Case T-183/07

Republic of Poland

v

Commission of the European Communities

(Environment – Directive 2003/87/EC – Emissions trading system for greenhouse gas allowances – National allocation plan for emission allowances for Poland for the period from 2008 to 2012 – Three month time-limit – Respective powers of the Member States and the Commission – Equal treatment – Duty to state reasons – Article 9(1) and (3) and Article 11(2) of Directive 2003/87)

Summary of the Judgment

1.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Art. 9(3))

2.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Art. 9(3))

3.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Art. 9(3))

4.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Arts 9(1) and (3), and 11(2))

5.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87)

6.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Art. 9(3))

7.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Arts 9(3) and 11(2))

8.      Environment – Atmospheric pollution – Directive 2003/87 – National allocation plan for the allocation of greenhouse gas emission allowances (NAP)

(European Parliament and Council Directive 2003/87, Arts 9, 10 and 11(2) and (3))

1.      The Commission’s power to consider and reject a national allocation plan for greenhouse gas emission allowances (NAP), notified by a Member State, in accordance with Article 9(3) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, is severely limited, both in substantive terms and in time. First, the Commission’s review is limited to considering whether the NAP is compatible with the criteria laid down in Annex III to the directive and the provisions of Article 10 thereof and, second, the review must be carried out within three months of the date on which the Member State notified the NAP.

As regards the limits in time, Article 9(3) of the directive makes provision for only one three-month period during which the Commission must state its position on the NAP. There is no reason to suppose that, where an incomplete NAP is notified, the three-month period which the Commission has to reject an NAP cannot start to run. A Member State cannot, by notifying an incomplete NAP, indefinitely postpone the Commission’s taking a decision pursuant to Article 9(3) of the directive.

(see paras 35-36)

2.      In the absence of a general power of authorisation stricto sensu on the part of the Commission in relation to a national allocation plan for greenhouse gas emission allowances (NAP) notified, the absence of objections on its part at the expiry of the three-month period, in accordance with Article 9(3) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, cannot form the basis of any presumption of authorisation of the NAP.

Indeed, a prior review under Article 9(3) does not necessarily lead to an authorising decision. The Commission may not intervene except in so far as it considers it necessary to raise objections to certain aspects of the NAP as notified and, if the Member State refuses to amend its NAP, to adopt a decision rejecting the plan. If that does not happen, the NAP as notified becomes definitive and enjoys a presumption of legality which permits the Member State to put it into effect.

(see paras 41-42)

3.      The Commission may intervene before the expiry of the three-month period, in accordance with Article 9(3) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, not only, initially, by raising objections or putting questions with regard to certain aspects of the national allocation plan for greenhouse gas emission allowances (NAP) notified, but also, subsequently, in the event of refusal by the Member State to amend its NAP, by adopting a decision to reject the NAP notified. Where the adoption of a rejection decision has the effect of interrupting the running of the three-month period, where the Commission raises objections or puts questions concerning certain aspects of the NAP notified, the three-month period is suspended.

(see para. 43)

4.      Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, for the purposes of implementing that system, determines clearly and explicitly, in Article 9(1) and (3) and in Article 11(2), the allocation of powers between the Member States and the Commission for the drawing-up, review and implementation of national allocation plans for greenhouse gas emission allowances (NAPs).

Regarding the powers of the Member States, it follows unequivocally from the said provisions that only Member States have the power, at the initial stage, to draw up an NAP stating the total quantity of allowances which they propose to allocate for the period concerned and the manner in which they propose to allocate them, and, subsequently, to decide the total quantity of allowances which they will allocate for each five-year period and to launch the process for individually allocating those allowances. It is true that, by virtue of the second sentence of Article 9(1) of that directive, the exercise of those exclusive powers of the Member States must be based on objective and transparent criteria such as those listed in Annex III to that directive. Similarly, in accordance with the second sentence of Article 9(3) of the directive, where the Commission decides to reject an NAP in whole or in part, the Member State does not take a decision under Article 11(2) of that directive unless the amendments which it proposes have been accepted by the Commission.

However, Directive 2003/87 does not prescribe clearly and precisely the form and means for achieving the result which it fixes. Moreover, Member States thus have a certain margin for manoeuvre in transposing that directive, and, therefore, in choosing the measures which they consider most appropriate to achieve, in the specific context of the national energy market, the objective laid down by that directive.

(see paras 84-88)

5.      In the context of the implementation of the scheme for greenhouse gas emission allowance trading within the Community, established by Directive 2003/87, to allow the Commission to use a single method of assessing national allocation plans for the allocation of greenhouse gas emission allowances (NAPs) for all the Member States would amount to acknowledging it as having not only a veritable power of uniformisation in the context of implementing the allowance trading system, but also a central role in the drawing-up of NAPs. Neither such a power of uniformisation nor such a central role were conferred on the Commission by the legislature in the directive, in the context of its power of reviewing NAPs.

In that respect, the application of the principle of equal treatment between the Member States cannot have the effect of modifying the allocation of powers between the Member States and the Commission, as provided for by Directive 2003/87, in accordance with the principle of subsidiarity which is deemed to have been complied with for the adoption of the latter.

(see paras 104, 106)

6.      A decision concerning a national allocation plan for the allocation of greenhouse gas emission allowances (NAP), adopted by the Commission pursuant to Article 9(3) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, finding infringement of several criteria in Annex III of that directive, in circumstances where the Commission limited itself to substituting its own data for those contained in the NAP, without in any way reviewing the compatibility of the latter with the criteria set out in the directive does not comply with the allocation of powers between the Member States and the Commission as defined by the directive.

The method of reviewing NAPs used by the Commission, consisting of comparing the data in the NAP with the data obtained from its own assessment method, amounts, in practice, to allowing the Commission itself to draw up its own reference NAP in a totally autonomous manner, and to assess the compatibility of the notified NAPs not having regard to the criteria set out in the directive but, first and foremost, having regard to the data and results obtained from its own method.

(see paras 107-108, 110)

7.      Public consultation, as provided for in Article 11(2) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, before the adoption of a final decision on the basis of that same provision, would be rendered devoid of purpose and the observations of the public would be purely theoretical if modifications of a national allocation plan for the allocation of greenhouse gas emission allowances (NAP), capable of being proposed after a decision by the Commission taken pursuant to Article 9(3) of the said directive, were limited to those envisaged by the Commission.

Member States may, without necessarily being bound by the recommendations formulated by the Commission in a decision taken in accordance with the said Article 9(3), not only correct and update their NAPs after such a decision, but also adjust them after the adoption of their individual allocation decision.

Moreover, in the light both of the wording of the directive and the general system and objectives of the system which it establishes, the Commission is required permanently to ensure that the NAPs take account of the most exact and thus the most up-to-date information possible in order to cause the least damage to economic development and employment, while at the same time maintaining an efficient system of greenhouse gas emission allowances.

(see paras 116-118)

8.      By laying down, in the operative part of a decision concerning a national allocation plan for the allocation of greenhouse gas emission allowances (NAP), in accordance with Article 9(3) of Directive 2003/87, establishing a scheme for greenhouse gas emission allowance trading within the Community, a maximum level for the total quantity of allowances to be allocated, above which ceiling the NAP would be regarded as incompatible with the directive, the Commission exceeds the powers conferred upon it by virtue of the said provisions.

In accordance with Article 11(2) and (3) of the same directive, it is for each Member State, and not the Commission, to decide, on the basis of its NAP drawn up pursuant to Article 9 and in accordance with Article 10 of the said directive, on the total quantity of allowances it will allocate for the period in question, to initiate the process of allocation of those allowances to the operators of each installation, and to rule on allocation of those allowances.

(see paras 123, 126, 131)