The European Union's requirement that all airlines buy carbon allowances to offset flights that use EU airports has stirred threats of a trade war, with the potential to disrupt global air traffic.

The European Commission has said it is willing to engage in dialogue, but is only willing to modify its law if the U.N.'s International Civil Aviation Organization ICAO.L can come up with an effective global scheme to curb rising levels of aviation emissions.

Following media reports that Berlin had expressed doubts about the EU law in response to warnings of retaliation from nations including China and Russia, Germany said it fully backed the EU's aviation stance.

"The German position on the inclusion of aviation in emissions trading has not changed," spokeswoman Christiane Schwarte said in a joint statement for the German environment and economy ministries on Monday.

She added that Germany was complying with all the requirements of the EU law.

Immediately after the EU's law began to take effect at the start of this year, Germany's Lufthansa (LHAG.DE) was the first major operator to announce it would pass on the cost of the EU scheme to its passengers.

EU officials have repeatedly said the cost of offsetting carbon emissions under its Emissions Trading Scheme is minimal at only around 2 euros per passenger for a flight from Beijing to Frankfurt, for instance.

But objectors say the EU is infringing national sovereignty and more than 20 nations, grouped together in a "coalition of the unwilling" have held a series of meetings, most recently in Moscow last month.

The EU has said it acted because attempts at ICAO to come up with a way to tackle aviation emissions had stalled for more than a decade.

However, international tension has galvanised the U.N. body and it is expected at regular talks this month to discuss progress on an ICAO alternative.

(Reporting by Barbara Lewis; Editing by Tim Dobbyn)

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