Wednesday

7th Jun 2023

EU court slaps down Brussels attempts to lower eastern CO2 emissions

  • The price of carbon dropped sharply after the news (Photo: European Commission)

Poland and Estonia have won a court challenge to European Commission attempts to rein in their carbon emissions, a move that could threaten the European Union's flagship mechanism for combatting climate change.

The European Court of First Instance on Wednesday backed complaints from the two eastern EU member states, saying that the commission had "exceeded the limits of its power" when it rejected their national carbon emission reduction plans.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We are extremely disappointed and we are studying the ruling with a view to a possible appeal," said commission environment spokeswoman Barbara Helfferich.

"The commission is studying the judgment carefully with a view to a possible appeal," she continued.

"The commission will take all possible action in order to protect the integrity of the European-wide market for allowances and minimise the legal uncertainty created by these rulings."

Under the EU's emissions trading scheme, the bloc's main pillar of its climate policy, major carbon emitters must submit annually a number of emission allowances to their government that are equivalent to their CO2 emissions for that year. If they do not release as much carbon as their allocation, they can sell on their surplus allowances. If they exceed their carbon allowances, they are obliged to purchase extra.

The main fault with the ETS however has been that member states, responsible for emissions allowance allocations, have over-allocated allowances.

As a result, from 2012, the emissions allowances will be centralised in the hands of the commission, ending the system of national allocation plans (NAPs).

Until then, the commission has the power to review these plans. But the court found that in limiting the NAPs of Estonia and Poland, it had surpassed the boundary of its authority.

"The court finds ... that by specifying a specific quantity of allowances ... and by rejecting the national plan of the Republic of Estonia," one ruling read, "the Commission has exceeded the limits of its power of review."

A similar judgement was offered after Poland's complaint. Both submissions were backed by other eastern European member states: Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania and Romania.

The court said that the commission was "encroaching on the exclusive competence [of] the member states."

The EU executive has two months to lodge an appeal.

Meanwhile, the Czech Republic, which had recently given notice that it intended to withdraw its own, similar complaint, on Wednesday signalled that it will continue with the court case.

Following the ruling, the price of carbon skidded, as markets worried that if the judgement is upheld by the European Court of Justice, member states will increase the allocations in their emission plans, a move that could see the price of carbon crash.

The decision comes at an awkward time for Brussels, with the EU holding up its track-record on climate change as the most ambitious amongst industrialised powers in the lead-up to the UN climate conference in Copenhagen in December.

Sanjeev Kumar, the emissions trading scheme co-ordinator for conservation group WWF told EUobserver: "I've never seen a ruling as direct and aggressive."

"But at the same time in the end it's a lot of fuss about nothing. The ruling only applies to phase two of the ETS [until 2012], after which allocation is centralised."

ECB: eurozone home prices could see 'disorderly' fall

The European Central Bank in its Financial Stability Review warned EU home prices could see a 'disorderly' fall as high mortgage rates are making houses unaffordable for households and unattractive for investors.

Adapting to Southern Europe's 'new normal' — from droughts to floods

Extreme weather events in recent months have worsened agricultural production in southern Europe, prompting concerns for authorities in Portugal, Spain, France and Italy. As countries will likely face dryer conditions, experts urge adaptation measures for the 'new normal'.

PFAS 'forever chemicals' cost society €16 trillion a year

Researchers found that global societal costs of the so-called forever chemicals or PFAS amount to €16 trillion per year. Meanwhile, the bigger producers of these chemicals are also among the ones spending the most to lobby EU policies.

Analysis

Final steps for EU's due diligence on supply chains law

Final negotiations on the EU due diligence law begin this week. But will this law make companies embed due diligence requirements in their internal processes or incentive them to outsource their obligations to third parties?

Latest News

  1. EU Commission wants better focus on mental health care
  2. Right of Reply from the Hungarian government
  3. True scale of horror in today's Belarus hard to comprehend
  4. Israeli settlers encircling Jerusalem, EU envoys warn
  5. No clear 'Qatargate effect' — but only half voters aware of EU election
  6. Part of EU middle class 'being squeezed out', MEP warns
  7. Migration commissioner: Greek pushback film 'clear deportation'
  8. In 2024, Europe's voters need to pick a better crop of MEPs

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us