THE European Union has bowed to international pressure by announcing that it will shelve the emissions trading scheme (ETS) until April 2014 when it may again re-introduce it.

But for this year at least the EU said it will not require airlines to submit their allowances in April 2013 for emissions generated during 2012.

EU climate commissioner Connie Hedegaard said that if the UN's International Civil Aviation Organisation (ICAO) failed to reach a global solution to lowering carbon emissions by next autumn, the EU would move forward with its scheme, reports Air Cargo World.

The International Air Transport Association (IATA) welcomed the move. IATA director general Tony Tyler, and former Cathay Pacific CEO, said "stopping the clock represents a significant step in the right direction and creates an opportunity for the international community".

IATA estimates that complying with the EU carbon tax - in which carriers that exceed the EU's carbon limits must buy credits - could cost the industry US$3.5 billion by 2020. Some non-EU governments have ordered their carriers not to participate in the emissions trading scheme (ETS). The Chinese and Indian governments went so far as say European Airbus should look elsewhere for orders if the EU persisted with its tax.

One feature carriers and governments alike found distasteful about the carbon tax was that it proposed to tax carbon emissions beyond its borders thus giving EU law extraterritorial powers. Another objection was that it usurped the internationally agreed role of the UN's International Civil Aviation Organisation (ICAO) to regulate these matters.