"The alternative, which is a system whereby every state makes up its own policies, ... would lead to a patchwork approach which could only be detrimental to the future sustainable growth of aviation," Paul Steele, executive director of the Air Transport Action Group, told a news conference.
About 200 delegates from 44 countries met in Montreal on Monday ahead of three-day environmental discussions by International Civil Aviation Organization.
The UN agency will try this week to narrow down the options ahead of a general assembly in September.
Steele said the industry is counting on ICAO to make "realistic progress" towards market-based approaches to regulating emissions.
"We're not going to get there in one step," he told reporters.
"I don't think there's any reality in thinking that, at the end of the (fall) assembly, (that) this time there's going to be a eureka moment that suddenly everything is in place."
Instead, the industry wants movement that will ultimately be approved by ICAO's 192 member states in 2016, four years before implementation.
Three options being considered include:
— Requiring airlines to buy credits if they surpass baseline emissions after say 2020.
— Ensuring that each credit purchased has a markup, with extra money used to reduce emissions, support low-carbon fuels or help developing countries adapt.
— A full-scale emissions scheme like ones proposed in Europe, Australia and New Zealand.
Steele said the industry is open to all suggestions but prefers one that is simple to implement and the least costly.
"Introducing a simple offsetting scheme is probably the easiest to do, certainly the least complex and certainly one that could get started much faster than some of the other mechanisms that are currently out there," he said in favour of the first option.
Steele said he hopes progress made by ICAO will satisfy the European Union, which put its emissions scheme for aviation on hold following threats of trade wars from unhappy governments.
International flights were excluded from charges for carbon emissions for a year pending an international agreement.
Airlines operating within the EU must buy pollution permits, but the planned inclusion of foreign airlines flying into or out of the 27-country bloc drew criticism from the United States and China.
Steele said he believes there is political will to find a solution, but that Europe needs to be patient so a global solution is reached instead a loose framework that allows individual countries to set their own rules.
Earlier, the head of the association representing the world's largest airlines told the meeting that no industry has a long-term future if it is not sustainable.
"It is therefore no exaggeration to say that, for aviation, achieving our environment targets is a key element of our licence to grow," said Tony Tyler of the International Air Transport Association (IATA).
Airlines this year are expected to transport more than three billion passengers and deliver goods exceeding $6.4 trillion in value.
"The European Union's unilateral attempt to bring international aviation into its emissions trading scheme brought us to the edge of a trade war — highlighting how badly this could go wrong," Tyler said.
"And with the clock stopped since November we have a unique opportunity to make progress."
Global aviation accounts for around two per cent of global man-made carbon dioxide emissions. In 2009, the global aviation industry agreed to cap its net emissions from 2020 through "carbon-neutral growth" and halve its net CO2 emissions by 2050, based on 2005 levels.
In addition to technology and better air traffic control measures, aviation is looking to use biofuels.
BioFuelNet Canada announced Monday that Air Canada (TSX:AC.B) agreed to partner with Airbus to find the best Canadian biofuel for aviation.
The McGill University non-profit organization will conduct research on various raw materials, including municipal solid waste, agricultural and forestry waste and conversion processes available for biofuel production.
The goal is to determine which advanced biofuels are the most sustainable for aviation, it said in a news release.
"Aviation biofuels are one of the most promising ways to reduce the aviation industry's carbon footprint, making air travel more environmentally friendly," said Donald Smith, president of BioFuelNet and a McGill professor.
Air Canada has already operated two flights with biofuel, which substantially reduced its emissions.
"Encouraged by these results, we look forward to participating in this project to encourage the development of a source of alternative fuel in Canada," said Paul Whitty, director of fuel purchasing and supply of the world's 15th-largest airline.
Launched last year with a $25-million grant over five years, BioFuelNet brings together 74 leading researchers working on advanced biofuels in Canada, as well as industry partners and government.