Since the advent of civil aviation, air transport has experienced almost continuous growth. However the growth of the industry brings with it an increase in emissions which impact on the environment. In particular, aviation has an impact on climate change through emissions of carbon dioxide (CO2), nitrogen oxides (NOx), water vapour and sulphate and soot particles at altitude. In September 2005, the European Commission adopted a Communication setting out its proposed approach for reducing the climate change impact of aviation. As well as recognising the importance of continuing existing policy measures, the Communication proposed the inclusion of the aviation sector in the EU Emissions Trading Scheme. This proposed approach has been endorsed by Member States in the Council and the Commission is now preparing a proposal for legislation. This article explains the legislative context in which the proposal to include aviation in the EU ETS will be made and some of the policy and legal issues facing Community legislators in designing the scheme.