Aviation fuel is untaxed, despite the growing evidence that it is undermining international efforts to reduce the damaging gases that cause global warming.
The European Commission report says that if the current rate of growth in air travel is continued, it will result in a 150 per cent increase in emissions from international flights from EU airports by 2012.
That will offset more than a quarter of the reductions required under the European Union's agreed Kyoto target.
On current trends, the Commission says that aviation emissions "will become a major contributor" of greenhouse gases.
But the EU and Britain, current holder of the EU's revolving presidency, have been accused by environmental lobbyists of ducking hard decisions over aviation fuel. Rather than tax the fuel, the European Commission is preparing to include it in the trading scheme for harmful emissions that cause global warming, and will be tabling legislation next year.
Tony Blair clearly hinted yesterday that he will give the go-ahead to a new generation of nuclear power stations, but stopped short at taxing aviation fuel. "You don't set out as Prime Minister or as a government to be deeply unpopular," he said when appearing before a group of senior MPs.
"On some of these issues to do with climate change - you can see it with some of the debate on nuclear power - there are difficult decisions that governments have got to take in the long-term interests of the country." He added: "None of us in politics deliberately courts unpopularity. In relation to climate change, there are real issues about energy security and supply that will mean decisions that are bound to be controversial."
Airlines have lobbied the Government to oppose any move to tax aviation fuel, warning that they will fly to countries where it is not taxed to refuel if an EU-wide tax is brought in. Ministers also fear a backlash by passengers if taxes lead to higher fares, particularly by low- cost airlines.
The Commission said a 70 per cent improvement in EU fuel efficiency had been "more than offset by the even higher growth in traffic, leading to an increase in the impact of aviation on the climate".
While the EU's total emissions of those greenhouse gases controlled under the Kyoto Protocols fell by 5.5 per cent between 1990 and 2003, those from international aviation increased by 73 per cent, corresponding to an annual growth of 4.3 per cent.
The Commission report says that commercial aircraft cruising at altitude emit carbon dioxide, the most important greenhouse gas, nitrogen oxides, which have a net warming effect because they produce ozone but reduce atmospheric concentrations of methane, and also water vapour, which produces condensation trails.
Under the UN framework convention on climate change, greenhouse gas emissions from international air traffic are accounted in a different way from other emissions, due to a lack of consensus about who should be responsible for them. As a consequence, only domestic emissions of carbon dioxide are included in national emission totals.
The Commission warns that this removes a key part of the political pressure to implement measures in other sectors. It says international aviation should be included in any climate change regime after 2012.
The Environment minister Elliot Morley said a working group had been set up and its findings will be fed into an ongoing review of the existing framework of the community's emission trading scheme, which is due to report by 30 June next year. "We are pressing for the development of an open emissions trading system for international aviation," Mr Morley added.
He said the UK was holding back the weapon of taxation, but was pressing for the inclusion of aviation in the emissions trading scheme as a priority for its presidency, which ends next month. The Government is pressing for improved working practices at airports to cut emissions; research for new technologies; and voluntary action by airlines to develop sustainability strategies.
He added: "We recognise that these measures may not provide a total solution. Therefore we continue to explore and discuss options for the use of other economic instruments."
The high cost of air travel
Environmental cost per passenger of a return flight from London to:
AMSTERDAM
Miles: 217
Fuel: 36kg
Greenhouse gases: 341kg CO2
The greenhouse gas emitted per passenger is equivalent to the weight of 179 Edam cheeses.
ATHENS
Miles: 1,485
Fuel: 250 kg
Greenhouse gases: 2,336kg CO2
After visiting, someone would have to go without heating, cooking, lighting and mechanised transport for 2 years and 9 months to make up for their impact on the environment.
DUBLIN
Miles: 288
Fuel: 48kg
Greenhouse gases: 891kg CO2
Travelling by car and ferry is 13 times more considerate to the ozone layer than flying.
OSLO
Miles: 714
Fuel: 120kg
Greenhouse gases: 1,122kg CO2
The amount of carbon emitted - equivalent to the weight of four reindeer - would be cut by 85 per cent through travelling by car.
NEW YORK
Miles: 3,455
Fuel: 414kg
Greenhouse gases: 3,863kg CO2
A visitor would have to take 700 two-hour bus tours of the Big Apple to emit the same amount of CO2.
SYDNEY
Miles: 10,557
Fuel: 1,196kg
Greenhouse gases: 11,149kg CO2
The carbon emitted per passenger is equivalent to a Mini driving around the earth 640 times, or the weight of four Indian elephants.
Figures on jet fuel and greenhouse gases based on 80% occupancy on jumbo jet DC-747. All greenhouse gases expressed as warming equivalent in CO2. Source: air travel calculator at www.chooseclimate.org and United Nations Environment Programme
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