#EUETS: European Court of Justice ruling gives Commission ten months to review ETS figures

The European Court of Justice ruled today (28 April) on a number of cases brought by undertakings in Italy, the Netherlands and Austria on the emission allocations granted to them by national authorities. The court found that errors in the data received my the Commission means that the amounts will have to be corrected.

The court found that the data collected from EU countries was not always correct – due to misunderstandings in different language versions of the Emissions Trading Scheme (ETS) Directive. This meant that the Commission was not able to accurately determine the maximum annual amount of allowances. The Court has found that the maximum annual amount of allowances could be higher or lower than that thus far determined by the Commission.

In order to avoid serious repercussions on a high number of legal relations entered into in good faith, the Court’s decision will not affect definitive allocations which have already taken place.

Given the legal vacuum created by this decision the ECJ has declared that its judgment will not produce effects until ten months’ time. This will enable the Commission to adopt the necessary measures to rectify this situation.

Conservative MEP Ian Duncan is calling on the European Commission to respond urgently to a legal ruling that places a question mark over its flagship emissions trading scheme. Duncan is drawing up the European Parliament’s report on so-called ‘Phase IV reform’, this concerns the EU emissions trading system for the period after 2020. Duncan said: "We suddenly find ourselves in legal limbo at a time of critical importance to the Phase IV reform. The Commission needs to clarify the situation as quickly as possible.

"This ruling is significant because it will affect how many allowances are to be offered free during Phase IV. According to early analysis, the share could have to move from 57% to 58%."

WWF welcomed today’s decision - they said that the Court had found that too many pollution permits had been received by energy-intensive industries. WWF wants to see a phasing-out of pollution permits.

The Commission is looking into the implications of the judgement:

 

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