mitigation, research on cleaner aircraft, anti-deforestation measures in the developing world and low-emission transport.
The announcement has angered trade groups, both in Europe and abroad. The Association of European Airlines said the agreement will have "grave implications" on European commercial aviation "but not necessarily beneficial ones for the environment."
The US Air Transport Association said the inclusion of non-EU carriers "is a clear violation of international law" that "will be heading to the courts."