The European Commission has proposed an amendment to the Emissions Trading Scheme (ETS) Directive in order to include aviation. The scheme will cover both EU and foreign-based airlines operating flights between EU airports, and will start in 2011. As of 2012 the EU ETS should also cover emissions from all international flights to or from an EU airport. Whereas national caps for industrial emissions are fixed in national allocation plans, the cap on aviation emission allowances for the next three trading periods, ie, until the end of 2022, will be set at EU level. The allocation of allowances among aircraft operators will also be decided at EU level on the basis of each airline’s share of overall passenger and cargo traffic on the ETS covered routes. Each airline will calculate its annual emissions on the basis of its fuel consumption multiplied by a standard emission factor. Failure to surrender sufficient allowances in a given year will result in a financial penalty of EUR 100 for every tonne of CO2 not covered, and could also result in suspension of the airline’s licence. The Commission expects that this amendment will produce a significant positive environmental impact and only a limited increase in prices for air transport services.