IATA chief warns EU over 'illegal' carbon plan

Global airlines warned the European Union on Sunday of the risks of a possible trade spat over "illegal" plans to charge the industry for emissions, saying they echoed environmental failures of the past.

Comments from the International Air Transport Association stepped up a war of words as European Climate Commissioner Connie Hedegaard refused to back down over EU plans to make airlines buy permits for carbon emissions above a certain level.

"She would do well to listen to the growing chorus of countries strongly opposed to an illegal extraterritorial scheme," IATA director general Giovanni Bisignani told Reuters.

"The last thing that we want to see is a trade war. Chinese delegates were in Brussels recently; many other countries have formally expressed concerns," he said.

Industry and diplomatic sources have said China threatened retaliation against European airlines and planemaker Airbus if the EU goes ahead with its plans.

"We have to absolutely avoid retaliation because the risk of retaliation for a Europe that is in survival mode would be the kiss of the death," Bisignani said.

"I hope that, once Europe starts receiving this kind of strong message, they would understand that you cannot go on with an illegal scheme. This is illegal," he added.

He said the scheme was the latest in a series of flawed moves. "This will simply be Copenhagen 2," he said, referring to the failure in 2009 to reach a binding global climate deal.