Airlines that fly to Europe will have to pay a lot of money in carbon tax. This means airfares are going to be more expensive.
The world's carriers thought it might not be legal to include airlines based outside Europe in the European Union's emissions trading system (ETS).
They took the case to the European Union Court of Justice, but they lost.
Any airline flying to and from Europe must buy special permits to offset global warming. It will cost the industry HK$9.3billion a year.
Andrew Herdman, a spokesman for the Asia-Pacific Airlines, said the fight was not over. 'Foreign governments are unlikely to accept this interpretation of the validity of the ETS being imposed on foreign airlines.'
However, both sides in this fight say the principles at stake are more important than the money.
Tony Tyler, the head of the International Air Transport Association, said many countries are worried that this ruling crosses the line of their independence.
China fears its carriers will have to pay 800 million yuan (HK$974.6million) more each year on flights to Europe, and that this could be four times as much by 2020. 'If they charge us, we will charge back,' Wei Zhenzhong, the secretary general of the China Air Transport Association, told an industry conference in Hong Kong.
Cathay Pacific said the scheme would only make flights more expensive for passengers and not solve pollution problems.