Foreign flights to slip under the radar of EU emissions limits

* EU exempted foreign flights from scheme until 2017

* UN agency approved deal to curb aviation emissions in Oct

* EU proposes extending exemption until at least 2021

* UN deal enters into force in 2021

By Julia Fioretti

BRUSSELS, Feb 3 (Reuters) - International flights in and out of the European Union could be exempted from emissions limits for at least another four years to give the United Nations time to implement a global system to curb pollution from planes.

The EU proposed extending the exemption, which was set to end at the start of 2017, on Friday to avoid a repeat of tensions when it tried to include all flights in 2012.

The International Civil Aviation Organization (ICAO) clinched a deal on a global market-based measure for offsetting airline emissions in October, but it will not be mandatory until 2027, prompting criticism from environmental campaigners.

Airlines strongly backed the ICAO deal as they want to avoid a patchwork of national and regional schemes.

But it was seen as not being ambitious enough by the European Parliament, which along with member states, will have to approve the EU exemption proposal.

This foresees an indefinite extension of the so-called “stop the clock” provision exempting airlines from surrendering carbon allowances for flights into and out of the bloc.

It will be reviewed by the European Commission as details on the implementation of the UN scheme become clear and before it takes effect in 2021.

The fate of the emissions trading system (ETS) covering flights within Europe will also be assessed in the review, EU officials said, adding that all options were on the table, including dismantling it once the global system is in place to avoid double counting for flights within the bloc.

“The European Union is now focused on getting the global scheme up and running. We are serious about achieving carbon neutral growth for aviation worldwide, and we will provide technical support to make it happen,” Violeta Bulc, the EU’s transport commissioner, said.

The EU had ordered carriers to buy credits for foreign flights under its ETS in 2012 but backtracked when countries said it violated their sovereignty and China threatened to cancel plane orders from Airbus Group.

The ETS is much more stringent than the ICAO deal as emissions are capped at certain levels. The deal reached by ICAO allows carriers to increase emissions without limit as long as they offset them by purchasing carbon credits from designated environmental projects.

Aviation, which produces about 2 percent of carbon dioxide emissions, was excluded from the Paris accord to fight climate change, and environmental groups say the ICAO deal is not compatible with accord’s aim to limit temperature increases. (Editing by Alexander Smith)