Prime Minister John Key has welcomed the decision of the European Union to suspend for a year its plans to impose a carbon emission tax on all airlines flying to and from EU member countries.

The EU reportedly decided to stall implementation of its emissions trading scheme over the airline industry in response to threats from the international airline community.

EU Climate Commissioner Connie Hedegaard told media that the freeze will allow for the development of an alternative global plan to tackle airline emissions, but made clear that if attempts at an alternative were unsuccessful, the EU will return to its plan of applying the tax after the passage of a year.

Airlines operating within the EU have had to pay for their carbon emissions since 2005, and will continue to do so.