GERMANY’S biggest airline is blocking a British plan to make passengers pay for the environmental damage caused by their flights.

Lufthansa has rejected proposals put forward by British Airways for an emissions-trading scheme, under which airlines would buy permits to cover their production of carbon dioxide.

Britain strongly supports the scheme and, with the backing of France and the Scandinavian countries, hopes to introduce it within Europe by 2008.

The scheme would add up to £6 to the cost of an airline ticket, depending on the length of the flight and the market price of permits. The European Commission is studying the idea and is expected to produce firm proposals in September.

But Lufthansa is lobbying heavily against the scheme in Brussels and is trying to persuade politicians from Germany and other countries to vote against it. The airline has infuriated BA by issuing statements claiming that the scheme could cost airlines more than £1 billion a year and burden them with an “unacceptable cost risk”.

Wolfgang Mayrhuber, the chief executive of Lufthansa, said that climate change was a global issue and that it would be better to wait for a worldwide scheme covering all airlines rather than focusing on a solution within Europe.

He told The Times: “We want to understand the consequences before we go for emissions trading. It would be better to work on improving technology to reduce emissions as this will help everybody.”

But BA believes that it is important to act now on aviation emissions because the industry is fast becoming the scapegoat of environmental groups across Europe. Aviation is the fastest-growing source of greenhouse gases, and flights within Europe are due to double by 2020.

Andrew Sentance, the head of environmental affairs at BA, said that Lufthansa had exaggerated the costs. While he was unable to say how much the scheme would cost airlines, he insisted that it would be affordable and far cheaper than the alternative of a flat-rate tax on flights.

Dr Sentance said: “We accept that there are risks to airlines, but we can work to manage those risks. It is better to co-operate with the policymakers devising the scheme. That way we can influence the outcome.”

Roger Wiltshire, the secretary-general of the British Air Transport Association, which represents 13 airlines, including Virgin, bmi and BA, said that Lufthansa could undermine the whole initiative.

If airlines failed to co-operate with emissions trading, he said, the European Commission could seek to impose a tax on flights that would leading to a steeper rise in ticket prices.

Jeff Gazzard, the co-ordinator of the GreenSkies Alliance, a coalition of environmental groups, said: “Lufthansa are pretty determined not to pay one euro towards the climate damage their flights cause and are going all out to wreck the Commission’s proposals.”

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