Aviation emissions will be included in the European Union's Emissions Trading Scheme from 2012 following an agreement in the European Council on Thursday.
A plan to include internal EU flights in 2011 - a year earlier than other flights - was dropped and the Council agreed to cap emissions at 100% of the average level for the years 2004-2006.
However, an exemption has been introduced for operators with very low traffic levels on routes to, from or within the EU, meaning many operators from developing countries with few flights to Europe will not be included.
A special reserve of free allowances for new entrants or very fast-growing airlines has also been added.
Environment Commissioner Stavros Dimas said: "Today's political agreement on including aircraft in the emissions trading scheme sends an important signal about the EU's determination to put in place concrete measures to combat climate change."
However, environmental groups accused the EU of backing down from the tough stance they took on emissions reductions during the UN conference in Bali last week.
Delia Villagrasa, senior advisor at WWF's European Policy Office, said planned ceiling on emissions, which is 90% above 1990 levels, was a "Christmas gift to the aviation industry".
João Vieira, of Transport and Environment, said: "If environment ministers get their way, the scheme simply won't cut emissions, and will end up being yet another subsidy to the aviation industry.
"It's a shameful end to a year filled with promise for action on climate change."
All flights between EU countries and flights taking off from or landing in an EU country will be covered by the scheme, and airlines will be regulated by the EU country in which they run the majority of their flights.
Airlines in breach of the regulations could face legal action.
The agreement will be formally adopted as a "common position" next year and will be sent to the European Parliament for a second reading before it can become law.
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