European Union

Litigation cases

  • ExxonMobil Production Deutschland GmbH v Bundesrepublik Deutschland

    Opened in 2016 Last development in June, 2019

    On March 10, 2016, ExxonMobil filed a challenge against Germany in the Verwaltungsgericht Berlin (Administrative Court, Berlin, Germany), concerning an application to the German Emissions Trading Authority (DEHSt) for the allocation of greenhouse gas emission allowances ("ghg allowances") free of charge to a Exxon-owned natural gas processing installation in Germany which, among other activities, engages in sulphur recovery that by the combustion of fuels generates electricity and heat and releases carbon dioxide (CO2) into the atmosphere. The Administrative Court referred the case to the European Union's Court of Justice for a preliminary ruling interpreting the laws which establish a greenhouse gas emission allowance trading system with the European Union to determine whether this facility was entitled to ghg allowances free of charge. On June 20, 2019, the Court of Justice ruled that part of Exxon's natural gas processing plant in Germany should be classified as an electricity generator. The Court of Justice interpreted Article 3(u) and Article 10a of, and Annex I to, Directive 2003/87/EC of the European Parliament and of the Council (which established a scheme for greenhouse gas emission allowance trading within the EU) and as amended by Directive 2009/29/EC ("Directive 2003/87"). It additionally interpreted Article 3(c) and (h) of Commission Decision 2011/278/EU concerning rules for the temporary free allocation of emission allowances pursuant to Article 10a of Directive 2003/87. The court concluded that Article 3(u) of Directive 2003/87/EC must be interpreted to mean that an installation, such as that at issue in the proceedings, (which produces electricity through the "combustion of fuels in installations with a total rated thermal input exceeding 20 [megawatts (MW)]"), must be understood as an ‘electricity generator' when even a small portion of that electricity is continuously fed into the public electricity network (unless the product of the installation meets an exempted category in the annex). The installation in question could not be exempted even if its purpose was to produce electricity for the natural gas processing facility. The Court of Justice further determined that Article 3(c) of Commission Decision 2011/278/EU must be interpreted to mean that an installation such as that at issue in the main proceedings is not entitled to be allocated free emission allowances for the heat produced "where that heat is used for purposes other than the production of electricity, since such an installation does not fulfill the conditions laid down in Article 10a(4) and (8) of the directive." The activities of natural gas desulphurisation and sulphur recovery did not meet the criteria of those articles. An analyst reviewing the decision noted that if it is followed by EU governments, it could result in thousands of facilities no longer qualifying for free allocation of ghg emission permits and drive up the cost of carbon in the market.
  • Sandra Bitter v. Bundesrepublik Deutschland (European Court of Justice, 2015)

    Opened in 2015 Last development in November, 2015

    Sandra Bitter, insolvency administrator for the German company Ziegelwerk Höxter GmbH, filed a for a preliminary ruling on whether a fine of EUR 100 per tonne of carbon dioxide emitted imposed by German authorities on non-surrendered emissions prior to the company's insolvency violated the principle of proportionality under Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC. Bitter argued that, because Ziegelwerk Höxter had ceased its business activity before the opening of insolvency procedures in September 2011, it was no longer obliged to report or surrender its emissions allowances for 2011. Instead, she claimed that Ziegelwerk Höxter's contingent liabilities were solely to be registered as claims in the insolvency procedure. The Court held that the EU legislature must be allowed broad discretion in applying penalties and that the relatively high level of the penalty is justified by the need to have infringements of the obligation to surrender a sufficient number of allowances treated in a stringent and consistent manner throughout the European Union. The Court also noted that Directive 2003/87 grants operators a reasonable amount of time to comply with their surrender obligations and that the fact that the amount of the fine involved exceeded that of one in a previous case, in which the Court ruled that fines for penalties to surrender are consistent with the principle of proportionality, was irrelevant. In light of the principle of proportionality, the Court ruled, there is nothing in this case that affects the second sentence of Article 16(3) of Directive 2003/87, which does provide for a penalty of EUR 100 per tonne of carbon dioxide equivalent emitted for which the operator has not surrendered allowances.
  • Borealis AB, Kubikenborg Aluminum AB, Yara AB, SSAB EMEA AB, Lulekraft AB, Vórmevórden i Nynóshamn AB, Cementa AB, Höganós Sweden AB v. NaturvÃ¥rdsverket

    Opened in 2015 Last development in September, 2016

    Eight companies operating greenhouse gas emitting installations challenged the final emissions allocations decided by the Swedish Environmental Protection Agency during Phase III of the EU Emissions Trading Scheme (EU ETS) after the correction factor calculation had been applied. The operators argued that they were entitled to additional allowances because their installations consume heat from wasted greenhouse gases emitted at sub-installations. They argued that these additional allowances followed from a correct legal interpretation of Directive 2003/87/EC, Commission Decision 2013/448/EU, and Commission Decision 2011/278/EU. Previously, in Case C-191/14, the European Court of Justice (ECJ) ruled that the European Commission's correction factor calculation was invalid because it ignored relevant information, including information about what emissions fell under the purview of free allocation. The Court remanded the correction factor calculation to the European Commission, which it gave 10 months to correct. The ECJ held that the ruling in Case C-191/14 applied to the facts of this case, and therefore that the operators are not entitled to additional allowances. It also reaffirmed its previous ruling that the European Commission has a period of 10 months from the decision in Case C-191/14 to correct the correction factor calculation, but also that any measures adopted by the European Commission during that period on the basis of the provisions invalidated by Case C-191/14 cannot be called into question. Lastly, it ruled that Commission Decision 2011/278/EU remains valid and must be interpreted in such a way as to prevent double-allocation of emissions allowances. The Court returned the case to the Swedish court for final ruling.
  • Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ NV v. Bestuur van de Nederlandse Emissieautoriteit

    Opened in 2015 Last development in June, 2016

    The European Court of Justice (EJC) held that a coal-fired power plant and unburned coal in a storage site constitute one installation covered by the EU Emissions Trading Scheme (EU ETS). The EJC further concluded that the coal lost due to self-heating while in storage could not be regarded as exported fuel for purposes of monitoring emissions. 

    Elektriciteits Produktiemaatschappij Zuid-Nederland EPZ NV (EPZ) operates a coal-fired power plant in the Netherlands and holds a quantity of its unburned coal in a storage site approximately 800 meters from the power plant, which is separated from it by a public road. When designing the monitoring plan for the installation operated by EPZ for the third period of the EU ETS, the Dutch Emissions Authority (Nea) determined that coal lost due to its self-heating during the storage period could not be regarded as fuel exported from EPZ’s installation within the meaning of Article 27(2) of Regulation No 601/2012.

    Consequently, the NEa refused to approve modifications of the monitoring plan sought by EPZ and later rejected EPZ’s objection to their initial decision. EPZ then lodged an appeal with the Dutch Raad van State (Council of State), seeking to have the latter decision annulled. The Council of State referred the case to the EJC and asked for a preliminary ruling on two questions.

    (1) Could EPZ’s storage facility be considered an “installation” as referred to in Article 3(e) of Directive 2003/87/EC, which established the EU ETS? 

    (2) Could EPZ’s lost coal due to its self-heating during storage be considered “fuel exported from the installation” as referred to in Article 27(2) of Regulation (EU) No 601/2012? That provision allows operators to deduct the quantity of fuel exported from the installation for purposes of monitoring greenhouse gas emissions. 

    On the first question, the ECJ ruled that a fuel storage site of a coal-fired power plant is part of an “installation” within the meaning of Article 3(e) of Directive 2003/87/EC. The ECJ reasoned that the coal’s self-heating during storage does not amount to combustion and that it was not apparent that the coal’s self-heating required 20 MW of thermal input - two of the requirements for the storage site to be considered an installation under Annex I of Directive 2003/87/EC. However, the ECJ ruled that the coal is essential to the functioning of the power plant and is therefore directly associated with the plant’s activity. Moreover, because the coal’s self-heating emits greenhouse gases, storing coal is an activity that could have an effect on emissions and pollution within the meaning of Article 3(e) of Directive 2003/87/EC. The ECJ deemed it irrelevant that the storage site is located approximately 800 meters and across a public road from the power plant.

    On the second question, the ECJ ruled that coal lost due to self-heating while in storage on a site that is part of an installation cannot be regarded as coal exported from that installation. Because the storage site is part of an installation within the meaning of Article 3(e) of Directive 2003/87/EC, it cannot be regarded as a separate installation. Therefore, coal lost due to self-heating cannot be considered to be exported from the installation in question.
  • ArcelorMittal Rodange et Schifflange SA v. State of the Grand Duchy of Luxembourg

    Opened in 2015 Last development in March, 2017

    ArcelorMittal Rodange et Schifflange SA (ArcelorMittal) operated an installation in Schifflange, Luxembourg until the end of 2011, which was subject to the EU emissions trading scheme (ETS). Luxembourg's Minister of the Environment allocated ArcelorMittal a total quantity of 405,365 emissions allowances for the period between 2008 to 2012. On 23 April 2012, ArcelorMittal requested that the Minister of the Environment cease environmental monitoring because the activities of its Schifflange installation had been suspended for an indefinite period since the end of 2011. On 6 June 2013, the Minister of Sustainable Development and Infrastructure (1) reduced the total emissions allowances allocated to ArcelorMittal between 2008 to 2012 and (2) requested that ArcelorMittal surrender 80,922 emissions allowances without compensation based on Article 13(6) of a Luxembourgish law transposing Directive 2003/87/EC.

    The question before the European Court of Justice (ECJ) in this case was whether Article 13(6) of the 2004 law, which allows the relevant Luxembourgish minister to order the surrender, without full or partial compensation, of allowances issued but not used, is compatible with Directive 2003/87/EC, or whether Directive 2003/87/EC must be interpreted as precluding national laws that allow the competent authorities to require the surrender without compensation of emissions allowances that have been issued but not used.

    The ECJ held that Directive 2003/87 must be interpreted as not precluding national legislation that allows competent national authorities to require the surrender, without full or partial compensation, of unused allowances that have been improperly issued to an operator, as a result of the failure by the latter to comply with the obligation to inform the competent authority in due time of the cessation of the operation of an installation. It also held that the allowances issued after an operator has ceased the activities performed in the installation to which those allowances relate, without informing the competent authority beforehand, cannot be classified as emissions "allowances" within the meaning of Article 3(a) of Directive 2003/87.
  • PPC Power a.s. v. Finan?né riadite?stvo Slovenskej republiky and Da?ovó úrad pre vybrané da?ové subjekty (European Court of Justice, 2018)

    Opened in 2017 Last development in April, 2018

    PPC Power operates an installation in Slovakia that is subject to the European Union Emissions Trading System (EU ETS). In addition to EU ETS requirements, the government of Slovakia imposed an 80% tax on emissions allowances that were transferred or unused, and therefore allocated free of charge. This tax was applied between 1 January 2011 and 30 June 2012.

    PPC Power requested that the Da?ovó úrad pre vybrané da?ové subjekty (Tax Administration for Certain Taxpayers, Slovakia; "the DU"), set the amount of the advance of tax payable for 2011 at zero because the legislation establishing the 80% tax rate was incongruous with EU Directive 2003/87/EC. The DU rejected PPC Power's request and set its advance payment amount for the first half of 2011 to €300,000. PPC Power applied for repayment of that amount and, when that decision was ultimately rejected by the Finan?né riadite?stvo Slovenskej republiky (Directorate of Tax Administration of the Slovak Republic), PPC Power filed suit with the Regional Court of Bratislava, which referred the case to the European Court of Justice (ECJ).

    The ECJ ruled that Directive 2003/87/EC "must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which taxes, at 80% of their value, greenhouse gas emission allowances allocated free of charge which have been sold or not used by the undertakings subject to the greenhouse gas emission trading scheme." The ECJ acknowledged that Directive 2003/87/EC requires member states to allocate at least 90% of emissions allowances free of charge but still allows member states to determine procedures for allocating them. However, the ECJ found that, the Slovakian tax eliminated "virtually all of the economic value of emission allowances," and therefore negated the incentive mechanisms underpinning the EU ETS. To reduce emissions in the manner prescribed by the EU ETS, the ECJ ruled, Directive 2003/87/EC must be interpreted as precluding national legislation such as Slovakia's at issue in the proceedings.
  • Schaefer Kalk GmbH & Co. KG v. Bundesrepublik Deutschland

    Opened in 2013 Last development in January, 2017

    Schaefer Kalk GmbH & Co. KG (Schaefer Kalk) operates an installation for the calcination of lime in Hahnstótten, Germany, which is subject to the European Union Emissions Trading Scheme (ETS). In the process of getting its monitoring plan approved, Schaefer Kalk applied for authorisation to subtract the CO2 transferred for the production of precipitated calcium carbonate (PCC) to an installation not subject to the ETS from the amount of greenhouse gas emissions in the company's emissions report. Schaefer Kalk argued that the transferred CO2 is chemically bound in the PCC and that, not being emitted into the atmosphere, it cannot be regarded as "emissions" as defined in Article 3(b) of Directive 2003/87/EC. The German Emissions Trading Authority at the Federal Environment Agency (DEHSt) approved the monitoring plan without addressing the issue of subtracting transferred CO2. Schaefer Kalk brought a complaint to the DEHSt, which was rejected. The DEHSt argued that subtraction was not legal under Article 49 of Regulation (EU) No 601/2012 and Annex IV thereto, which only provides that CO2 transferred to one of the long-term geological storage installations listed in that article may be subtracted from the emissions. Schaefer Kalk subsequently brought the matter before the Berlin Administrative Court and argued that Article 49(1) of Regulation No 601/2012 and point 10(B) of Annex IV thereto subject CO2 bound in PCC and transferred for the production of that substance to mandatory participation in the ETS, and are therefore not covered by the powers granted under Article 14(1) of Directive 2003/87/EC. The Berlin Administrative Court then referred the matter to the European Court of Justice (ECJ). The ECJ held that the second sentence of Article 49(1) of Regulation No 601/2012 and point 10(B) of Annex IV to that regulation are invalid in so far as they systematically include the CO2 transferred to another installation for the production of PCC in the emissions of the lime combustion installation, regardless of whether or not that CO2 is released into the atmosphere.
  • Trinseo Deutschland Anlagengesellschaft mbH v. Bundesrepublik Deutschland

    Opened in 2015

    Trinseo operates an installation for the production of polycarbonate that obtains the steam needed for that production from a plant which is operated, on the same site, by another company, Dow Deutschland Anlagengesellschaft, which is subject to the emission allowance trading scheme established by Directive 2003/87/EC. Trinseo applied for free allocation of emission allowances to its installation for the trading period 2013?2020, which the German government denied because polycarbonates do not fall under the list of products approved for free allocation. Trinseo originally claimed that it was entitled to free allocation of emissions allowances because the steam it uses during the production of polymers requires the emission of greenhouse gases. The German government rejected this application and, subsequently, Trinseo sued the German government in the Berlin Administrative Court, which referred the case to the ECJ for preliminary ruling. The ECJ considered "whether Article 2(1) of Directive 2003/87 must be interpreted as meaning that an installation for the production of polymers, in particular the polymer polycarbonate, such as the installation at issue in the main proceedings, which obtains the heat needed for that production from a third-party installation, falls within the activity of ‘[p]roduction of bulk organic chemicals by cracking, reforming, partial or full oxidation or by similar processes', within the meaning of Annex I to that directive, so that it must be considered to fall within the scope of the emissions allowance trading scheme established by that directive." The ECJ ruled that, because Directive 2003/87/EC is intended to incentivise emissions reductions in companies, and because polycarbonate production does not directly produce emissions, Trinseo was not entitled to free allocation of emissions trading allowances. Rather, only the company that directly emits greenhouse gases as the result of producing steam, which might later be used to manufacture polymers, is entitled to free emissions allocations.
  • EnBW Energie Baden-Wórttemberg AG v. Commission of the European Communities (Court of First Instance, Third Chamber, 2007)

    Opened in 2007

    European Court decision on the implementation of Directive 2003/87/EC establishing the greenhouse gas allowance trading scheme. EnBW (major German energy producer) requested the annulment of the Commission decision of 7 July 2004 on the German National Allocation Plan (NAP). EnBW Energie Baden-Wórttemberg AG disagreed with the allocation methods for power stations decommissioning nuclear energy installations and considered the generous transfer rule illegal state aid. It claimed that the Commission had failed to initiate state aid procedures under EC law, thereby breaching Article 88 (2) of the Treaty. In its order of 30 April 2007, the Court decided that the request was inadmissible for lack of interest in bringing the proceedings.
  • Cemex Polska sp. z o.o. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • EU Biomass Plaintiffs v. European Union

    Opened in 2019

    On March 4th, 2019, plaintiffs from six countries filed suit against the European Union in the European General Court in Luxembourg to challenge the treatment of forest biomass as a renewable fuel in the European Union's 2018 revised Renewable Energy Directive (known as RED II). RED II requires EU Member States to achieve an EU-wide target of 32% energy consumption from renewable sources by 2030. The legal documents are not yet available for the case, but in a press release, plaintiffs allege that RED II will accelerate widespread forest devastation and significantly increase greenhouse gas emissions by not counting CO2 emissions from burning wood fuels. Plaintiffs describe the lawsuit as documenting the environmental, societal, and public health impacts associated with the increased logging, wood pellet manufacturing, and production of biomass energy driven by the RED II forest biomass policy. They allege that the policy is incompatible with the environmental objectives of the Treaty on the Functioning of the European Union and violates the EU Charter on Fundamental Rights (Art. 32 and 57).The plaintiffs are a group of individuals and non-governmental organizations (NGOs) from Estonia, Ireland, France, Romania, Slovakia, and the United States. Further details to be provided upon review of the case documents.
  • Buzzi Unicem SpA v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicant Italian cement producer sought to annual a Commission decision rejecting in part the Italian Phase II national allocation plan (NAP). The court dismissed the action as inadmissible because the Applicant was unable to demonstrate that it was directly and individually affected.
  • Société Arcelor Atlantique et Lorraine & Others v. Parliament & Council (Environment & consumers)

    Opened in 2004 Last development in March, 2010

    This case concerns an application for partial annulment of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC, on the one hand, and application for compensation for the damage suffered by the applicant following the adoption of that directive, on the other. Following the entry into force of the Treaty of Lisbon on 1 December 2009, the Court decided to reopen the oral procedure and called on the parties to set out their views on the possible consequences to be drawn from that fact and, in particular, from the entry into force of the fourth paragraph of Article 263 TFEU in the context of the present proceedings. In the context of an action for damages seeking compensation for the damage allegedly suffered by the applicant in consequence of the adoption of that directive, the Court held that the Community legislature enjoys broad discretion when exercising its powers in the field of environmental issues under Article 174 EC and Article 175 EC. The exercise of that discretionary power implies the need for the Community legislature to anticipate and evaluate ecological, scientific, technical and economic changes of a complex and uncertain nature and the weighing up and arbitration by that legislature of the various objectives, principles and interests set out in Article 174 EC. That is reflected in Directive 2003/87/EC in the establishment of a series of objectives and sub-objectives which are in part contradictory. When the Community legislature is called on to restructure or establish a complex scheme, such as the allowance trading scheme, it is entitled to have recourse to a step-by-step approach and to carry out only a progressive harmonisation of the national legislation at issue. The Court stressed that, by virtue of the principle of subsidiarity, European Union legislation in the sphere of environmental protection does not seek to effect complete harmonisation, the Member States being free to adopt more stringent protective measures, subject only to the conditions that those be compatible with the EC Treaty and be notified to the Commission. The mere fact that the Community legislature left open a particular question falling within the scope of Directive 2003/87/EC and of a fundamental freedom does not in itself justify that omission's being classified as contrary to the rules of the Treaty. In addition, the implementation of Directive 2003/87/EC being subject to review by the national courts, it is incumbent upon those courts, if they should encounter difficulties relating to the interpretation or validity of that directive, to refer a question to the Court of Justice for a preliminary ruling. Last, the applicant claimed that Directive 2003/87/EC infringes the principle of legal certainty, because there is no provision governing the extent of the financial consequences which may result from both a possible insufficiency of allowances allocated to an installation and the price of those allowances, that price being determined exclusively by the market forces which came into being following the establishment of the allowance trading scheme. The Court found that regulation of the prices of allowances might thwart the main objective of Directive 2003/87/EC, which is to reduce greenhouse gas emissions through an efficient allowance trading scheme in which the cost of emissions and investments made to reduce such emissions is essentially determined by market forces. In the event of an insufficiency of allowances, the incentive for operators to reduce, or not to reduce, their greenhouse gas emissions will depend on a complex economic decision taken in the light of the price of emission allowances available on the exchange market and of the costs of possible measures to reduce emissions which may aim either to reduce production or to invest in more efficient methods of production in terms of energy output. In such a scheme, the increase in the cost of emissions cannot be regulated in advance by the legislature without reducing, or even completely removing, the economic incentives which constitute its very basis and thereby adversely affecting the effectiveness of the allowance trading scheme. The fact that it is not possible to predict how the exchange market will develop constitutes an element inherent in and inseparable from the economic mechanism characterising the allowance trading scheme subject to the classic rules of supply and demand and cannot be contrary to the principle of legal certainty.
  • United Kingdom of Great Britain and Northern Ireland v. Commission of the European Communities

    Opened in 2004 Last development in November, 2005

    Article 1 of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community ('the Directive') provided This Directive establishes a scheme for greenhouse gas emission allowance trading within the Community in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.'Article 9(1) of the Directive provided that each Member State was to develop a national plan stating the total quantity of allowances that it intended to allocate for each period referred to in the Directive and notify it to the Commission.On 30 April 2004, the United Kingdom notified a national allocation plan for the allocation of greenhouse gas emission allowances (hereinafter ‘NAP') to the Commission, expressly stating it was provisional. On 7 July 2004, the Commission adopted Decision C(2004) 2515/4 final concerning the national allocation plan for the allocation of greenhouse gas emission allowances notified by the United Kingdom. Subsequently, the United Kingdom notified the Commission that it wished to amend its NAP. The United Kingdom proposed, in particular, to increase the total quantity of allowances to 756.1 million tonnes of carbon dioxide. However, the Commission indicated that it considered that the proposed amendments were inadmissible. The United Kingdom applied to the Court of First Instance requesting the infringement of the Directive and of the Decision of 7 July 2004. It stated that the NAP in question was expressly provisional and that this had been acknowledged by the Commission. The Commission contested that it had been of the view that the NAP, including the figures relating to the total quantity of allowances, had been complete. The Commission added that any amendment exceeding the total quantity of allowances was expressly excluded as Commission decisions on NAPs had to provide certainty, both for the coherence of the emissions trading system overall and in order for the allowance market to function properly, as market price building depended strongly on the utmost stability of the total quantity of allowances. Otherwise, the risk of having a series of consultations and new Commission decisions would arise. The market for allowances, being reliant on the stability of the total quantity of allowances, would be undermined and unable to function properly with such a degree of uncertainty. The court noted that in the contested decision, the Commission rejected as inadmissible the amendments of the NAP proposed by the United Kingdom because they would have resulted in the total quantity of allocated quotas exceeding the quantity authorized by the Commission in its Decision of 7 July 2004. Therefore, the Commission did not consider itself obliged to carry out any examination of the proposed amendments on their merits. In order to decide whether the Commission was entitled to reject those amendments as inadmissible, the court examined the roles and powers allocated to the Commission and the Member States respectively under the Directive, particularly those in Articles 9, 10 and 11. It concluded that the amendments of the NAP were not limited in the way expressed by the Commission. This followed necessarily from the fact that the Member State was obliged, in accordance with Article 11(1) of and paragraph 9 of Annex III to the Directive, to take account of comments received from the public after the initial notification of the NAP and before the adoption of the definitive decision under Article 11(1) of the Directive. If amendments to the NAPs, made after the expiry of the three-month period mentioned in Article 9(3) of the Directive or after a decision of the Commission, were limited in the way described by the Commission, then that public consultation would be deprived of its effectiveness and the comments of the public would be rendered purely academic. It also had to be pointed out that the purpose of the Directive was to establish an efficient European market in greenhouse gas emission allowances, with the least possible diminution of economic development and employment. Therefore, even though the Directive aimed to reduce greenhouse gas emissions in accordance with the commitments under the Kyoto Protocol, that aim had to be achieved, in so far as possible, while respecting the needs of the European economy. It followed that the NAPs developed under the Directive had to take due account of accurate data relating to emission forecasts for the installations covered by the Directive. If a NAP was based in part on incorrect information relating to the level of emissions in certain sectors, the Member State in question would have to be entitled to propose amendments to the NAP, including increases to the total quantity of allowances to be allocated, in order to address those problems before the market began functioning. The Court therefore considered that it followed both from the wording of the Directive, and from the general structure and objectives of the system which it establishes, that the Commission could not restrict a Member State's right to propose amendments. The Commission also maintained that any amendment increasing the total quantity of allowances had to be excluded because it could have an adverse effect on the stability of the market. The Court considered that this argument has not been substantiated by the Commission. The argument of the Commission that the proposed amendments would have serious repercussions on scarcity and would therefore be likely to have a significant impact on the market price was exaggerated. The United Kingdom proposed to increase the total quantity of allowances from 736 to 756.1 Mt CO2, which was an increase of 2.7%. In light of the fact that this amendment had simultaneously been published by the United Kingdom with a view to obtaining comments of the public, the operators concerned would have been aware of that increase seven weeks before the opening of the market. The argument of the Commission, based on the idea that the stability of the market amounted to an imperative rule, was exaggerated, especially with regard to amendments proposed before the opening of the market and thus it could not be accepted. The court held that the Commission made an error of law in rejecting the amendments proposed by the United Kingdom as inadmissible. Therefore, the single plea raised by the United Kingdom was declared to be well founded and the contested decision was annulled.
  • Industrie de bois de Vielsalm & Cie v. Region Wallone, European Court of Justice C-195/12

    Last development in September, 2013

    European Union adopted Directive 2004/8/EC to promote high-efficiency cogeneration and reduce greenhouse gas emissions. Under the Directive, Member States are to adopt certain support mechanisms to encourage cogeneration. In implementing the Directive, Walloon decided to exclude biomass from wood, because of the potentially negative environmental consequences. Industrie de bois de Vielsalm (IBV), which operates a cogeneration plant from sawmill waste, applied to the Walloon Government for green certificates under the support mechanism and was rejected. IBV challenged the refusal arguing that the exclusion of biomass from wood (1) was inconsistent with the Directive and (2) violated the EU Charter of Fundamental Rights. The Constitutional Court of Belgium referred these issues to the EU Court of Justice. The Court of Justice found Walloon's interpretation of biomass was permissible under the Directive given its purpose. Furthermore, the Court found that while Member States were subject to the equal treatment and non-discrimination clauses of EU's Charter of Fundamental Rights in implementing the cogeneration support mechanism, the Walloon Government did not defy those clauses when it excluded wood and wood waste from its biomass support scheme.
  • Société Arcelor Atlantique et Lorraine v. Premier Minister (European Court of Justice, Grand Chamber, 2008)

    Opened in 2007 Last development in December, 2008

    The European Court of Justice upheld provisions of Directive 2003/87 implemented by French legislation, which applied the greenhouse gas trading scheme to installations in the steel sector. Arcelor, a worldwide steel enterprise, challenged the directive under the principle of equality. Arcelor argued that non-ferrous metals and plastics are both industries emitting greenhouse gases, yet they are not regulated by the Directive. The Court found the differences in treatment between the steel industry and the chemical and non-ferrous metal industries to be justified based on substantial differences among the industries, such as the number of installations and the levels of direct emissions.
  • Republic of Poland v. Commission of the European Communities (Court of First Instance, Second Chamber, 2009)

    Opened in 2007 Last development in September, 2009

    In 2006, the Republic of Poland notified the Commission of its NAP for the period from 2008 to 2012. In 2007, the Commission held that its NAP was incompatible with the criteria set forth in Directive 2003/87 and decided that the total annual quantities of emission allowances should be reduced to 26.7% less than that proposed. Poland appealed the Commission's decision. As a preliminary issue, the Court held that each member state is to decide, on the basis of its NAP, on the total quantity of allowances it will allocate for a period in question, and the Commission's power to review these NAPs is very restricted. In the present case, the Commission's rejection of Poland's plan based on doubts as to the reliability of the data used exceeded the commission's authority and violated the principle of equal treatment.
  • Republic of Estonia v. Commission of the European Communities (Court of First Instance, Seventh Chamber, 2009)

    Opened in 2007 Last development in September, 2009

    In 2006, the Republic of Estonia notified the Commission of its NAP for the period from 2008 to 2012. In 2007, the Commission held that its NAP was incompatible with the criteria set forth in Directive 2003/87 and decided that the total annual quantities of emission allowances should be reduced to 47.8% less than that proposed. Estonia appealed the Commission's decision. As a preliminary issue, the Court held that each member state is to decide, on the basis of its NAP, on the total quantity of allowances it will allocate for a period in question, and the Commission's power to review these NAPs is very restricted. The Court held that the Commission did not properly examine the NAP and infringed on the principle of sound administration.
  • Re Greenhouse Gas Emission Allowance: United Kingdom v. Commission of the European Communities (Court of First Instance of the European Communities, First Chamber, 2005)

    Opened in 2005 Last development in November, 2005

    European Court reversed a Commission of the European Communities decision barring the UK from amending its national allocation plan (NAP) under Article 9 of Directive 2003/87, which established a scheme for greenhouse gas (GHG) emission allowance trading within the European Community. A Member State is entitled to propose amendments to its NAP after it has been notified to the Commission, and until its adoption of its decision under Article 11(1), even if the amendments increase the total quantities of GHG emissions. The court found that the Commission made an error of law in rejecting the amendments proposed by the UK as inadmissible.
  • Fels-Werke GmbH v. Commission of the European Communities (Court of First Instance, 2007)

    Opened in 2007 Last development in September, 2007

    Applicants sought to annul Commission decision rejecting part of the German Phase II national allocation plan (NAP). The court dismissed the action as inadmissible because the Applicants were not individually affected. The decision as appeal to the European Court of Justice in Case C-503/07, Saint-Gobain Glass Deutschland v. Commission of the European Communities (European Court of Justice, 2008). The Court affirmed the lower court's decision and dismissed the appeal, ruling that the Appellant could not sufficiently demonstrate that it was individually affected by the contested decision.
  • Republic of Poland v. European Commission (European Court of Justice, March 7, 2013)

    Opened in 2011 Last development in March, 2013

    Challenge brought by Poland against Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community. In support of the action, the Republic of Poland raised four pleas. The first alleged an infringement of the TFEU on the ground that the Commission did not take into account the specificity of each Member State in respect of fuel. The second plea concerned an alleged breach of the principle of equal treatment on the ground that the Commission did not take into account the difference in situation between the regions of the European Union. The third plea alleged a breach of the principle of proportionality. The fourth plea alleged that the Commission was not competent to adopt the contested decision. The General Court rejected all four grounds and the action was therefore dismissed. In particular, the General Court held that "the determination by the Commission of the heat and fuel benchmarks by using the reference performance of natural gas may be regarded as objectively justified" (para. 58).
  • Opinion of Advocate General Sharpston (European Court of Justice, 2014)

    Opened in 2012 Last development in May, 2014

    Advocate General Sharpston was asked for guidance as to the meaning of the term ‘dual use' in the second indent of Article 2(4)(b) in relation to sugar production and lime fertilizer, the by-product arising from that process, of the Directive 2003/96/EC, which introduced a regime imposing minimum harmonized levels of taxation on all energy products and electricity. The referring court also asked whether national legislators are constrained by an EU concept of what constitutes dual use if they choose to introduce domestic measures in order to tax such energy products. The Advocate General answered that ‘dual use' within the meaning of Article 2(4)(b) refers to where coal is used as heating fuel in a lime-kiln in order to generate carbon dioxide for the production of lime-kiln gas, which is subsequently used for the purification of the raw juice obtained from sugar beets, that process giving rise to the by-product earth foam. The Advocate General found that Member States may apply a more restrictive definition of dual use and choose to tax dual use energy products, provided they exercise their competence consistently with EU law. If a Member State chooses to apply such a narrower definition, a taxpayer cannot invoke a broader EU concept of dual use in order to obtain exoneration from a charge to tax imposed under national law.
  • Lafarge Cement S.A. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2007 Last development in November, 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Iberdrola S.A. et al.,Judgement of the Court of 17 of Oct. 2013 (Case C-566/11, 2013)

    Opened in 2009 Last development in October, 2013

    Spain amended its system for purchasing wholesale electricity by reducing the remuneration of electricity production to remove unfair windfalls for electricity producers caused by issuance of allowances for free under the EU Emissions Trading System (ETS). Electricity producers challenged the measure asserting that it was contrary to Directive 2003/87/EZ (establishing EU ETS) because it effectively made emissions allowances costly. The European Court of Justice rejected the electricity producers arguments, finding instead that the Directive does not preclude remuneration for electricity producers for the purpose of counterbalancing windfall profits resulting from the allocation of emission allowances. In addition, the court found that the legislative measure does not remove the incentive to reduce greenhouse gas emissions and was thus not inconsistent with the goals of the Directive.
  • Flachglas Torgau GmbH v. Federal Republic of Germany (European Court of Justice 2 CMLR 17)

    Opened in 2009 Last development in February, 2012

    Flachglas Torgau requested information about Germany's allocation of emissions licenses during 2005-2007. The requested information was contained in internal documents produced by the Ministry for the Environment concerning legislation process for GHG emissions trading. The Ministry refused this request, citing the confidentiality of proceedings of public authorities. The 2003 Directive concerning public access to information provides that environmental information is generally considered public; however, the court upheld the Ministry's decision to deny access to the documents requested.
  • Grupa Ożarów S.A. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2007 Last development in September, 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Gόrażdże Cement S.A. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2007 Last development in September, 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • European Commission v. Republic of Latvia (European Union Court of Justice, 2013)

    Opened in 2013

    Latvia brought an action for annulment of the contested decision of its national allocation plan (NAP) for the 2008-2012 period arguing that the Commission's request for further information was not timely under Art 9.3 Directive 2003/87. The General Court annulled the contested decision, and the Commission appealed. The court upheld the annulment.
  • Federal Republic of Germany v. Commission of the European Communities (Court of First Instance, Third Chamber, Extended Composition, 2007)

    Opened in 2007

    European Court concluded, inter alia, that while Member States have a degree of freedom in establishing a scheme for greenhouse gas emission allowance trading within the Community, the Commission is authorized to verify that the adopted measures are consistent with Directive 2003/87. Furthermore, individual allocation of allowances for greenhouse gas emissions and the national allocation plan (NAP) are open to amendment under Article 11(1) of Directive 2003/87. The Court also noted that ex-post adjustments of allowances allocated by a NAP do not harm the principal objective of Directive 2003/87.
  • Dyckerhoff Polska sp. z o.o. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Drax Power & Others v. Commission of the European Communities (Court of First Instance, 2007)

    Opened in 2007

    Applicant contended that the Commission wrongly rejected the United Kingdom national allocation plan (NAP) for a second time following its decision in Case T-178/05, United Kingdom v. Commission, on the grounds that the proposed amendments were notified too late. The court dismissed the application as inadmissible.
  • Commission of the European Communities v. Italian Republic (European Court of Justice, 2006)

    Opened in 2006

    Action brought against the Italian Republic by the Commission for its failure to adopt all laws, regulations, and administrative provisions necessary to comply with Directive 2003/87/EC. The court ruled that the Italian Republic had failed to fulfill its obligations under Article 31(1) of the directive.
  • Commission of the European Communities v. Finland (European Court of Justice, 2006)

    Opened in 2006

    Finland failed to apply in full the EU ETS to the province of Aland. The Commission brought this action under the Article 226 EC procedure, contending that Finland had failed to properly implement the Directive. The Court agreed with the Commission, holding that Finland, by not implementing Directive 2003/87/EC in due time, failed to fulfill its obligations.
  • BOT Elektrownia Be?chatów S.A. & Others v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Billerud Karlsborg AB v. Naturvardsverket (EU Court of Justice, 2013)

    Opened in 2013

    The Swedish environmental protection agency, imposed penalties on the Billerud companies for failing to surrender credits under the EU Emissions Trading Scheme in 2006. The Billerud companies challenged the penalties arguing that since the failure was due to an internal error and the companies had a sufficient number of allowances at the time, they should be excused. The European Court of Justice (CJEU) found that under Directive 2003/87/EZ, penalties for failure to surrender credits still apply even if the entity held a sufficient number of allowances at that time. In addition, the CJEU found that the penalty was a lump sum and may not be varied by a national court on the basis of the principle of proportionality.
  • Azienda Agro-Zootecnica Franchini Sarl v. Regione Puglia (European Court of Justice, 2011)

    Opened in 2011

    Applicants sought reference for a preliminary ruling as to whether Italy's national legislation prohibiting the construction of wind turbines in a national park is consistent with EU's energy policy, which promotes renewable energy to combat climate change and comply with the Kyoto Protocol. The court found no evidence that the prohibition hindered renewable energy production at the national or regional level and thus determined that the prohibition was consistent with EU energy policy goals.
  • Arcelor SA v. Parliament and Council (General Court, 2010)

    Opened in 2010

    General Court of the European Union dismissed an action brought by Arcelor, a steel producer, challenging the validity of the Emissions Trading Directive. Arcelor claimed that application of certain articles of the directive violated several principles of Community law, including the right of property, the freedom to pursue an economic activity, the principle of proportionality, the principle of equal treatment, freedom of establishment and the principle of legal certainty. The General Court dismissed the action for annulment as inadmissible, noting that Arcelor is neither individually nor directly concerned by the directive.
  • Ã…lands Vindkraft AB v. Energimyndigheten (European Court of Justice, Grand Chamber, 2014)

    Opened in 2014

    A Finnish wind farm challenged defendant Swedish energy agency's refusal to grant a green electricity certificate. The agency refused on the grounds that only green electricity production installations located within the Swedish territory may be awarded the certificate. Plaintiff claimed that the territorial limitation of Sweden's energy certificate scheme under Directive 2009/28 was inconsistent with Article 34 of the Treaty on the Functioning of the European Union (TFEU). The court upheld Sweden's national support scheme and found that it was compatible with TFEU Article 34 because the national quota promotes increased use of renewable energy sources in electricity production.
  • Borealis Polyolefine GmbH v. Bundesminister (European Court of Justice, 2016)

    Opened in 2016

    This European Court of Justice rejected arguments from three industrial firms—one German, one Dutch, and one Italian—that they should be granted a larger number of free greenhouse gas emissions allowances under the European Union's greenhouse gas Emissions Trading Scheme (ETS). The Court also instructed the European Commission to revise its approach to determining how many free allowances to grant—a step that has injected uncertainty into the markets built on the ETS. Several features of the ETS are critical to the case: some allowances are auctioned to emitters and others are given away for free; there are a fixed proportion of free allowances, which are granted only to firms that face competition from non-EU firms—a category that excludes electricity generators; the process for calculating the number of allowances—auctioned and free—begins with member states' submission of emission sources and estimated volumes; responding to members states' overestimation of the allowances due to their industrial firms, the European Commission issued Decisions in 2011 and 2013 to govern the calculation of a "correction factor." The Court found that the European Commission's 2013 Decision established a "correction factor" calculation that ignored relevant information, and on that basis instructed the Commission to revise its approach by March 2017. The Court's ruling largely ratified the November 2015 recommendation issued in the case by Advocate General Kokott, but deviated in one important respect: whereas Kokott had concluded that too many free allowances were granted to the firms, the ECJ determined that it was unclear whether too many or too few had been granted.
  • Air Transport Association of America v. Secretary of State for Energy and Climate Change (EU Court of Justice, 2011)

    Opened in 2011

    U.S. airline operators filed a claim in the European Union Court of Justice seeking to avoid inclusion in the EU's Emissions Trading System on the grounds that it was invalid as applied to them and not justified by international law or specific arguments between the EU and the United States. The Court, confirming an earlier decision of its advocate general, rejected the claim, holding that the EU has the right to permit a commercial activity, in this instance air transport, to be carried out in its territory only on the condition that operators comply with the criteria that have been established by the EU. The court rejected the argument by the airlines that the ETS could not apply to flights that mostly take place outside of EU territory. A 2008 Directive requires that, beginning January 1, 2012, all airlines flying into, out of, and within the EU possess enough carbon allowances to cover their greenhouse gas emissions.
  • Afton Chemical Limited v. Secretary of State for Transport (European Court of Justice, 2010)

    Opened in 2010

    Afton Chemical, a British MMT producer, challenged the EU limits and labeling requirements for the use of the metallic fuel additive MMT. The European Court of Justice ruled that the limit on MMT, adopted in the revised fuel quality Directive 98/70/EC, does not violate the precautionary principle and the principles on equal treatment and proportionality. The court concluded that the EC places significant weight on the protection of human health and the environment. Reducing the health and environmental risks associated with MMT use outweighs the economic interests of Afton Chemical.
  • U.S. Steel KoÅ¡ice v. Commission of the European Communities , T-27/07

    Opened in 2007

    In Case T-489/04 ("U.S. Steel Kosice I"), applicant U.S. Steel Kosice requested the annulment of a 2006 Commission decision on the Slovak NAP for Phase I of the EU ETS on the grounds that the Slovak Republic had been pressured by the Commission during allegedly non-transparent, bilateral negotiations into reducing the total number of allowances under the NAP. The court dismissed the application as inadmissible, ruling that the reduction of the total quantity of allowance and the Commission's decision on the NAP did not individually affect the applicant's interests. In the second case, Case T-27/07 ("U.S. Steel Kosice II"), applicant sought annulment of the Commission's decision regarding the Slovak NAP for Phase II. The court held that the action was inadmissible for the same reason above. Applicant unsuccessfully appealed the decision to the European Court of Justice in Case C-6/08.
  • Cementownia "Warta" S.A. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Cementownia "Odra" S.A. v. Commission of the European Communities (Court of First Instance, 2008)

    Opened in 2008

    Applicants in the above actions challenged the Commission of the European Communities' decision rejecting the Polish Phase II national allocation plan (NAP) for the allocation of GHG emission allowances. The Court dismissed all actions as inadmissible because the Commission's decision did not directly and individually affect the Applicants.
  • Armando Ferrao Carvalho and Others v. The European Parliament and the Council

    Opened in 2018 Last development in July, 2019

    Ten families, including children, from Portugal, Germany, France, Italy, Romania, Kenya, Fiji, and the Swedish Sami Youth Association Saminuorra, brought an action in the EU General Court seeking to compel the EU to take more stringent greenhouse gas (GHG) emissions reductions. Plaintiffs allege that the EU's existing target to reduce domestic ghg emissions by 40% by 2030, as compared to 1990 levels, is insufficient to avoid dangerous climate change and threatens plaintiffs' fundamental rights of life, health, occupation, and property. The lawsuit has two major components. First, plaintiffs bring a nullification action, asking the court to declare three EU legal acts as void for failing to set adequate ghg emissions targets. The three EU legal acts are: Directive 2003/87/EC governing emissions from large power generation installations (ETS); regulation 2018/EU on emissions from industry, transport, buildings, agriculture, and etc. (ESR); and regulation 2018/EU on emissions from and removals by land use, land use change, and forestry (LULUCF). Plaintiffs argue that inadequate emissions reductions violate higher order laws that protect fundamental rights to health, education, occupation, and equal treatment as well as provide obligations to protect the environment. These higher rank laws include: the EU Charter of Fundamental Rights (ChFR), the Treaty on the Functioning of the European Union (TFEU), the United Nations Framework Convention on Climate Change (UNFCCC), and the Paris Agreement. Plaintiffs ask the court to order that the three emissions reductions laws remain in force until improved versions of the Acts can be enacted. Art. 263 of the Treaty on the Functioning of the EU (TFEU) is the basis for this procedural action. The second action concerns non-contractual liability. Article 340 of the TFEU provides a mechanism for injunctive relief when three conditions are met: 1) there is an unlawful act by the EU institution(s), 2) the unlawful act is a serious breach of a law that protects individual rights, and 3) there is a sufficient causal link between the breach and the damages. Demanded relief is an injunction to compel the EU to set more stringent ghg emissions reductions targets through the existing framework of the ETS, ESR and LULUCF regimes in order to bring the EU into compliance with its legal obligations. Plaintiffs assert this would require a 50%-60% reduction in ghg emissions below 1990 levels by 2030 or whatever level the court finds appropriate. The European General Court did not rule on the merits, but dismissed the case on procedural grounds, finding that the plaintiffs could not bring the case since they are not sufficiently and directly affected by these policies ("direct and individual concern" criterion). The court concluded that the plaintiffs did not have standing to bring the case because climate change affects every individual in one manner or another and case law requires that plaintiffs are affected by the contested act in a manner that is "peculiar to them or by reason of circumstances in which they are differentiated from all other persons, and by virtue of these factors distinguishes them individually." The court rejected plaintiffs' argument that the interpretation of the concept of ‘individual concern' referred to in the fourth paragraph of Article 263 TFEU is not compatible with a fundamental right to effective judicial protection under Article 47 of the Charter of Fundamental Rights. Nor did the court find that plaintiffs could bring the case under the other possible criteria under the fourth paragraph of Article 263 of the TFEU which would require that they were direct addressees of the legislative package in question or they contested a regulatory act that was of direct concern to them. The plaintiffs appealed to the European Court of Justice on July 11, 2019, arguing that the EU General Court erred in concluding that plaintiffs lacked standing under Article 263, and by holding that plaintiffs needed to establish standing under Article 263 in order to bring a claim for non-contractual liability.
  • Ville de Lyon v. Caisse des dépôts et consignations (European Court of Justice, 2010)

    Opened in 2010

    This reference for a preliminary ruling arose when the City of Lyon requested the administrator of the French national registry of greenhouse gas emission allowances to provide information on the sales of emissions allowances by the operators of the urban heating sites in 2005. The administrator refused to provide the information. The court found that while information on emissions allowance transactions is "environmental information" within the meaning of the Environmental Information Directive, the data could not be released because it had not reached the expiry of the five-year period and there were no overriding public interest served by the disclosure of such information which would outweigh the confidentiality of the information.
  • Å KO-ENERGO, s.r.o. v. Odvolacó finan?nó ?editelstvó (European Court of Justice, 2015)

    Opened in 2014 Last development in February, 2015

    Å KO-ENERGO, s.r.o. acquired free greenhouse gas ("GHG") emission allowances pursuant to Article 10 of Directive 2003/87 ("Article 10"), which provided that EU Member states must allocate at least 90% of allowances free of charge from 2008 through 2012. The Czech Republic Tax Office levied a 32% gift tax on the allowances pursuant to Czech Law No. 357/1992, which had been amended in 2010 to impose gift taxes on free GHG emissions allowances. A court of appeal in the Czech Republic requested a preliminary ruling from the European Court of Justice on the question of whether Article 10 precludes application of the Czech gift tax to emissions allowances obtained free of charge. The Court concluded that the gift tax was inconsistent with Article 10, because it undermined the directive's objective to temporarily reduce the economic impact of the EU GHG emission allowances market. The Court directed to the referring court the question of whether the gift tax "respect[s] the 10% ceiling on the allocation of emissions allowances."
  • Green Network SpA v. Autorità per l'energia elettrica e il gas (European Court of Justice, 2014)

    Last development in November, 2014

    An Italian company, Green Network SpA ("Green Network"), imported renewable energy from a Swiss supplier in 2005. Under Italian law, energy companies were required to purchase a certain number of green certificates each year, but could seek an exemption where they imported renewable energy from countries with analogous laws promoting renewable energy. Where the exporting country was not a member of the European Union, the exemption was available only if there was a prior agreement between the importing and exporting countries regarding recognition of guarantees of origin. When Green Network requested an exemption from its obligation to purchase green certificates, the Italian national grid manager rejected that request since there was no agreement regarding guarantees of origin between Italy and Switzerland at the time the renewable energy was imported. Green Network brought an action in administrative court, which was dismissed. Green Network appealed the dismissal, and the appeals court referred to the European Court of Justice the question, inter alia, whether the Italian law conflicted with EU directives. The Court held that the Italian law was precluded since guarantees of origin fall within an area largely covered by EU law.
  • Essent Belgium NV v. Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt (European Court of Justice, Fourth Chamber, 2014)

    Opened in 2014

    A Belgian electricity supplier (Essent) challenged the decision of the defendant regulatory authority (VREG) to impose fines on Essent for failing to meet its quota obligation for the use of renewable energy. Pursuant to Belgium's national support scheme, VREG refused to accept Essent's submission of "guarantees of origin" attesting to the production of green electricity outside of the Flemish region. Essent argued, inter alia, that VREG's decision was inconsistent with the Treaty on the Functioning of the European Union (TFEU) and the Agreement on the European Economic Area (EEA). The court held that European Union law does not require a national support scheme promoting the use of renewable energy to extend to green electricity produced in other European Union nations. In reaching its decision, the court reasoned that the law at issue was justified on public interest grounds, since it contributed to the European Union's pledge to combat climate change by reducing emissions of greenhouse gases.
  • Bundesrepublik Deutschland v. Nordzucker AG (European Court of Justice, 2015)

    Opened in 2015

    Nordzucker AG ("Nordzucker"), a sugar refinery operator in Germany, produced an emissions report for 2005 pursuant to Directive 2003/87/EC, part of the European Union's greenhouse gas emissions trading scheme. Nordzucker's emissions report excluded emissions resulting from steam generation necessary to operate the refinery's drying facility on the basis of a letter from a German Ministry stating that such facilities were exempted from compulsory emissions trading schemes. An expert verified the report, and Nordzucker surrendered emissions allowances equal to the emissions stated in the report. Subsequently, the German Emissions Trading Authority examined Nordzucker's emissions report and found that it should have included emissions attributable to the refinery's drying facility. Nordzucker revised its emissions report and surrendered additional allowances. German authorities found Nordzucker liable for failing to timely surrender emissions allowances and levied a penalty as provided in Article 16(3) of Directive 2003/87. After a series of appeals, the German Federal Administrative Court referred to the European Court of Justice the question whether excess emissions penalties apply where an operator surrenders allowances equal to emissions stated in a verified report, but where the report is later found to understate the operator's emissions and additional allowances are surrendered. The European Court of Justice found that such penalties should not apply and that, in such cases, national authorities should establish proportionate penalties taking into account relevant factual circumstances.
  • Agrargenossenschaft Neuzelle eG v. Landrat des Landkreises Oder-Spree (European Court of Justice, 2013)

    Opened in 2013

    This case was a request for a preliminary ruling on two 2009 amendments to the agricultural rules in the Council Regulation that establish economic support schemes for farmers. The support scheme provided direct income support to farmers, however it was amended such that all direct payments beyond a certain amount should be reduced by a certain percentage each year. The savings made through these reductions would then be used to finance measures under the rural development policy, in light of the "new and demanding challenges" faced by the agriculture sector, "such as climate change and the increasing importance of bio-energy, as well as the need for better water management and more effective protection of biodiversity." The Preamble also noted that Parties to the Kyoto Protocol, the EU and its member states are called upon to "adapt its policies in the light of climate change considerations." The Court reviewed two issues: (1) whether a new provision to the Regulation to reduce the amount of direct payments to farmers was valid, against an existing provision that already set the amount, in light of the principle of protecting legitimate expectations; (2) and whether a four percent increase for farmers with larger holdings exceeding 300,000 euros violates the principle of non-discrimination. The Court ruled that the purpose of the earlier provision was to establish support schemes for farmers, and that the decreases in direct payments, as well as the percentage of reductions were valid, and did not violate any applicable principles of EU law.
  • European Commission v. Council for the European Union (European Court of Justice, 2015)

    Opened in 2015

    Australia approached the European Commission (the "Commission") to negotiate linking the EU's greenhouse gas emissions trading scheme with Australia's emissions trading system. A formal recommendation authorizing the opening of negotiations with Australia was adopted by the Commission and forwarded to the Council for the EU (the "Council"). After Member States requested greater involvement in the negotiations with Australia, the Council approved negotiating directives which 1) required the Commission to "report in writing to the Council on the outcome of the negotiations after each negotiating session and, in any event, at least quarterly" and 2) laid out specific procedures for the negotiations, including allowing the Council or a special committee to establish detailed negotiating positions for the EU. The Commission brought an action to annul these sections of the negotiating directives on the basis that they exceeded the Council's authority and encroached on the Commission's power. The Advocate General issued an opinion finding that the Council is entitled to ask for regular reports on the negotiations process, but it may not unilaterally impose detailed procedures for the conduct of international negotiations. The Advocate General recommended that the Court annul the section of the negotiating directives requiring specific negotiating procedures.
  • INEOS Kahn GmbH v. Bundesrepublik Deutschland (C58/17)

    Opened in 2015

    INEOS operates a petrochemical plant that incorporates an industrial thermal power plant to provide steam through the combustion of liquid and gaseous waste materials stemming from the manufacturing processes of the site's chemical production facilities. On 23 January 2012, INEOS applied to the Deutsche Emissionshandelsstelle (German Emissions Trading Authority, "the DEHSt") for a free allocation of emission allowances, including for process emissions from the combustion of incompletely oxidised carbon from chemical reactions in which the carbon-bearing material participates in the reaction but the primary purpose of which is not heat generation. The DEHSt refused to allocate allowances free of charge for process emissions stemming from the combustion of liquid waste, claiming that only gaseous waste is entitled to such emissions. The question before the ECJ was whether Article 3(h) of Commission Decision 2011/278/EU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which excludes greenhouse gas emissions from the combustion of incompletely oxidised carbon in a liquid state from the concept of "process emissions sub-installation." The ECJ ruled that Article 3(h) of Commission Decision 2011/278/EU does not preclude national legislation that excludes greenhouse gas emissions from the combustion of incompletely oxidised carbon in a liquid state from the concept of "process emissions sub-installation."
  • INEOS Koln GmbH v. Bundesrepublik Deutschland (C-572/16)

    Opened in 2015 Last development in February, 2018

    INEOS operates an installation that produces chemical products and that has been subject to EU Emissions Trading System (EU ETS) requirements since 2008. INEOS applied to the German government for free allocation of emission allowances for their installation for the period 2013-2020. INEOS filed this application on time. Later, INEOS challenged the German government's decision about how many free emissions allocations to award the company, claiming that it had not considered data relating to direct emissions for 2006 and 2007, which it was required to do. The German government claimed it was not required to consider that data, because it had been submitted after the deadline for the initial application. The European Court of Justice (ECJ) asked whether Article 10a of Directive 2003/87/EC and Commission Decision 2011/278/EU must be interpreted as meaning that they preclude a national provision, which lays down, for the submission of an application for the free allocation of emission allowances for the period 2013-2020, a limitation period upon the expiry of which the applicant is deprived of any possibility to correct or complete its application. The ECJ ruled that the two directives must not be interpreted as precluding such a national provision and that Germany could impose such a deadline.