Borealis AB, Kubikenborg Aluminum AB, Yara AB, SSAB EMEA AB, Lulekraft AB, Vórmevórden i Nynóshamn AB, Cementa AB, Haganós Sweden AB v. Naturvardsverket

European Union

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: Borealis AB, Kubikenborg Aluminum AB, Yara AB, SSAB EMEA AB, Lulekraft AB, Värmevärden i Nynäshamn AB, Cementa AB, Höganäs Sweden AB (Corporation)

Side B: Naturvårdsverket (Government)

Core objectives: Legal validity of "correction factor" calculation for emissions allowances

Summary

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.

Case documents

Judgment

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 ...