European Union

Iberdrola S.A. et al.,Judgement of the Court of 17 of Oct. 2013 (Case C-566/11, 2013)

Jurisdiction: European Union


Side A: Gas Natural SDG SA (Corporation)


Side B: European Commission (Government)


Side C: Administración del Estado and Others, Endesa SA and Others, Tarragona Power SL, Bahía de Bizcaia Electricidad SL, E.ON Generación SL and Others (Corporation)


Core objectives: Challenge to emissions allowance


Summary
Spain amended its system for purchasing wholesale electricity by reducing the remuneration of electricity production to remove unfair windfalls for electricity producers caused by issuance of allowances for free under the EU Emissions Trading System (ETS). Electricity producers challenged the measure asserting that it was contrary to Directive 2003/87/EZ (establishing EU ETS) because it effectively made emissions allowances costly. The European Court of Justice rejected the electricity producers arguments, finding instead that the Directive does not preclude remuneration for electricity producers for the purpose of counterbalancing windfall profits resulting from the allocation of emission allowances. In addition, the court found that the legislative measure does not remove the incentive to reduce greenhouse gas emissions and was thus not inconsistent with the goals of the Directive.
Case documents

from the Grantham Research Institute
from the Grantham Research Institute
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