The EU law demanding all airlines participate in the EU's Emissions Trading Scheme ETS.L has prompted outcry and threats of a trade war.

But only eight Chinese and two Indian airlines have delivered on threats not to comply, while more than 1,200 airlines have met the EU's requirements.

"We have given them (India and China) until mid-June to report back their data," EU Climate Commissioner Connie Hedegaard told a news briefing.

She did not identify the Indian and Chinese airlines that failed to meet a March 31 deadline to report their emissions.

The Commission, the EU's executive arm, has the option of fining airlines that break its law, or even, as a last resort, banning repeat offenders from flying to Europe.

To reduce tension, the Commission has looked to the United Nations' International Civil Aviation Administration ICAO.L to come up with a global approach to curbing emissions from airlines.

The body is expected to meet next month to review progress.

"We are using a lot of time and energy in trying to ensure a global solution through ICAO," Hedegaard said. "Nobody would be happier than the EU if it could achieve (that)."

The Commission has said it only decided on its plan after more than a decade of talks at the ICAO failed to agree on a global scheme to combat rising carbon emissions. It has also said it would modify its law if ICAO can deliver a deal.

FINES FOR OFFENDERS

Penalties for breaking the EU law start at 100 euros per tonne of carbon airlines fail to pay for, while the cost of compliance is estimated at about 2 euros per passenger for a flight from Shanghai to Frankfurt.

Opponents of the law accuse the European Union of imposing an extra-territorial tax and say it sets a dangerous precedent.

More than 20 nations opposed to the scheme grouped together in a "coalition of the unwilling". They last met in Moscow in February, when they agreed possible retaliatory measures and said they would meet again in Saudi Arabia, although a date has not been confirmed.

"You cannot enforce laws outside your sovereign area. Its implications are huge," Indian Civil Aviation Minister Ajit Singh told Reuters last week.

"Now you are talking about aviation, tomorrow you will talk about shipping. ICAO is there, these things will have be done in a multilateral basis."

The EU's highest court, the EU Court of Justice, ruled in December last year that the law was valid and did not breach international treaties. It also agreed with the Commission that the ETS was a market-based mechanism, not a tax.

(Additional reporting by Anurag Kotoky in New Delhi; editing by Rex Merrifield)

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