China's civil aviation industry might have to pay 800 million yuan ($120 million) in carbon credits to the European Union (EU) in 2012 for carbon emissions, Economic Information Daily reported Friday, citing officials.

Beginning Jan 1, 2012, the EU will allocate the carbon emission quota to airline companies operating flights departing from or arriving in the EU. A company has to buy extra emission credits after surpassing the quota, the newspaper reported, citing an anonymous official in charge of energy saving and pollution reduction policies at the Civil Aviation Administration of China.

The EU announced the planned carbon emission credit quota system in 2009, and the carbon emission credit in EU carbon exchanges were priced from 10 euros to 30 euros ($13.6 to $40.8) a ton.

US companies still want to do business Related readings:  Expert recommends early start to China's carbon trading  Carbon emissions reduction likely to be binding  China's carbon intensity pledge serious: US group  China to upgrade exports by boosting low-carbon sector

To reduce carbon emissions, airline companies will have to use low-carbon fuels, while speeds can be slowed by modifying aircrafts or boosting operating efficiencies, said Al Bryant, vice-president of Boeing Research & Technology China. Bio-fuel is believed to be a major resource of low-carbon fuels.

Test flights showed that aviation bio-fuels can increase aircrafts' operating efficiencies and meet aviation technology and safety standards. The fuels are expected to be certified no later than 2011, said Giovanni Bisignani, director-general of the International Air Transport Association.

Boeing Co is evaluating the use of aviation bio-fuel in some countries and regions, and hopefully will win technology certification in 2011, Bryant said

European Aeronautic Defense and Space Co, the parent company of Airbus SAS, tested bio-fuel on July 1.