OPINION OF ADVOCATE GENERAL
SZPUNAR
delivered on 25 November 2021(1) (i)
Case C‑161/20
European Commission
v
Council of the European Union
(Action for annulment – Decision of the Permanent Representatives Committee (Coreper) – Decision endorsing the submission to the International Maritime Organization concerning the introduction of life cycle guidelines to estimate well-to-tank greenhouse gas emissions of sustainable alternative fuels with a view to its transmission by the Presidency of the Council to the International Maritime Organization on behalf of the Member States and the Commission – Exclusive, shared or complementary competence of the European Union – Institutional prerogatives of the Commission under Article 17(1) TEU)
I. Introduction
1. The present case concerns two distinct issues. The first one pertains to the principles and the modalities of the external representation of the European Union within an international organisation of which the Union is neither a member nor an observer. The second one relates to the nature, whether exclusive or shared, of the external competence of the Union as regards a discussion on a future instrument concerning an area covered to some extent by EU law.
2. At the heart of the first issue lies the question whether Article 17(1) TEU, in so far as it provides for the Commission’s prerogative to represent the European Union in external relations, is applicable to situations where the Union cannot exercise its external competence other than through the intermediary of the Member States.
3. The crux of the second issue can be summarised in the question of whether a future instrument of an international organisation, the nature, content and scope of which are yet to be determined, is likely to affect common EU rules or alter their scope within the meaning of Article 3(2) TFEU in fine.
4. The answers to these questions determine the legality of a decision to submit to a committee of the International Maritime Organization (‘the IMO’) on behalf of the Member States and of the European Commission (and not the European Union) a proposal regarding matters relating to maritime transport and the protection of the environment.
II. Legal framework
A. International law
5. The IMO was established by the Convention on the Inter-Governmental Maritime Consultative Organization (2) adopted by the United Nations Maritime Conference in Geneva on 6 March 1948, which entered into force in 1958 (‘the IMO Convention’).
6. According to Article 1(a) of the IMO Convention, one of the purposes of the IMO is ‘to encourage and facilitate the general adoption of the highest practicable standards in matters concerning the … prevention and control of marine pollution from ships …’
7. Article 2 of the IMO Convention provides that in order to achieve its purposes the IMO shall, inter alia:
‘(a) … consider and make recommendations …;
(b) provide for the drafting of conventions, agreements, or other suitable instruments, and recommend these to Governments and intergovernmental organizations …’
8. The IMO Convention does not contain a clause providing for the accession of regional (economic) integration organisations. According to its Article 4, membership of the IMO is open to States only. Accordingly, unlike all EU Member States, who are members of the IMO, the European Union itself cannot accede to the IMO Convention and become a member.
9. The IMO Convention provides however in Article 25(a):
‘The Council may enter into agreements or arrangements covering the relationship of the Organization with other organizations … Such agreements or arrangements shall be subject to approval by the Assembly.’
10. According to Article 66 of the IMO Convention:
‘The [IMO] may, on matters within its scope, co-operate with other intergovernmental organizations which are not specialized agencies of the United Nations, but whose interests and activities are related to the purposes of the [IMO].’
11. In that context, on 28 June 1974 the European Commission concluded a cooperation arrangement with the IMO (3) (‘the 1974 Cooperation Arrangement’), under then Article 229 of the EEC Treaty. It encompasses the right of the Commission to participate as an observer in the work of the IMO, including its Committees. The Commission has no right to vote in the IMO.
12. The IMO’s principal organs are an Assembly, a Council, five Committees and a Secretariat. (4) One of those Committees is the Marine Environment Protection Committee (‘the MEPC’). The MEPC consists of all IMO Members. (5) Pursuant to Article 38 of the IMO Convention, the MEPC ‘shall consider any matter within the scope of the [IMO] concerned with the prevention and control of marine pollution from ships …’.
13. Rule 5 of the Rules of Procedure of the MEPC provides:
‘…
3 The Secretary-General shall invite to be represented by observers at each session of the Committee at which matters of direct concern to them are on the agenda:
.1 other intergovernmental organizations with which an agreement or special arrangement has been made; and
.2 non-governmental international organizations with which the Organization has established relationships in accordance with the rules governing consultations with such organizations.
4 Upon invitation by the Chair and with the consent of the Committee concerned, such observers may participate without vote on matters of direct concern to them.’
14. One of the key IMO conventions is the International Convention for the Prevention of Pollution from Ships, signed in London on 2 November 1973, as supplemented by the Protocol of 17 February 1978 (‘the Marpol Convention 73/78’), which establishes rules to combat pollution of the marine environment. All Member States, but not the European Union itself, are parties to that convention. The Protocol of 1997 amending the Marpol Convention 73/78 signed in London on 26 September 1997 (‘the 1997 Protocol’) added Annex VI to that convention, entitled ‘Prevention of Air Pollution from Ships’.
15. Under the Marpol Convention 73/78, as amended by the 1997 Protocol (‘the Marpol Convention 73/78/97’), the IMO adopted a number of measures aimed at reducing emissions of greenhouse gases (‘the GHG’) from international shipping. The MEPC itself established an Intersessional Working Group on Reduction of GHG Emissions from Ships (‘the ISWG‑GHG’), which reports to the MEPC during its sessions.
B. EU Law
16. The sixth sentence of Article 17(1) TEU provides:
‘With the exception of the common foreign and security policy, and other cases provided for in the Treaties, [the Commission] shall ensure the Union’s external representation.’
17. Pursuant to Article 3(2) TFEU:
‘The Union shall … have exclusive competence for the conclusion of an international agreement when its conclusion … is necessary to enable the Union to exercise its internal competence, or in so far as its conclusion may affect common rules or alter their scope.’
18. Regulation (EU) 2015/757 (6) (‘the MRV Regulation’) entered into force on 1 July 2015.
19. Article 1 of the MRV Regulation, headed ‘Subject matter’, states:
‘This Regulation lays down rules for the accurate monitoring, reporting and verification of carbon dioxide (CO2) emissions and of other relevant information from ships arriving at, within or departing from ports under the jurisdiction of a Member State, in order to promote the reduction of CO2 emissions from maritime transport in a cost effective manner.’
20. Article 4(1) to (3) of that regulation stipulates:
‘1. In accordance with Articles 8 to 12, companies shall, for each of their ships, monitor and report on the relevant parameters during a reporting period. They shall carry out that monitoring and reporting within all ports under the jurisdiction of a Member State and for any voyages to or from a port under the jurisdiction of a Member State.
2. Monitoring and reporting shall be complete and cover CO2 emissions from the combustion of fuels, while the ships are at sea as well as at berth. Companies shall apply appropriate measures to prevent any data gaps within the reporting period.
3. Monitoring and reporting shall be consistent and comparable over time. To that end, companies shall use the same monitoring methodologies and data sets subject to modifications assessed by the verifier.’
21. Article 5 of that regulation, headed ‘Methods for monitoring CO2 emissions and other relevant information’, provides in paragraph 1 thereof:
‘For the purposes of Article 4(1), (2) and (3), companies shall, for each of their ships, determine the CO2 emissions in accordance with any of the methods set out in Annex I …’
22. Part A of Annex I to that regulation lays down the following formula for the purpose of calculating CO2 emissions: ‘Fuel consumption × emission factor’, and contains a table with a list of default values for emission factors for seven non-alternative fuels. The table is followed by a provision stating that appropriate emission factors shall be applied for biofuels, alternative non-fossil fuels and other fuels for which no default values are specified.
23. Article 1 of Directive 2014/94/EU, (7) headed ‘Subject matter’, provides:
‘This Directive establishes a common framework of measures for the deployment of alternative fuels infrastructure in the Union in order to minimise dependence on oil and to mitigate the environmental impact of transport. This Directive sets out minimum requirements for the building-up of alternative fuels infrastructure, including recharging points for electric vehicles and refuelling points for natural gas (LNG and CNG) and hydrogen, to be implemented by means of Member States’ national policy frameworks, as well as common technical specifications for such recharging and refuelling points, and user information requirements.’
24. Article 1 of Directive (EU) 2018/2001, (8) headed ‘Subject matter’, states:
‘This Directive establishes a common framework for the promotion of energy from renewable sources. It sets a binding Union target for the overall share of energy from renewable sources in the Union’s gross final consumption of energy in 2030. It also lays down rules on financial support for electricity from renewable sources, on self-consumption of such electricity, on the use of energy from renewable sources in the heating and cooling sector and in the transport sector, on regional cooperation between Member States, and between Member States and third countries, on guarantees of origin, on administrative procedures and on information and training. It also establishes sustainability and [GHG] emissions saving criteria for biofuels, bioliquids and biomass fuels.’
25. Article 29 of Directive 2018/2001 provides detailed rules on the sustainability and GHG emissions saving criteria for biofuels, bioliquids and biomass fuels.
III. Background to the dispute
26. On 13 April 2018, the MEPC adopted the ‘Initial IMO Strategy on reduction of GHG emissions from ships’ (‘the Initial Strategy’). (9) Among the candidate short-term measures on matters relating to the reduction of GHG emissions from ships, the Initial Strategy lists the development of robust life cycle GHG/carbon intensity guidelines for all types of fuels, in order to prepare for an implementation programme for effective uptake of alternative low-carbon and zero-carbon fuels. (10)
27. The life cycle refers to the assessment of GHG emissions from the fuel production to the ship (Well-to-Wake (‘WtW’)); from primary production to carriage of the fuel in a ship’s tank (Well-to-Tank (‘WtT’), also known as upstream emissions) and from the ship’s fuel tank to the exhaust (Tank-to-Propeller (‘TtP’) or Tank-to-Wake, also known as downstream emissions). (11)
28. In 2019, during its 74th session, the MEPC approved the terms of reference for the sixth meeting of the ISWG‑GHG (‘ISWG‑GHG 6’). ISWG‑GHG 6 was instructed, inter alia, to further consider concrete proposals to encourage the uptake of alternative low-carbon and zero-carbon fuels, including the development of life cycle GHG/carbon intensity guidelines for all relevant types of fuels and incentive schemes, as appropriate.
29. In this respect, following the discussions during the meeting in November 2019, ISWG‑GHG 6 supported the establishment of a dedicated workstream for the development of life cycle GHG/carbon intensity guidelines for all relevant types of fuels. It agreed that the priority for international shipping should be given to the development of TtP emission factors for alternative fuels and that this work should cover terminology and accounting issues. It noted however that it was important to be cognisant of upstream emissions (WtT) as ‘these were relevant for assessing the sustainability of alternative fuels’. Finally, it ‘invited interested Member States and international organizations to cooperate and submit proposals for draft guidelines on life cycle GHG/carbon intensity for all relevant types of fuels’. (12)
30. In response to the latter invitation, the Commission prepared a draft submission (‘the draft submission’) to the seventh meeting of the ISWG‑GHG with the heading reading ‘… submitted by the European Commission on behalf of the European Union’. The draft submission suggested the introduction of life cycle guidelines to estimate WtT GHG emissions. It proposed that the guidelines continue to rely on TtP emissions as the primary metric but should define a methodology to adjust this metric in order to reflect WtW emissions. This methodology could rely on the use of adjustment values applied to the existing default values for TtP emissions.
31. The draft submission was presented to the Council in annex to the Commission Staff Working Document SWD(2019) 456 (‘the SWD’). (13) According to the SWD, the enclosed submission was presented with a view to establishing the EU position. However, it was not to be a formal position under Article 218(9) TFEU. (14) The Commission asserted that the act which the MEPC would eventually be called upon to adopt would constitute an act having legal effects and would be capable of decisively influencing the content of the relevant EU legislation, namely the MRV Regulation, Directive 2018/2001 and Directive 2014/94. (15) For the latter reason, the draft submission fell within the scope of the exclusive competence of the European Union. It also claimed that the submission of proposals or information papers to the IMO on issues falling within the scope of the exclusive external competence of the European Union were acts of external representation and should thus be made by the Commission or the EU Delegation in accordance with Article 17(1) TEU and Article 221 TFEU. (16)
32. The draft submission was examined by the Shipping Working Party of the Council. It rejected the initial proposal pertaining to the use of adjustment values and suggested the use of specific WtT values instead. Those WtT values, combined with the existing default values for TtP emissions, would reflect the performance of fuels in use. Apart from that, the Shipping Working Party did not share the Commission’s assertions as to the nature of the EU’s competence in the area covered by the submission. It considered that the submission fell under exclusive Union competence only to the extent that its subject matter was covered by legal acts referred to in the SWD. To the extent that the matters covered by the submission were not largely covered by those acts, the understanding was that the submission was made by the Member States under shared competence, and that it should not be construed as exercising shared Union competence. As a result, the Member States considered that the submission should be made by the Member States and the Commission.
33. The Commission’s draft submission was thus amended to reflect the above conclusions. First, the parts relating to the use of the adjustment values were replaced by proposals concerning the use of WtT values. Second, the title of the submission was amended to read as: ‘… submitted by Austria, [other EU Member States listed in alphabetical order] and the European Commission’ (with no mention of the European Union). The Permanent Representatives Committee (Coreper) was invited to endorse the text of the draft submission as amended (‘the disputed submission’) with a view to its transmission to the IMO by the Presidency of the Council. (17)
34. On 5 February 2020, Coreper endorsed the disputed submission to the IMO with a view to its transmission to the IMO by the Council Presidency (‘the contested decision’). In accordance with the Council’s practice in IMO matters, no formal decision took place.
35. In a declaration entered into the minutes of the meeting of 5 February 2020, the Commission expressed its disagreement with the contested decision. It maintained, in essence, that the European Union had exclusive competence in respect of the disputed submission and only the Union could thus make the submission. The submission was an act of external representation and should therefore be made by the Commission on behalf of the EU. According to the Commission, the procedural arguments against it presenting submissions to the IMO on behalf of the Union were not convincing. There was no evidence to suggest that the IMO, as a specialised agency of the United Nations, would reject the submission.
36. On 7 February 2020 the disputed submission was transmitted by email to the ISWG‑GHG by the Republic of Croatia, which held the Presidency of the Council at the material time. The main text of the email read as follows: ‘Croatia, currently holding the Presidency of the European Union, is pleased to transmit the attached submission on behalf of the co-sponsors (Austria, other Member States of the European Union and the European Commission) …’.
IV. Forms of order sought by the parties
37. The Commission claims that the Court should:
– annul the Council decision, contained in the act of Coreper of 5 February 2020, endorsing the submission to the International Maritime Organization (IMO) concerning the introduction of life cycle guidelines to estimate well-to-tank greenhouse gas emissions of sustainable alternative fuels, with a view to its transmission by the Presidency of the Council to the IMO on behalf of the Member States and the Commission;
– maintain the effects of the decision;
– order the Council to pay the costs.
38. The Council contends that the Court should:
– dismiss the action in its entirety;
– order the Commission to pay the costs.
39. The Kingdom of Belgium, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the French Republic, the Kingdom of the Netherlands, the Republic of Finland and the Kingdom of Sweden were granted leave to intervene in support of the form of order sought by the Council.
40. All of the abovementioned parties, with the exception of the Federal Republic of Germany and the Kingdom of Sweden, participated in the hearing which took place on 7 September 2021.
V. Analysis
41. In support of its application, the Commission relies on two pleas in law. The first plea alleges breach of the exclusive competence of the European Union under Article 3(2) TFEU in the area addressed by the disputed submission, covered, in the Commission’s view, to a large extent by the common rules applicable to intra-EU situations. The second plea alleges breach of the Commission’s institutional prerogatives under Article 17(1) TEU, this institution alone being entitled to act on behalf of the European Union and to ensure the latter’s external representation.
42. I will first examine the admissibility of the action before moving on to an examination of its merits. .
A. Admissibility
43. The admissibility of the action is not contested by the Council or the intervening Member States, with the exception of the Hellenic Republic, which contends in essence that the Court has no jurisdiction to rule on whether the EU has participatory status at the IMO.
44. In accordance with settled case-law, any decision adopted by an institution, office, body or agency of the European Union, irrespective of its nature or form, which is intended to have legal effects constitutes a challengeable act for the purposes of Article 263 TFEU. (18)
45. The Court has also held that a measure adopted by Coreper must be amenable to judicial review where it is intended, as such, to produce legal effects and therefore falls outside the framework of its preparation and implementation function. (19)
46. The contested decision establishes the European Union’s position in respect of an issue falling within EU competences, such as maritime transport and protection of the environment. Its submission to the IMO implies an obligation of the Member States and of the Commission to support this position before the IMO committee in accordance with the obligation of sincere cooperation. Thus, in that sense, the contested decision is intended to produce legal effects. As such, it constitutes a challengeable act for the purposes of Article 263 TFEU. I therefore conclude that the action for the annulment of the contested decision is admissible and that the Court has jurisdiction under Article 263 TFEU to review the legality of that decision.
B. Merits
47. In challenging the contested decision, the Commission relies on two pleas in law: the first one concerns the nature of the EU’s competence in the field covered by the disputed submission, while the second relates to the rules of external representation of the EU.
48. It is important to note that the Commission challenges the contested decision in so far as, in the first place, it designates EU Member States and the Commission (and not the EU) as authors (co-sponsors) of the disputed submission and, in the second place, it entrusts the Presidency of the Council, i.e. the Republic of Croatia, with the task of transmitting the disputed submission to the IMO. By contrast, it does not challenge the actual content of the disputed submission (save for its heading in part indicating its co-sponsors). The Commission regards this content as relevant to the outcome of the case in that its subject matter falls within the exclusive competence of the European Union.
49. In that respect, the Council contends that, in accordance with the rules governing membership of and participation in the IMO, no submission can be sent to that organisation ‘on behalf of the European Union’, irrespective of whether it falls within the scope of its exclusive competence. In line with this contention, some of the intervening Member States question the relevance of the first plea: they argue that the arrangements for the external representation of the European Union arising from the IMO rules required the adoption of the contested decision.
50. These arguments cannot be dismissed from the outset. The nature of the European Union’s competence, be it exclusive or shared, could be of no relevance to the outcome of the case if there were reasons to consider that the submission could not, in any event, have been made by the European Union. Therefore, I will first examine the second plea and then the first plea.
1. The second plea in law
51. By its second plea in law, the Commission claims that the contested decision breaches its institutional prerogatives under Article 17(1) TEU.
(a) The arguments of the parties
52. The Commission puts forward the argument that it has the power of external representation of the European Union under Article 17(1) TEU in respect of the disputed submission. The 1974 Cooperation Arrangement, read in the light of Resolution 65/276 of the UN General Assembly, (20) did not preclude such submissions being made on behalf of the European Union. Moreover, (21) in the Note Verbale of 27 November 2009, the Council and the Commission informed the IMO that from 1 December 2009 the European Union would exercise all rights and assume all obligations of the European Community, including its status in the organisation. Ultimately, ISWG‑GHG 6 addressed its invitation to all ‘interested Member States and international organisations’, and, given the subject matter of the discussion, the European Union is an ‘interested international organisation’. Therefore, the Commission proposed that the disputed submission be presented as made ‘by the European Commission on behalf of the European Union’. However, the contested decision determined that the submission would be made by the Presidency on behalf of ‘the Member States and the Commission’ and would contain no indication that the Member States act in the interest of the European Union. In so far as the disputed submission should be understood as having been made on the Union’s behalf, the contested decision prevented the Commission from ensuring the external representation of the European Union, in breach of Article 17(1) TEU.
53. The Commission also claims that the monopoly of representation of the Union granted to the Commission by the Treaties implies that the rotating Presidency of the Council can never legally represent the Union or exercise its external competences. With no legal basis for the Council decision to prevent the Commission from representing the European Union in the context of the disputed submission, the contested decision infringes Article 17(1) TEU.
54. The Council, supported by the intervening Member States, contends that no action by the European Union is possible under IMO rules since it is neither a member of nor an observer in the IMO. The Commission alone has the status of observer in that organisation by virtue of the 1974 Cooperation Arrangement. Neither the UNGA Resolution 65/276 nor the Note Verbale of 27 November 2009 can alter anything in that regard. The European Union could not, by virtue solely of the entry into force of the Treaty of Lisbon, exercise any rights or assume any obligations of the Community in the IMO since the European Community itself did not enjoy any rights or have any obligations in the IMO. Consequently, while the Commission, as an observer, may submit documents to the MEPC, such as reports, studies, etc. on its own behalf, it cannot submit documents to the IMO ‘on behalf of the Union’ since the Union is neither a member of, nor an observer in, the IMO. For this reason, the submission to the IMO on behalf of the European Communities made in 2005 by the Netherlands was rejected by the IMO. In the Council’s view, it does not follow from the text of the invitation that the submission could have been submitted on behalf of the Union, since it is not an organisation with observer status and is therefore not entitled to participate in the MEPC.
55. The Council further contends that it follows from the case-law of the Court that where the Union is not a member of an international organisation, it is for the Member States, acting jointly, to send submissions to that organisation in the interest of the Union, including in areas of exclusive Union competence. The Member States act on their own behalf. Moreover, given that the Commission does not have the right to vote in the IMO, including in the MEPC, when the MEPC is called upon to adopt an act, only the Member States can act jointly in the interests of the Union with regard to matters falling within the scope of EU competence.
56. According to the Council, supported by the intervening Member States, nothing in the Treaties prevents the Member States from assigning certain tasks related to their own external representation in the way they see fit. The Member States are free to decide on a case-by-case basis how they want to organise their external representation. There is an established practice that the Member State holding the Presidency is called upon to perform such tasks.
(b) Assessment
(1) Preliminary remarks
57. It would appear that traditional State-centric concepts of international organisation developed after the Peace Treaty of Westphalia of 1648 continue to be applied. (22) Hence, for instance, the reticent approach towards international organisations being members of other international organisations. Admittedly, it is now firmly established that, as a matter of principle, such membership is possible. However, international organisations are rarely full members of other organisations. (23)
58. There are different forms of participation in the work of an international organisation. A major distinction is made between the participation of members and that of non-members, including observers. (24)
59. An international organisation’s membership of another international organisation is subject to the latter’s rules contained in its constituent treaty, (25) and in particular to the inclusion therein of the so-called REIO or RIO (26) clause.
60. It is generally considered that it is easier for an international organisation to obtain status of observer in an international organisation than it is to become a member. (27) In that connection, it should be emphasised that there is no one status of ‘observer’ as such. The precise meaning of that term may differ between organisations, and even from observer to observer within the same organisation. (28) In principle, the rights of observers are not full rights. Observers usually cannot vote, or circulate documents as official documents without special permission; they might need support of a full member in order to present proposals. (29) Their participation can be limited to formal meetings only and their formal interventions may only be possible at the end of the interventions of formal participants. (30)
61. In the absence of the R(E)IO clause in the constituent treaty of an international organisation, the European Union is precluded from acting directly in its forum as a member. Without a special decision or agreement providing for it, the European Union cannot even act as an observer in such an organisation. In such situations, its competences cannot be exercised in a manner prescribed by the Treaties.
62. The interpretation of the rules of an international organisation concerning forms of membership and participation therein, including those rules determining eligibility for membership, rests in principle with the international organisation in question. The Court has no jurisdiction to interpret them in a way that is binding on the organisation concerned. (31)
63. Ideally, international law should take into account the nature of the European Union as a supranational organisation, together with its rules on the exercise of external competences. Whenever it is not the case, the European Union must find the most appropriate means allowing it to ensure that its external competences, as laid down in the Treaties, are properly exercised.
64. The above considerations give rise to a sort of discrepancy between, on the one hand, the modalities for the European Union’s external action as laid down in the Treaties and, on the other hand, the modalities for action which may be taken in an international forum. The Court is fully aware of this discrepancy, as is reflected in its case-law. According to that case-law, first, when the Union decides to exercise its powers, these must be exercised in observance of international law. (32) Second, whenever rules applicable in an international forum preclude the Union from acting in its name, it can exercise its external competence through the intermediary of its Member States acting jointly in its interest. (33) Third, the Member States acting in an international forum must do so in accordance with the constitutional rules governing the external representation of the Union, namely that of sincere cooperation, consistency and unity. (34)
65. In line with that case-law, decisions on the European Union’s position within international organisations of which it is not and cannot become a member, adopted by the Council pursuant to Article 218(9) TFEU, provide that that position will be expressed by the Member States, acting jointly in the interest of the Union. (35)
66. The present case concerns an action in the interest of the European Union within the IMO. Membership of that organisation is reserved for States only and the European Union cannot become a member. The IMO Convention provides for the possibility of cooperation with other organisations as observers. The particularity of the IMO resides in the fact that, pursuant to the 1974 Cooperation Arrangement, it is the Commission and not the Union that enjoys the status of observer within that organisation.
67. In this context, the main question in the present case is whether an action in the interest of the Union within the IMO should be undertaken by the Union, the Commission or the Member States, and whether the answer to that question depends on the nature of the European Union’s competence in the area in question.
(2) The contested decision: content and reasons
68. The contested decision provides, in essence, that the disputed submission will be presented to the IMO as the submission of the Member States and of the Commission, and that it will be transmitted to the IMO by the Presidency of the Council.
69. The contested decision was adopted informally, in accordance with the practice accepted by the institutions. (36) The consequence thereof is that its reasons do not stem directly from the decision as such but can only be inferred from circumstances accompanying its adoption, reflected in the preparatory documents and in the minutes of the Coreper meeting. (37)
70. In that regard, it follows from the Council document addressed to the Coreper that the contested decision was adopted in consequence of a finding that the submission fell under exclusive Union competence only to the extent that its subject matter was covered by legal acts referred to in the SWD. As to the remainder, the understanding was that the submission was to be made by the Member States under shared competence. From the Commission’s statement entered into the minutes of the Coreper meeting it can be also inferred that the Member States raised an argument whereby the submissions to the IMO on behalf of the EU were not possible under the relevant IMO rules.
71. As far as the scope of the delegation to the Presidency of the Council is concerned, it should be noted that the contested decision confined it to a purely technical act of transmission of a disputed submission to the IMO. In reality, it consisted of drafting an introductory email, enclosing the disputed submission as an attachment thereto and, as the parties themselves put it, ‘clicking on the [Send] button’. In particular, the Presidency was by no means designated to present and defend the submission in the MEPC or ISWG‑GHG. In no way did the contested decision confine the Commission’s right as an observer in the IMO to promoting and defending the submission.
(3) The admissibility of the Union’s submission to the IMO
72. The preliminary issue that needs to be resolved is that of the status of the Union in the IMO in relation to the disputed submission. On the one hand, it is common ground between the parties that the Union is not a member of the IMO and does not have observer status within that organisation. (38) On the other hand, the Commission claims that, as regards the disputed submission, the Union was entitled to act within the IMO in its own name. In this respect, the Commission deems two circumstances to be relevant: the status of the Union in the United Nations system following the entry into force of the Treaty of Lisbon, and the text of the invitation from the IMO ISWG‑GHG 6.
73. Admittedly, the interpretation of acts of the IMO does not fall within the scope of interpretation of EU law. The Court must nonetheless carry out such an interpretation in order to review the legality of the contested decision.
74. Following the 1974 Cooperation Arrangement signed with the Commission, the IMO has always considered the Commission (and not the European Community or later the Union) to have observer status within the organisation. (39) The practical consequence thereof was that a submission made by the Kingdom of Netherlands on behalf of the European Community to the IMO in 2005 in response to its invitation (40) was rejected. It follows from the statements of the parties that the ground for that decision of the IMO was that the European Community was not a Member State of the IMO and did not have observer status with the organisation.
75. It does not seem to me that the Treaty of Lisbon, the UNGA Resolution 65/276 or the Note Verbale could have changed anything in this regard. Admittedly, the Treaty of Lisbon provided for the legal personality of the Union and for its succession to the European Community. This, along with the rules on the representation of the Union, was recognised in UNGA Resolution 65/276 and was also subject of the Note Verbale. However, it is common ground between the parties that UNGA Resolution 65/276 as such is not applicable to UN specialised agencies, including the IMO. Moreover, the substitution of the European Union for the Community is irrelevant as it was not the European Community that enjoyed the status of observer within the IMO but the European Commission. Finally, the Note Verbale, as a unilateral statement on behalf of the Union, could not by itself have changed the status of the Union within the IMO.
76. As a result, it must be found that the Union has neither membership of nor observer status within the IMO. Only the Commission enjoys the status of observer within that organisation. (41)
77. As regards the invitation from ISWG‑GHG 6, it is true that the range of actors invited by ISWG‑GHG 6 to submit proposals for life cycle GHG guidelines was by no means limited to the members of the organisation but also included international organisations. The Commission appears to infer therefrom that it was an open invitation addressed to any international organisation interested in submitting a proposal. The Council and the intervening Member States disagree with such a reading of the invitation.
78. There should not be any doubt that the invitation from ISWG‑GHG 6 was addressed to international organisations participating in the work of the IMO. The invitation was contained in an internal ISWG‑GHG document, which suggests from the outset that its addressees were subjects enjoying some status in this working group of the IMO. Moreover, the addressees were invited to present initial proposals concerning a complex technical issue that would serve as a starting point for further discussions. Only international organisations participating in the activities of the IMO were capable of promoting, discussing, explaining and defending their proposals in the course of ISWG‑GHG’s work/activities. Therefore, it should be considered that only those actors with membership of or observer status within the IMO MEPC were the addressees of the invitation in question and could submit their submissions without risk of rejection.
79. Consequently, there were no grounds for considering that the text of the invitation constituted a particular basis entitling the Union to submit the disputed submission.
(4) The scope of the sixth sentence of Article 17(1) TEU
80. The Commission claims that the contested decision infringes its prerogatives under Article 17(1) TEU in so far as this article provides that, with the exception of common foreign and security policy and other instances provided for in the Treaties, the Commission is to ensure the Union’s external representation.
81. Therefore, the essential question is whether the scope of the aforementioned provision is limited to those situations in which the Union acts in its own name or whether it also encompasses situations where the Union, prevented from exercising its external competence in its own name, exercises it through the intermediary of the Member States.
82. The case-law of the Court concerning the exercise of the Union’s competence through the intermediary of the Member States (42) does not seem to have become obsolete following the entry into force of the Treaty of Lisbon. (43) If the sixth sentence of Article 17(1) TEU were applicable to these situations, the Member States acting jointly in the interest of the Union would need to be represented by the Commission. Such a prerogative of the Commission does not follow from the Treaties.
83. The only logical interpretation of the sixth sentence of Article 17(1) TEU is that this provision is applicable to situations where the Union may, as a subject of international law, act in its own name. This interpretation is in line with the common understanding of the term ‘representation’ as relating to a question of who can be recognised as being entitled to act in the name of a subject of international law, (44) in particular with a view of assuming obligations in its name in relation to other subjects. (45)
84. Accordingly, whenever the Member States act jointly in the Union’s interest since the Union itself is prevented from exercising its external competence on account of the rules of international law, they do not act as representatives of the Union but act in their own name as its trustees. (46) In consequence, they (and not the Union) become subjects of rights and obligations flowing from the concluded agreements. (47) I am thus of the view that the sixth sentence of Article 17(1) TEU, in so far as it provides for the Commission’s prerogative of representation of the Union in external relations, is not applicable to situations where the Union is not acting in its own name. (48)
85. Whenever the Member States act together as trustees of the Union due to the impediment to the Union acting itself, they are free to decide whether they act individually or whether they assign certain tasks to be undertaken in their name by one of them. The possibility of such ‘acting by proxy’ is possible according to a customary rule of international law. (49) There is no reason to regard this rule to be inapplicable to relations between the Member States of the Union whenever they act in their own names but in the interest of the Union. In my opinion, the sixth sentence of Article 17(1) TEU does not preclude the same.
(5) The indication of acting in the interest of the Union
86. The Commission argues that the decision wrongly omits the indication that the Member States were acting in the interest of the Union.
87. Given the absence of a formal decision of the Council where such an indication could have been included, I understand this argument as concerning the heading of the disputed submission.
88. In my view, it follows from the principle of sincere cooperation that whenever the Member States act jointly in the interest of the Union as its trustees they should convey this information to their external partners. Their action has its origins in the obligations flowing from their membership of the European Union and, as such, is not fully autonomous. This fact is not irrelevant for external partners. The general principle of acting in good faith requires that these partners be made aware of it.
89. Nevertheless, the appropriate form of expression of the fact that the Member States are acting in the interest of the Union depends on the circumstances. In particular, it should not take a form that could raise doubts as to the identity of the actor taking action. On the one hand, I thus tend to agree with the Commission that there was no impediment to signal to the IMO MEPC that the action in question was taken in the interest of the Union. On the other hand, this does not necessarily mean that the heading of a submission should have contained words ‘on behalf of the European Union’, particularly given the fact that such an indication has been understood by the IMO in the past as a designation of an actor taking action within the IMO, which led to the rejection of the submission made in the name of the Union (then the European Community).
90. In my view, in the present case, there was no doubt that the co-sponsors acted in the interest of the Union. This follows from the designation of the sponsors of the disputed submission, being EU Member States acting alongside the European Commission. The presence of the latter clearly indicated that the action involved the European Union. It is also evident from the text of the email transmitting the disputed submission. The author stated that the email was sent by a Member State holding the Presidency of the European Union. (50) It also presented the co-sponsors of the submission as Member States of the European Union. In that context, it was clear that the disputed submission was an action taken in the interest of the Union.
(6) Concluding remarks
91. Given that, in light of the above analysis, there are no grounds to consider that the Union was among those actors entitled to submit the disputed submission to the IMO, I conclude that the sixth sentence of Article 17(1) TEU providing for the representation of the Union by the Commission was not applicable.
92. The scope of the modalities for action on the part of the Union in relation to the disputed submission was thus limited under international law to an action of the Member States acting jointly in the interest of the Union. Exceptionally, given the special invitation addressed to international organisations (participating in the work of the IMO MEPC), the European Commission was entitled to act alongside the Member States.
93. In that context, the designation of the EU Member States and of the European Commission as co-sponsors of the disputed submission cannot have resulted in an infringement of the Commission’s prerogative to represent the Union laid down in the sixth sentence of Article 17(1) TEU. The inclusion of the Commission as co-sponsor of the disputed submission was in line with the Commission’s proposal contained in the SWD and draft submission, in so far as that was possible under IMO rules as interpreted until now by the IMO itself. That inclusion was an expression of the fact that the action was undertaken in the interest of the Union.
94. For the reasons set out in point 85 of the present Opinion, the delegation to the Presidency of the Council of the task of transmitting the disputed submission to the IMO did not infringe the sixth sentence of Article 17(1) TEU either. Moreover, that delegation even reinforced the fact that the Member States were acting in their capacity as members of the European Union.
95. Consequently, I am of the view that the contested decision did not infringe the sixth sentence of Article 17(1) TEU, since this was not applicable to the disputed submission.
(c) Conclusion regarding the second plea
96. The second plea should be dismissed as unfounded since the contested decision does not infringe Article 17(1) TEU.
2. The first plea in law
97. The outcome of my analysis of the second plea renders the analysis of the first plea unnecessary. Irrespective of the nature of the Union’s competence, there are reasons to consider that the law of the IMO provides only for the admissibility of submissions in the interest of the Union that are made by the Member States (as IMO members) and by the Commission (as an IMO observer (51)). Accordingly, the nature of the Union’s competence in the area covered by the disputed submission has no impact on the legality of the contested decision. Even if it were exclusive, the disputed submission could not have been made as a submission of the European Union.
98. Nonetheless, I will proceed with the analysis of the first plea in case the Court does not share my point of view on the second plea.
99. The first plea alleges infringement of Article 3(2) TFEU and of the Union’s exclusive competence. Although it is not set out as such in the application, the plea consists in essence of two parts: the first concerns the last (third) situation envisaged in Article 3(2) TFEU, while the second relates to the second situation referred to in that article.
(a) The first part of the first plea
(1) The arguments of the parties
100. The first part of the first plea alleges infringement of the last part of Article 3(2) TFEU. According to the Commission, the future act adopted by the IMO would affect common rules or alter their scope, which implies that the EU’s competence is exclusive. In particular, the methodology for the estimation of GHG emissions in maritime transport proposed in the disputed submission falls within the area which is covered to a large extent by common EU rules. In that connection, the Commission relies on the MRV Regulation, Directive 2014/94 and Directive 2018/2001. It also argues that the disputed submission may affect those common rules in light of their foreseeable development.
101. The Council, supported by the intervening Member States, contends that the Commission has failed to establish that the disputed submission may affect common EU rules or alter their scope within the meaning of Article 3(2) TFEU. The mere fact that it might pursue a similar ultimate objective as the rules contained in the aforementioned EU legislation is not sufficient to consider that it concerns an area covered to a large extent by those rules, or that it may affect them within the meaning of Article 3(2) TFEU. According to the Council, an analysis of foreseeable future development and the nature and content of Union rules and provisions of the international instrument is lacking in the Commission SWD enclosing the draft disputed submission.
102. In that regard, the Kingdom of Belgium asserts that the disputed submission seeks solely to establish the key concepts and principles, before proceeding with the development of draft guidelines. As matters stand at present, therefore, there are not even any draft guidelines, let alone any risk of the common Union rules being affected.
103. The Federal Republic of Germany argues that Article 3(2) TFEU is not applicable, in principle, to the submission of proposals for the development of non-binding guidelines. In that connection, the present case does not concern measures that are binding under international law and could justify an extension of the scope of Article 3(2) TFEU, since the MEPC/ISWG‑GHG is not acting as a rule-maker in the present case. The submission at issue here initially constitutes a contribution to a discussion.
104. As far as the MRV Regulation is concerned, the Commission claims that it establishes rules for the accurate monitoring, reporting and verification of carbon dioxide (CO2) emissions from ships in order to promote the reduction of CO2 emissions from maritime transport in a cost-effective manner. It is based on the actual fuel consumption of the vessel, which is multiplied by an emission factor reflecting combustion of the fuel concerned. The development of a methodology for the calculation of WtT emissions proposed in the disputed submission would fall within the area covered by the MRV Regulation. If adopted by the IMO, it would necessarily entail the modification of the emission factors listed in Annex I, section A, to that regulation.
105. In that regard, the Council and the majority of the intervening Member States contend in essence that it cannot be assumed that the future guidelines would lay down a new and comprehensive methodology for the MRV of emissions as the content and the subject matter of those guidelines remains uncertain. In that respect, the disputed submission does not suggest the development of a new MRV methodology. In particular, it does not require any modification of IMO or EU MRV rules. The disputed submission merely refers to the estimation of WtT GHG emissions in order to allow ship operators to determine the impact of alternative fuels, to compare the WtW performance of such fuels and to incentivise the uptake of the said fuels. It covers also a wider scope than the MRV Regulation which applies only to carbon dioxide (CO2) emissions of ships and provides for default emission values for non-alternative fuels only. That regulation system is based on a TtP approach and does not take into account WtT emissions. To reflect WtW emissions, the Commission had suggested developing specific adjustment values to be applied to existing default emission values for TtP emissions. However, the Coreper adopted a different approach, as it proposed to develop specific WtT values that would be added to TtP values. No amendment of the MRV Regulation would therefore be necessary.
106. In its reply, the Commission argues that WtT and TtP emissions are linked in the methodology set out in the disputed submission. It matters little whether for the purpose of the overall calculation of emissions WtT emissions are calculated separately from TtP emissions or whether a combined calculation is applied from the start. Contrary to the Council’s argument, the MRV Regulation applies regardless of the type of fuel, even though it does not define default emission factors for alternative fuels, which are left to be defined in the course of implementation of that regulation. The Commission also contends that the methodology envisaged by the GHG submission can be viewed as a foreseeable extension of the system currently applicable, from CO2 to other GHG emissions.
107. As regards Directive 2014/94, the Commission claims that the envisaged IMO instrument may affect the definition of ‘alternative fuels’ contained in its Article 2, point 1. It is likely that that definition would need to be adapted to any IMO rules for reasons of consistency and would likely have a horizontal effect on the scope of the body of common EU rules designed to promote the use of alternative fuels.
108. The Council and some of the intervening Member States argue that there is no ground to consider that the definition of ‘alternative fuels’ contained in Directive 2014/94 would need to be adapted to the guidelines to be adopted by the IMO on the basis of the disputed submission. The Kingdom of Belgium contends that Directive 2014/94 is completely unrelated to the content of the submission. The French Republic puts forward the argument that the disputed submission contains no definition of ‘alternative fuels’. The French Republic and the Federal Republic of Germany contend in essence that the Commission has failed to explain why the definition of ‘alternative fuels’ pursuant to Article 2(1) of Directive 2014/94 would make amendments necessary.
109. The Commission argues in its reply that it is sufficient that the GHG submission envisages rules that would overlap to a large extent with the common EU rules.
110. As far as Directive 2018/2001 is concerned, the Commission points to Article 29 thereof, which lays down detailed rules on sustainability and GHG emissions saving criteria for biofuels, bioliquids and biomass fuels. It accepts that these definitions are primarily intended for other purposes, such as measuring compliance with the renewable energy obligations of the Member States. It claims, however, that they are also likely to be affected by the future IMO instrument.
111. In the Council’s view, supported by the intervening Member States, even if Directive 2018/2001 and the disputed submission pursue a similar ultimate goal, which is to promote the production and use of renewable forms of energy with a view in particular to reduce GHG emissions, the criteria laid down by Article 29 of the directive are intended for other purposes than the ones pursued by the disputed submission. The latter aims to allow ship operators to establish accurately and compare the overall GHG implications of various alternative fuels and their performance. According to the Federal Republic of Germany, owing to the lack of correlation between the normative content of the draft guidelines and of Directive 2018/2001, there can be no question that the regulatory area is covered to a large extent by the rules of Union law.
(2) Assessment
(i) Introduction
112. Article 3(2) TFEU in fine provides for the exclusive external competence of the Union for the conclusion of an international agreement when its conclusion may affect common rules or alter their scope. In light of the case-law of the Court, that article applies not only to the conclusion of an international agreement but also at an earlier stage, when such an agreement is being negotiated and, at a later stage, when a body established by the agreement is called upon to adopt measures implementing it. (52)
113. Article 3(2) TFEU in fine is a codification of the main thread of the case-law on the implied external powers of the Union, with its origins in the judgment in Commission v Council, (53) commonly referred to as the ERTA doctrine.
114. The ERTA doctrine has evolved over time and its evolutionary process would not appear to be complete as yet. Calling it ‘one of the most impenetrable doctrines in EU law, even for the keenest legal minds’ (54) might be something of an exaggeration, but it certainly deserves the description of ‘a complex judge-made doctrine which does not lend itself to a perfect codification in one or two lines’. (55)
115. The concise summary of its current state can be found in a number of judgments and opinions given in recent years. In the Court’s own words, since the EU is vested only with conferred powers, any competence, especially where it is exclusive, must have its basis in conclusions drawn from a comprehensive and detailed analysis of the relationship between the international agreement envisaged and the EU law in force. That analysis must take into account the areas covered, respectively, by the rules of EU law and by the provisions of the agreement envisaged, their foreseeable future development and the nature and content of those rules and those provisions, in order to determine whether the agreement is capable of undermining the uniform and consistent application of the EU rules and the proper functioning of the system which they establish. (56)
116. The weight of and the relationship between the different elements referred to in the summary above are debatable. They were gradually added to the body of ERTA doctrine over the years following the subsequent judgments and opinions of the Court. It is possible to identify two categories of such elements. The elements in the first category determine the objects that are to be the subject of the analysis (EU rules and the international commitment). The elements in the second category pertain to the relationship between these objects.
117. The crux of the matter lies in the relationship concerned by the elements of the second group. (57) Should an international commitment have no effect whatsoever on EU law (taking into account its foreseeable future development), the fact that the two systems of rules concern the same area would be irrelevant for the purposes of Article 3(2) TFEU.
118. This follows not only from the wording of Article 3(2) TFEU but also from the case-law of the Court cited above. It is pointed out therein that the analysis is to be carried out in its entirety in order to determine whether the international commitment is capable of undermining the uniform and consistent application of EU rules and the proper functioning of the system which those rules establish, or, alternatively, whether the international commitments at issue, without necessarily conflicting with those rules, may have an effect on their meaning, scope and effectiveness. (58) A tangible effect of the international commitment on EU law is thus necessary in order for the condition in question to be met.
119. The condition that there be a tangible effect on EU rules should be borne in mind when examining the elements of the first category. In so far as these are concerned, the Court has held in particular that there is a risk that common EU rules may be adversely affected by international commitments undertaken by the Member States, or that the scope of those rules may be altered, where those commitments fall within the scope of those rules. (59) It has also ruled that a finding that there is such a risk does not presuppose that the area covered by the international commitments and that of the EU rules coincide fully. (60) In particular, such international commitments may affect EU rules or alter their scope when the commitments fall within an area which is already covered to a large extent by such rules. (61) In all these cases, however, finding that the respective scopes of the two systems of rules overlap is only a first step. In order for the condition in question to be fulfilled, the international commitment must have some effect on the meaning, scope and effectiveness of EU rules.
120. It must also be noted that, according to settled case-law, it is for the party concerned to provide evidence to establish the exclusive nature of the external competence of the EU on which it seeks to rely. (62)
121. In light of the above considerations I shall first analyse the scope, nature and content of the envisaged international commitment; second, compare it with the scope of the rules of the EU law invoked by the Commission; and, third, examine the effect of the international commitment on the rules of the EU law in question. (63)
(ii) The international commitment: scope, nature and content
122. In the case of the conclusion, or even the negotiation, of an agreement, determining the scope, nature and content of the future international commitment is, in principle, straightforward. The present case, however, concerns a future instrument, the scope, nature and content of which is difficult to define and predict. This is due to the fact that the work on the future act is in its initial stages, where ideas for measures addressing the issue of GHG emissions from maritime fuels in the life cycle perspective have yet to be decided upon and are only now being sought and discussed.
123. Therefore, the first step is to determine the scope, nature and content of the future international commitment which should be taken into account for the purpose of the analysis under Article 3(2) TFEU. Specifically, should they be determined on the basis of the text of the invitation from ISWG‑GHG 6 or on the basis of the disputed submission?
124. The Commission and the Council agreed during the hearing that it is the content of the disputed submission that should be taken into account, and not the scope of the invitation. I agree with this position in principle. Admittedly, the invitation from ISWG‑GHG 6 is also of relevance as it sets certain (albeit broad) limits as to the scope, nature and content of the future instrument. However, the disputed submission is the only source of information on how the Union imagines that instrument. This initial conception allows the shape of the future instrument to be predicted, and can thus better serve as an object of the analysis than the open and vague invitation to submit proposals. It also allows it to be considered that there is a degree of probability that a proposal put forward by the Union will be adopted. (64)
125. In the light of the disputed submission, it should thus be found that the future international commitment to be taken into account in the analysis for the purpose of Article 3(2) TFEU is the future instrument, being the guidelines addressing the issue of GHG emissions from maritime fuels in a life cycle perspective through the introduction WtT values for alternative fuels. Those WtT values would reflect the GHG emissions in the upstream phase, while the known TtP emission values would in turn reflect the GHG emissions in the downstream phase.
126. Given the text of the disputed submission and the IMO documents, (65) including the invitation from ISWG‑GHG 6, it cannot be determined, at this stage, whether the future guidelines will be binding. (66) In particular, the disputed submission does not propose any amendments to any binding IMO instruments. (67)
(iii) The scope of the EU rules potentially affected
127. The Commission relies on three sources of EU rules that risk being affected by the future international instrument in question, namely the MRV Regulation, Directive 2014/94 and Directive 2018/2001.
128. As for the two abovementioned directives, I entirely share the view expressed and shared by the Council and some of the interveners. There are no grounds to consider that the areas covered by the directives cited overlap with that of the international instrument in a relevant way. The fact that different acts pursue the same ultimate goal of contributing to the reduction of GHG emissions and combating climate change, does not suffice in itself to determine that their provisions overlap in a relevant way from the point of view of Article 3(2) TFEU. The same ultimate goal, such as the protection of the environment or, more specifically, combating climate change, or even reducing GHG emissions, can be attained through different measures the provisions of which do not necessarily have to affect each other. In particular, the same concepts used in different acts need not be defined in the same way as the context of an act, the structure and scope of the latter can determine the definition of the former. Admittedly, it is not excluded that some horizontal definitions may be adopted but it is not the most obvious solution.
129. In that connection, the definition of ‘alternative fuels’ contained in Article 2(1) of Directive 2014/94 does not necessarily need to be amended following the adoption of the future international instrument. The Commission’s claims to the effect that it is likely that that definition would need to be adapted to any IMO rules for reasons of consistency and would likely have a horizontal effect on the scope of the body of common EU rules designed to promote the use of alternative fuels are, for the time being, purely hypothetical. The simple fact that both acts refer to the same concept does not suffice to contend that they overlap with each other if the respective purposes of the two acts are different. Directive 2014/94 uses the term of ‘alternative fuels’ to determine the scope of its rules concerning measures for the deployment of alternative fuels infrastructure. The delimitation of the scope of WtT values applicable to alternative fuels does not mean that, to that end, the term ‘alternative fuels’ cannot be given a different definition.
130. As regards Directive 2018/2001, the Commission itself admits that the definitions contained in Article 29 thereof are primarily intended for other purposes, such as measuring compliance with renewable energy obligations of the Member States. It is impossible to present arguments which allow it to be predicted that the introduction of WtT values for different fuels used in maritime transport could have an impact on the above definitions.
131. The Commission failed, in my view, to present sound arguments in support of its claims in respect of either of the directives referred to above.
132. The situation of the MRV Regulation is, however, quite different. In this respect, I share the Commission’s view that the areas covered by that regulation and by the future international instrument are closely linked.
133. The rationale of the MRV Regulation is clear. It follows from its first recital that the regulation is intended to contribute to achieve emission reductions. It is also the case of the future guidelines in the light of the disputed submission.
134. Both that regulation and those guidelines concern the same sector – maritime transport – and the same activity, the purchase and use of fuels.
135. Both are intended to provide information on GHG emissions associated with the use of particular fuels. (68) The difference is that TtP emissions are directly linked to combustion of the fuel on board a ship – that is, to the actual operations of the maritime sector – whereas WtT emissions concern the activity preceding those operations, and have no source in the activity of the maritime sector as such. There is, however, an indirect link between the two in the sense that it is the demand for fuels in the maritime sector that triggers the production of fuels and WtT emissions.
136. Lastly, the clear link between the scope of the MRV Regulation and that of the future international instrument envisaged by the disputed submission follows from the text of the latter. The proposed WtT values are not to be used separately but in conjunction with the known values for the emissions in the downstream phase (as applied in that regulation).
137. Admittedly, there are also differences between the two instruments.
138. First, the MRV Regulation relates to CO2 emissions only, whereas WtT values are intended to encompass all kinds of GHG. In this respect, it should be noted that CO2 is the GHG with the biggest share in all GHG emissions together. (69) Should the Union envisage entering into an international agreement providing for the calculation of emissions of other GHG for the purpose of emissions reduction from maritime transport, it would be impossible to claim that the instrument does not fall within the scope of an area covered to a large extent by EU law. (70)
139. Second, even if the default emission factors defined in the Annex I to the MRV Regulation are, for the time being, laid down in respect of fossil fuels only, the same annex contains a clear indication that its scope is not limited thereto. (71)
140. Third, the fact that the objective of the future guidelines is to encourage the uptake of alternative fuels does not mean that fossil fuels concerned in the first place by the MRV Regulation will not be covered. (72) It seems that the benefits of the use of alternative fuels can only be seen if it is possible to compare the same information (WtT emissions) for all fuels.
141. Fourth, admittedly, the MRV Regulation is based on the TtP approach, which, in principle, means that it concerns GHG emissions resulting from the combustion of fuel on board a ship (downstream phase). Conversely, the disputed submission provides for the adoption of WtT values reflecting GHG emissions during extraction of raw materials, and the production and distribution of fuel (upstream phase). However, even in the light of the disputed submission, these WtT values are to be combined with TtP emission values. In fact, they are meant to supplement the available information on GHG emissions in the downstream phase. This is logical as the submissions were supposed to address the issue of GHG emissions of fuels in a life cycle perspective and not only in the upstream phase. For this reason, it seems to me that the WtT values would not be of much use when taken separately. In particular, they are not to be used simply to calculate the actual emissions in the upstream phase in the process of calculating total emissions. (73) They are intended to provide information for those responsible for emissions in the downstream phase. Only when combined with the values for TtP emissions will WtT values provide information on GHG emissions resulting from the use of a given fuel in a life cycle perspective.
142. For the reasons set out above, I do not find the differences between the scopes of the two acts to be of relevance for the purpose of this analysis. Conversely, I consider that the future international instrument, in the form foreseen by the disputed submission, concerns the area that is regulated by EU law, to a large extent in the MRV Regulation.
(iv) The effect of the future international instrument on EU rules
143. Given the conclusions reached above, the crucial question is whether the Commission has demonstrated that the future international instrument will have a tangible effect on EU rules.
144. My proposed answer to the question is ‘No’.
145. In this regard, first of all, there are no grounds to find that the future international instrument will be binding in the foreseeable future. It must be found that, for the time being, it is foreseen as a non-binding act intended only to incentivise a certain behaviour within the shipping sector by providing information on GHG emissions from alternative fuels in the upstream phase. (74)
146. Admittedly, the use of WtT values as a metric providing such information would be closely linked to the use of values applied in the MRV Regulation. This does not mean, however, that their introduction by the IMO in order to reflect GHG emissions in the upstream phase would affect the system laid down by that regulation. There is no particular reason to find that the latter would need to be amended in any way. The MRV Regulation could continue to be applied in its current form for the purposes of the monitoring and reporting of actual GHG emissions from maritime transport in the downstream phase, even in the event of the adoption of the future IMO guidelines. The fact that a non-binding instrument issued by an international organisation may use the same factors as applied in that regulation in order to provide information on GHG emissions in the life cycle perspective would neither affect common EU rules nor alter their scope within the meaning of Article 3(2) TFEU.
147. In this regard, it should be pointed out that it does not seem to follow either from the disputed submission or from the IMO documentation that the future instrument is intended to replace the monitoring and reporting systems already in place. It would appear that the latter systems and the guidelines are regarded as two separate instruments which are quite independent of each other. At least, the work of the IMO MEPC on the life cycle guidelines are not presented in the IMO documentation as a first step towards the adoption of amendments to the IMO Data Collection System (‘IMO DCS’), being the IMO counterpart of the system laid down by the MRV Regulation. (75) The guidelines not having such an impact on the IMO DCS allows it to be assumed that they would not lead to the amendment of that regulation either.
148. The present case is distinct from and yet reminiscent of the case in Germany v Council. (76) The Court found in that case that the non-binding recommendations of the International Organisation of Vine and Wine (OIV) had legal effects for the purposes of Article 218(9) TFEU by reason of their incorporation into EU law by virtue of certain provisions of EU law providing expressly for this effect. (77) Although that case did not concern Article 3(2) TFEU, it appears that the finding of the Court implies that the amendment of such recommendations could be regarded as affecting EU rules within the meaning of that article.
149. This case-law cannot be transposed to the present case. There are no provisions of EU law that would contain a reference to any IMO guidelines providing for the introduction of WtT values in order to estimate GHG emissions in the upstream phase or to any other kind of life cycle GHG/carbon intensity guidelines. There are no IMO provisions that would refer to such guidelines either.
150. Admittedly, it is necessary also to take into account the future development of the EU rules in question, in so far as that is foreseeable at the time of that analysis. (78)
151. In this regard, there are no grounds, at the time of writing, to consider that the future IMO guidelines will constitute a binding act and that their adoption will require an amendment of the IMO DCS. Moreover, there are no reasons to find that in the foreseeable future the Union will adopt an act corresponding to the future IMO guidelines.
152. The Commission appears to argue that the EU will certainly adapt its legislation to the future IMO guidelines. In that connection, it relies on the upcoming amendments to the MRV Regulation, which are the result of the introduction of the IMO DCS. (79) However, in that regard, Article 22(3) of that regulation expressly lays down the obligation of such amendments. (80) The alignment of that regulation with the IMO DCS thus results from a specific provision of EU law. There is no such provision that concerns the guidelines in question. In addition, due to the apparent lack of impact of the future guidelines on the IMO DCS, (81) there are no grounds to consider that the obligation to amend the MRV Regulation in line with the IMO DCS implies an obligation to amend EU legislation in line with the future guidelines.
153. It is by no means impossible that an instrument adopted by an international organisation becomes a source of inspiration for the EU legislature. However, in my view, the mere possibility of drawing inspiration from such an instrument is not sufficient to establish that corresponding autonomous EU rules will also be adopted in the foreseeable future.
154. In light of the foregoing considerations, there are no reasons, in my view, to find that the future international instrument, as currently envisaged, is capable of undermining the uniform and consistent application of EU rules and the proper functioning of the system which they establish. Similarly, it cannot be found that this international instrument may have an effect on the meaning, scope and effectiveness of EU rules.
(b) The second part of the first plea
(1) The arguments of the parties
155. The Commission claims that, given the global nature of maritime transport and the fight against climate change, the action of the Union in the IMO is necessary to enable the Union to exercise its internal competence.
156. The Council, supported by the intervening Member States, contends that the Commission has failed to demonstrate that such an action is necessary from a legal perspective to enable the Union to exercise its competence internally.
157. The Commission did not respond to this contention in its reply. (82)
(2) Assessment
158. The second part of Article 3(2) TFEU provides for the exclusive external competence of the Union for the conclusion of an international agreement when it is necessary to enable the Union to exercise its internal competence.
159. The second part of Article 3(2) TFEU is a codification of the case-law of the Court with its origins in Opinion 1/76. (83) According to the Court, this ground for the external exclusive competence of the Union arises in the situation in which internal competence may be effectively exercised only at the same time as external competence, (84) the conclusion of the international agreement being thus necessary in order to attain objectives of the Treaty that cannot be attained by establishing autonomous rules. (85)
160. I am of the view that the Commission failed to furnish, in its application, the evidence necessary to establish the exclusive nature of the external competence of the EU. A simple reference to the global nature of maritime transport and to the fight against climate change is insufficient. The condition of necessity for the conclusion of an international agreement in order to attain objectives of the Treaty is interpreted narrowly by the Court. (86) A global dimension of an issue falling within the competences of the EU alone does not mean of itself that the objectives of the Treaty cannot be attained without an international agreement.
161. This is especially true in the case of a non-binding act intended to provide information likely to incentivise certain behaviour within the shipping sector. The Commission has failed to demonstrate that, without the adoption of such an instrument, the objectives of the Treaty cannot be attained through the adoption of autonomous rules.
162. Accordingly, I consider that the second part of the first plea should also be dismissed.
(c) Conclusion regarding the first plea
163. In light of all the foregoing considerations concerning both parts of the first plea, I am of the view that this plea should also be dismissed as unfounded.
164. In that context, in the event that the Court does not agree with my analysis of the second plea but shares my view on the first plea, the application should be dismissed nonetheless. Even if the Union can act alone in the field falling within the scope of the Union’s shared competences, (87) the Commission’s weaker status compared to that of the EU Member States in the IMO constitutes an argument in favour of the participation of the Member States in the exercise of the Union’s external competence. (88)
VI. Costs
165. The Commission has, in my view, been unsuccessful. In its pleadings, the Council requests that the Commission pay its costs. In accordance with Article 138(1) of the Rules of Procedure, the unsuccessful party must be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Article 140(1) of the Rules of Procedure provides that Member States and institutions which have intervened shall bear their own costs.
VII. Conclusion
166. In light of all the foregoing considerations, I propose that the Court should:
– dismiss the application;
– order the European Commission to bear its own costs and to pay those incurred by the Council of the European Union;
– order the Kingdom of Belgium, the Czech Republic, the Kingdom of Denmark, the Federal Republic of Germany, the Hellenic Republic, the French Republic, the Kingdom of the Netherlands, the Republic of Finland and the Kingdom of Sweden to bear their own costs.
i Les points 46 et 149 ainsi que les notes en bas de page 39, 48, 54, 73 et 82 du présent texte ont fait l’objet d’une modification d’ordre typographique, postérieurement à sa première mise en ligne.