As fuel prices continue to put the squeeze on the airline industry, it faces another financial blow tomorrow when Brussels is set to ratify a green treaty that will see fares climb even higher.

The latest proposals for an emissions trading sceme (ETS) will be discussed by European MPs in a bid to establish how to install an environmental levy. Airlines fear this could spell disaster for some carriers who are already struggling with oil prices.

It has been estimated that when the tax becomes law, the average family will end up paying around £45 more for the cost of the holiday.

The levy, which will affect all flights flying to and from European airports, comes on top of  raised air passenger duty in the UK last year.

Under the ETS which it is thought will cost the industry around £2.8 billion a year, airlines will pay for the gases they emit via a “carbon permits” system. Each carrier gets a ceiling, based on past emissions, and a cap established individually in 2012. Airlines exceeding the cap will then have to buy carbon credits. But staying under the cap will still cost �" airlines will still have to buy permits for 15% of their carbon output.



By Dinah Hatch