Aviation in the EU ETS
The aviation sector has been part of the EU ETS since the beginning of 2012. The necessary legislation was adopted in 2008 through amendments to the Trade Directive. Included are all emissions from flights arriving or departing from any airport located in the European Union or EEA/EFTA countries (Norway, Iceland and Liechtenstein).
The EU decided in late 2012 to allow flights to and from non-EEA countries to be temporarily exempted so that the International Civil Aviation Organization (ICAO) would have time to establish a global agreement on limiting emissions.
The exception was called "Stop-the-clock" and was extended until 2016. In 2017, the exception was further extended. In 2016, ICAO reached an agreement on a market-based mechanism for limiting emissions from aviation. The mechanism could be implemented in 2020.
Each aircraft operator included is assigned to a Member State which then is responsible for decisions on free allocation and performance. An aircraft operator based in the EU is awarded to the Member State issuing the license while an aircraft operator based outside the EU is assigned to the Member State where the bulk of the emissions have been made. Aircraft operators may use both air traffic allowances and general allowances when submitted for completion.