The haze in the air may not be due to emissions from aircraft engines. There is a dust-up between EU regulators and other nations over a scheme to add an emissions tax to all airlines that fly to or from member states.

From January 1st, the EU will include all airlines flying to and from member states in their emissions tax scheme aimed at reducing greenhouse gases. The carbon tax as it is called is a way for industries to reduce their output of greenhouse gasses while accounting for excess emissions through the payment of credits. Companies that achieve lower emissions than the minimum standards can sell their excess credits to companies that exceed the limits.

Though the scheme has been around for several years in Europe, this is the first time that the airline industry will be included. This has not stood well with the airlines, their industry advocates and foreign governments, all of whom are threatening action from legal injunctions to trade retaliation. Still, little stands to deter the EU from moving forward with its plans to include airlines in its carbon tax scheme come 2012. The aviation arm of the United Nations, the International Civil Aviation Organization (ICAO), is reviewing the matter. ICAO sets global airline practices and standards but any outcome from this review will not be legally binding.

Non-EU airlines and their home countries are at odds with the EU law. Airlines argue that it's not fair to charge airlines for flights that cover airspace outside of the EU. Many countries insist that the EU is in violation of international trade laws by expanding its regulatory jurisdiction beyond European borders. In a move recognized as the strongest rejection of the EU measure, the U.S. House of Representatives recently passed a bill that essentially would make it illegal for U.S. airlines to comply with the EU carbon emissions law. Given that the measure still has to pass the U.S. Senate and be signed by the President, it is currently seen as a largely symbolic move to express opposition to the emissions trading scheme. But with the EU appearing determined to go forward with its plan, symbolic gestures may turn to action.

Airlines are working through ICAO to establish a series of resolutions opposing the measure. Airlines are not opposed to legislation aimed at reducing carbon emissions, but they find the unilateral action by the EU to be troublesome. The added costs of buying credits or paying penalties for non-compliance would surely be passed on to flying customers, they argue. A growing number of governments are also expressing their disapproval. According to Reuters, 26 nations oppose the EU regulations. They include: Argentina, Brazil, Burkina Faso, Cameroon, Chile, China, Colombia, Cuba, Egypt, India, Japan, South Korea, Malaysia, Mexico, Nigeria, Paraguay, Peru, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Swaziland, Uganda, the US and the United Arab Emirates. Canada is expected to join in opposition as well.