18 June 2014

Preliminary reference to ECJ regarding EU emissions trading scheme

De Brauw is representing BP, Shell, Tata Steel, Chemelot and a number of other clients in proceedings before the Dutch Council of State against the Dutch National Implementation Measure. Before the Council of State can render judgment, it must be established whether the correction factor applied to the allocations of emission allowances has been correctly determined. To achieve clarity on this issue, the Council of State referred six questions to the Court of Justice for a preliminary ruling in its judgment of 11 June 2014.

Installations that fall within the scope of the EU emissions trading scheme – the "EU ETS" – have to match annual CO2 emissions with emission allowances. In principle, those allowances are auctioned, but installations are being allocated a number of allowances for free. The Dutch Minister of Infrastructure and the Environment has issued a decision regarding the free allocation of allowances to Dutch installations, the "Dutch NIM". In the Dutch NIM, the Minister has implemented a "cross-sectoral correction factor" as determined by the European Commission.

As a result of this cross-sectoral correction factor, installations receive considerably fewer allowances. Claimants feel that the Commission has calculated the cross-sectoral correction factor in violation of the underlying EU Directive, and have initiated proceedings before the Dutch Council of State to reverse the Dutch NIM. In the proceedings, claimants pushed for a request for a preliminary ruling on the validity of the cross-sectoral correction factor.

In other European countries (e.g. Belgium, Denmark, Germany, Austria, Spain, UK and Sweden), proceedings against the National Implementation Measure are also pending, and an Austrian court requested that the Court of Justice issue a preliminary ruling in proceedings against the Austrian National Implementation Measure.​

After the Court of Justice has rendered its preliminary judgment, the case before the Council of State will be continued.

Team
​Nicolien van den Biggelaar and Iris Kieft