China will not abide by the emissions trading scheme (ETS) of the European Union, which took effect on New Year's Day and requires polluting industries to pay specific amount of taxes.

Chinese airlines operating on the 27 countries covered by EU laws "will not cooperate with the European Union on the ETS," according to a statement issued on Thursday by the China Air Transport Association (CATA), which serves as China's airline umbrella group.

"The CATA, on behalf of Chinese airlines, is strongly against the EU's improper practice of unilaterally forcing international airlines into its ETS," the aviation industry association was quoted by Agence France Presse as saying.

EU nations adopted the ETS on 2005 as part of its efforts to slash pollutions attributed to industrial activities by manufacturing plants, energy installations and the aviation industry, which reportedly was responsible for up to three percent of global carbon emission.

Under the ETS, EU will charge international airlines operating within its sphere by up to 15 percent of the polluting rights that will be reserved to them, with provisions of possible hikes by up to 18 percent over the next decade, AFP said.

Basing on its calculations, China claimed that Chinese airlines are bound to shell out some $125 million per year that the ETS is being enforced, with the likelihood that the charges could jump by 400 percent by 2020.

Beijing, through statements carried by the China's state-media, called the new EU regulation as "infringes on national sovereignty, violates international aviation treaties and will lead to a trade war."

Also, the Chinese government did not discount the possibility that counter-measures will be unleashed in the months ahead, an indication of which is the reported scrapping of a contract between Hong Kong Airlines and Airbus worth some billions of Euros, AFP wrote.

The ETS has stipulated that airlines opting to skip out of the scheme face the possibility of losing their rights to operate on EU-member nations, media reports said.

Along with China, the United States legally challenged the ETS on EU's High Court but its petition ended on December with the court favouring the new environmental regulation.

In a statement, the alliance of American airlines has indicated that member companies will for now follow the ETS with reservations and specific plans for further legal options in the future.