Euro ISDN should use ETSI, it's literally in the name Euro Telecom Standard Institute. You're right about the IPO not being compatible with the BRI gateway, unless you upgrade the IPO or get a gateway that can handle ETSI you are out of luck here.
I'm pretty sure any IPO version above 8.1 can handle ETSI trunks, and you wouldn't have to convert your Licensing either. Talk to your Avaya RSP about upgrading if you want to go down that route.