LONDON (Dow Jones) – British lawmakers have retaliated against US threats and said US airlines should be grounded if planes do not comply with the European Union's rules on greenhouse gas emissions, according to a parliamentary report.

The report by the UK's Energy and Climate Change Select Committee says the U.K. government should play a "key role in ensuring airlines comply with new rules and it recommends that any country or operator that refuses to accept the EU's Emissions Trading Scheme rules should also face increased air passenger tax in the UK."

Committee Chairman Tim Yeo MP, said international airlines using UK and European airports must pay up for the carbon pollution they produce or "risk having their planes grounded."

He said the aviation sector is one of the fastest growing sources of climate-changing emissions, so the industry must accept responsibility and comply with the rules.

"The US needs to recognize that if it wants to do business in the world's largest single market it is going to have to get serious about tackling climate change," Yeo said.

Europe's efforts to bring the airline industry under the bloc's carbon market has risked escalating a diplomatic row. Late last year US Secretary of State Hillary Clinton wrote to her European Commission counterpart, Catherine Ashton, strongly urging the EU to halt or suspend its plans, or the US "will be compelled to take appropriate action."

That appeared to fall on deaf ears and Europe's top court later backed carbon plans, despite legal efforts by AMR Corp.'s (AMR) American Airlines, United Continental Holdings Inc (UAL) AND Airlines For America.

US airlines have said that they are complying but under protest.

Airlines for America said: "We strongly support the US government and dozens of others around the world which are increasing pressure on the EU to come back to the table to consider a global sectoral approach framework provisionally agreed to in 2010."

Other countries such as the China, India and Russia have also expressed opposition to their domestic airlines being included.