e fuel surcharge on its European flights to offset the cost of the Emissions Trading Scheme.

A surcharge of $3 per passenger for flights into and out of Europe will take effect for travel from March 1.

The scheme, imposed from January 1, levies a charge on flights in EU airspace based on carbon emissions. Each airline is allowed to emit some carbon dioxide for free each year, but they will have to buy 'carbon credits' if they exceed their allowance.

Etihad said the new charge was calculated based on the additional cost for the carbon credits the airline will be required to purchase for 2012 in order to comply with the ETS. It said the cost could fluctuate and may need to be adjusted "from time to time".

James Hogan, president of Etihad Airways, said: “As an airline we are strongly opposed to the unilateral measures imposed by the European Union on our flights into and out of Europe, especially as they include areas outside European airspace.

“We have invested many millions of dollars to ensure we operate a young and highly efficient fleet but are still being penalised.

“Our efficiency is reflected in the relatively low additional charge and we will continue to be transparent in keeping our customers fully informed of this carbon char