Language of document : ECLI:EU:C:2018:245

Case C302/17

PPC Power a.s.

v

Finančné riaditeľstvo Slovenskej republiky and Daňový úrad pre vybrané daňové subjekty

(Request for a preliminary ruling from the Krajský súd v Bratislave)

Reference for a preliminary ruling — Environment — Directive 2003/87/EC — Scheme for greenhouse gas emission allowance trading — Objectives — Free allocation of allowances — National legislation making transferred and unused allowances subject to taxation)

Summary — Judgment of the Court (Sixth Chamber), 12 April 2018

Environment — Atmospheric pollution — Directive 2003/87 — Scheme for greenhouse gas emission allowance trading – Method of allocation of allowances – Allocation of allowances free of charge — Principle — Scope — National legislation making transferred and unused allowances subject to taxation at 80% of their value — Unlawful

(European Parliament and Council Directive 2003/87, Recitals 5 and 20 and Arts 1 and 10)

Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which taxes, at 80% of their value, greenhouse gas emission allowances allocated free of charge which have been sold or not used by the undertakings subject to the greenhouse gas emission trading scheme.

By eliminating virtually all of the economic value of emission allowances, the tax amounts to a negation of the incentive mechanisms underpinning the emission allowance trading system and, consequently, to the removal of the incentives intended to promote the reduction of greenhouse gas emissions. Thus deprived of 80% of the economic value of the emission allowances, undertakings lose almost all incentive to invest in measures to reduce their emissions which enable them to derive profit from the sale of their unused allowances.

Thus, it must be held that that tax has the effect of neutralising the principle of the greenhouse gas emission allowances allocated free of charge provided for in Article 10 of Directive 2003/87, and of undermining the objectives pursued by that directive.

(see paras 27-29, operative part)