The EU and the US have vowed to co-operate on reducing global aviation's contribution to climate change under a "green skies" partnership, but the deal is unlikely to hold off a dispute over a separate EU plan to make all airlines flying via Europe trade carbon permits.

The European Union and US will work together to cut aircraft pollution by pooling research funds and improving the compatibility of their respective air-traffic control systems, Transport Commissioner Jacques Barrot and US Federal Aviation Administration Director Marion Blakely announced on 18 June at the Paris Air Show.

The new 'Atlantic Interoperability Initiative to Reduce Emissions' (AIRE) will focus on managing transatlantic air traffic from take-off to landing. The two sides said that it will help speed up the application of new emissions-reduction technologies, such as the "reduced-engine system" that enables planes to save fuel, release fewer greenhouse gases and make less noise when they land.

The partnership will also involve industry, including aircraft manufacturers Airbus and Boeing, the operators Air France-KLM, SAS, Delta and FEDEX, as well as providers of aviation navigation services. Blakey estimates that it could reduce CO2 emissions by as much as one million tonnes annually. But Barrot insisted that the initiative is "only one part" of Europe's strategy to limit the environmental impact of aviation and that the Union will forge ahead with controversial plans to include the sector into its carbon emissions cap-and-trade system.

US officials have warned that extending this scheme to all flights entering and departing from the EU – as the Commission intends to do as of 2011 – would be illegal and have threatened legal action if the EU does extend the scheme to US-based airlines. Transatlantic co-operation efforts such as AIRE could thus rapidly be overshadowed by the looming legal battle.

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