Chinese airlines are preparing to file a lawsuit in German courts against the European Union's emission trading scheme (ETS), which must be adopted by global airlines in January. The scheme, which will levy emission charges on all flights within, to, and from Europe, is expected to have a big impact on carriers in developing countries such as China and India, due to their fast-growing volume of air traffic. 'The ETS will cost mainland carriers 800 million yuan (HK$973 million) in 2012 and increase rapidly to 3 billion yuan by 2020,' China Air Transport Association secretary general Wei Zhenzhong said at the Greener Skies Aviation and Environment Conference in Hong Kong yesterday. Wei said an Air China-led consortium was hiring a lawyer in Europe to mount a legal challenge to the scheme in Germany. If the dispute was not resolved, he warned, it could shape up into a political conflict and even an international trade war. US lawmakers have proposed legislation to prohibit all American airlines from taking part in the ETS next year. The bill is expected to be passed this autumn and follows a lawsuit filed by US carriers against the EU in 2009, saying the scheme violated international law. Thai Airways International president Piyasvasti Amranand said the scheme penalised 'the good guys'. The airline industry claims to be the only sector already committed to aggressive carbon reduction targets by improving fuel efficiency by 1.5 per cent annually through to 2020, capping carbon emissions from 2020, and halving net emissions by 2050. The targets were set despite forecasts that global passenger numbers would grow to 16 billion in 2050 from 2.8 billion this year, International Air Transport Association director general Tony Tyler said. Airlines were granted 85 per cent of allowed carbon emissions for 2012 under the EU scheme yesterday, but carriers will have to buy credits from EU governments and international credit markets to cover the remainder of their carbon footprint. But by 2013 just 1.5 per cent of those credits will be allowed to be bought outside the EU, prompting fears the money will go into EU coffers and not environmental projects. 'We've cut down the proportion [allowed to be bought outside the EU] because the EU wanted to have more [carbon] reduction in Europe,' said Mary Veronica Pleterski, director of the European and International Carbon Markets.