European Union

INEOS Koln GmbH v. Bundesrepublik Deutschland (C-572/16)

Jurisdiction: European Union

Principle law(s): EU Emission Trading Scheme (EU ETS) (Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC)

Side A: INEOS Koln GmbH (Corporation)

Side B: Bundesrepublik Deutschland (Government)

Core objectives:

INEOS challenged national provision, derived from Directive 2003/87/CE, establishing a time limit for applying for free emissions allocations for the period 2013-2020. 

INEOS operates an installation that produces chemical products and that has been subject to compulsory emissions trading since 2018 through the EU Emissions Trading System (EU ETS).

On 23 January 2012, INEOS applied to the German Emissions Trading Authority, within the prescribed time limit, for free allocation of emission allowances for their installation for the period 2013-2020. Later, INEOS challenged the German Authority’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 Authority claimed it was not required to consider that data, because it had been submitted after the deadline for the initial application. 

On 29 September 2015, INEOS brought an action against that decision before the Berlin Administrative Court. The company argued that it had inadvertently omitted to submit certain data, wrongly assuming that the Authority already had that data. Ineos added that the Authority was under an obligation to ask it to supplement or correct the data provided for the purposes of the allocation application. The Administrative Court of Berlin referred to the ECJ a question regarding the interpretation of Article 10(a) of Directive 2003/87/CE and the provisions of Decision 2011/278: must it be interpreted as precluding national legislation which lays down, for the submission of an application for the free allocation of emission allowances for the period 2013-2020, a deadline by which an applicant must 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.

Case documents

Related laws and policies
  • This law implements European Union legislation
    EU Emission Trading Scheme (EU ETS) (Directive 2003/87/EC establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC)

    Passed in 2003 Legislative

    This Directive establishes a Community GHG emissions trading scheme from 2005, to enable the Community and the Member States to meet their Kyoto Protocol commitments. Directive 2004/101/EC reinforces the link between the EU's emission allowance trading scheme and the Kyoto Protocol by making the latter's 'project-based' mechanisms (Joint Implementation and the Clean Development Mechanism) compatible with the scheme. From 2005, all installations in the energy sector, iron and steel production and processing, the mineral industry, and the wood pulp, paper and board industry, and emitting the specific GHG associated with that activity, must possess a permit issued by the appropriate authorities. Each Member State must draw up a national plan indicating the allowances it intends to allocate for the relevant period and how it proposes to allocate them to each installation. The Directive also provides for flights that arrive or depart from a Member State's territory to be subject to the EU ETS (from 2012), measure that so far applies to intra-EU flights. Any operator failing to surrender the quantity of allowances commensurate with the emissions from his/her installation during the previous year will have to pay EUR100 (USD 125) per tCO2e and buy allowances for the excess emissions. The 2003 Directive was amended by Directive 2004/101/EC, Directive 2008/101/EC, Regulation (EC) No 219/2009, Directive 2009/29/EC, Decision No 1359/2013/EU, Commission Regulation (EU) No 389/2013, Regulation (EU) No 421/2014 and Regulation (EC) 2017/2392. Directive 2009/29/EC amends Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community. Directive (EU) 2018/410 was adopted in March 2018 to enhance cost-effective emission reductions and low-carbon investments.

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