Action brought on 7 February 2007 - US Steel Košice v Commission

(Case T-27/07)

Language of the case: English

Parties

Applicant: US Steel Košice sro (Košice, Slovakia) (represented by: E. Vermulst, lawyer, and C. Thomas, solicitor)

Defendant: Commission of the European Communities

Form of order sought

Annul the Commission decision of 29 November 2006 concerning the national allocation plan for the allocation of greenhouse gas emission allowances notified by Slovakia in accordance with Directive 2003/87/EC of the European Parliament and of the Council;

order the Commission to pay the applicant's costs.

Pleas in law and main arguments

The applicant seeks the annulment of Commission decision of 29 November 2006 concerning the national allocation plan for the allocation of greenhouse gas emission allowances for the period 2008-2012 notified by Slovakia in accordance with Directive 2003/87/EC¹.

In support of it's application, the applicant firstly alleges that the contested decision infringes Title 4, point 2(a) of Annex XIV to the Act of Accession 2003² in that it incorrectly asserts that the conditions in that provision are independent obligations applying until 2009 regardless of whether Slovakia continues to grant the applicant the tax exemption that Slovakia may apply to the applicant until the end of the fiscal year 2009 notwithstanding Article 87 and 88 EC. The applicant argues that, accordingly, the decision is also contrary to criterion (4) of Annex III to Directive 2003/87/EC, which provides that the national allocation plan shall be consistent with other Community legislative and policy instruments.

Secondly, the applicant submits that the contested decision infringes the principle of legitimate expectations in that the Commission at several occasion made the applicant expect that the production limitations provided for in Title 4, point 2(a) of Annex XIV to the Act of Accession would cease to apply once the applicant no longer benefited from the tax exemption.

Thirdly, the applicant contends that the contested decision is unlawful because, instead of carrying out its limited functions under Article 9(3) of Directive 2003/87/EC, the Commission carried out an entirely independent calculation of the appropriate total emissions in Slovakia and imposed this on the Slovak Republic. Thereby the Commission usurped the competence of the Member States under Articles 9 and 11 of Directive 2003/87/EC.

Fourthly, the applicant submits that the contested decision is unlawful in that it was based on a rigid mathematical calculation which was imposed without public consultation and which ignored known factors influencing emissions specific to Slovakia in the period 2008-2012. The applicant finds that this approach violated Article 9(1) and 11(2) of Directive 2003/87/EC, criteria (1), (2) and (3) of Annex III to the said directive as well as the principle of legitimate expectations. The applicant contends that insofar as the Commission possessed any margin of appreciation, the Commission committed a manifest error in that appreciation.

Finally, the applicant claims that the contested decision is vitiated by a misuse of powers as it was motivated by a desire to achieve a scarcity of allowances as such in order to drive the prices of allowances upwards.

____________

¹ - 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 (OJ 2003 L 275, p. 32).

² - Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 33).