Countries opposed to an EU law forcing the world's airlines to pay for greenhouse gas emissions agreed on a basket of retaliatory measures, adding to a series of threats that have raised the prospect of the globe's first carbon trade war.

But the EU dismissed the threats as hypothetical and Russia's deputy transport minister also said the countries, which include China, India and the United States, were free to choose which of them they would actually use.

The array of steps include barring national airlines from participating in the European Union's carbon scheme, lodging a formal complaint with the United Nations' International Civil Aviation Organisation (ICAO), ceasing talks with European carriers on new routes and imposing retaliatory levies on EU airlines.

Every state will chose the most effective and reliable measures that will help to cancel or postpone the implementation of the EU ETS (Emissions Trading System), Valery Okulov, whose ministry hosted the meeting attended by more than 20 nations, told a news conference.

Russia has a particular measure it can use against Europe. Okulov, the former chief executive of Aeroflot, said Russia could take out an old weapon against European carriers: overflight fees on routes over Siberia.

Russia rescinded the onerous fees during the last decade, a move it linked to long running talks for World Trade Organisation membership, which it received late last year.

Since the start of this year, all airlines using EU airports are required to buy permits under the ETS, although they will not actually face a bill until next year. In addition, they will at first be handed 85 percent of allowances for free.

The European Commission reiterated it was standing by its law and said the Moscow meeting had delivered only negatives.

Unfortunately, our question for Moscow meeting participants remains unanswered: what's your concrete, constructive alternative? Climate Commissioner Connie Hedegaard said in a tweet.

Those opposing the scheme have debated the issue within the official ICAO framework and also in informal talks, dubbed the coalition of the unwilling, such as the two-day Moscow meeting, which ended on Wednesday.

Okulov said Saudi Arabia would organise the next unofficial meeting later this year.

Many nations and the EU have said the best arena to resolve the dispute would be ICAO, which has been working on developing its own scheme to curb rising aviation emissions.

The EU has always said it would have no need to make all airlines using its airports pay for carbon under its ETS if a comprehensive global scheme were in place.

At a regular briefing in Brussels, Isaac Valero-Ladron, EU spokesman for climate action, reiterated that the EU will review its legislation if there is an ambitious global agreement in force because we would be covered by this agreement.


Russia is among those to agree the best forum would be ICAO, but still took a tough line at the Moscow talks.

We have demonstrated our determination to ask for a cancellation or postponement of the EU ETS in regard to airlines, Okulov said.

For all the talk, there were hints of a softening.

A list of signatories seen by Reuters showed only 23 nations, compared with 26 at earlier coalition of the unwilling talks.

The final Moscow joint declaration also dropped proposals from an earlier draft, including sending a letter to the EU stating individual nations inability to join the EU ETS, as well as a clause on reopening trade agreements in other sectors to pressure EU industries.

As had been expected by many observers, the meeting also stopped short of invoking ICAO'S formal dispute resolution procedure, a lengthy process which could delay the quest for an ICAO-based global scheme.

But feelings are still running high over what some nations view as an infringement on sovereignty.

China's central government State Council, or cabinet, earlier this month said all airlines were barred from taking part - unless they received government approval to do so.

The Commission has noted Chinese airlines have already signed up to a registry for eligibility for free allowances, while airlines have already begun passing on the extra cost to passengers through fare increases.

Representing the airlines, the International Air Transport Association called on the EU to be sincere facilitators at ICAO in the quest for a global framework.

We don't want a trade war. But Europe's unilateral and extra-territorial EU ETS plans are clearly not acceptable to non-EU governments, said Tony Tyler, IATA's director general and CEO said in remarks emailed to Reuters.

(Additional reporting by Barbara Lewis in Brussels; Writing by Melissa Akin; Editing by Elizabeth Piper and William Hardy)