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.