Wed Dec 21, 2011 6:21am EST

* EU law to impose carbon cost on all airlines from Jan. 1st 2012
* Preliminary court opinion said EU law was valid
* Judges to issue final ruling
* U.S. Secretary of State Hillary Clinton wrote to EU

LUXEMBOURG/BRUSSELS, Dec 21 (Reuters) – Europe’s highest court gave unreserved backing on Wednesday to a hotly contested EU law charging airlines for carbon emissions on flights to and from Europe, a decision likely to escalate tensions with the United States and other trading partners.

All airlines flying to and from EU airports will have to buy permits under the European Union’s emissions trading scheme from Jan. 1, the European Court of Justice (ECJ) ruled.

“The directive including aviation activities in the EU’s emissions trading scheme is valid,” the court said in a statement.

“Application of the emissions trading scheme to aviation infringes neither the principles of customary international law at issue nor the open-skies agreement.”

Wednesday’s ruling was in line with expectations after a senior adviser to the court issued a preliminary opinion in October finding the EU legislation did not infringe the sovereignty of other states and was compatible with international agreements.

The case was initially brought to the London High Court of Justice by the Air Transport Association of America, American Airlines and United Continental, but the London court referred it to the ECJ in Luxembourg.

Critics of the EU rules have argued that under the 1997 Kyoto climate pact, countries agreed to address emissions from aviation jointly through the U.N.’s aviation body, the International Civil Aviation Organization (ICAO).

More than a decade on, talks in that forum have not yielded significant progress and the ECJ said the EU was within its rights to take unilateral action.

The EU already sets a cap on the level of emissions allowed from factories and power plants. Emitters exceeding their quotas must buy carbon permits, while those within their limits can sell any unused allowances.