ORDER OF THE COURT OF FIRST INSTANCE (First Chamber)
25 June 2007 (*)
(Application for annulment – Environment – Directive 2003/87/EC – Scheme for greenhouse gas emission allowance trading – Proposed amendment to national allocation plan – Refusal by the Commission – Inadmissibility)
In Case T-130/06,
Drax Power Ltd, established in Selby (United Kingdom),
Great Yarmouth Power Ltd, established in Swindon (United Kingdom),
International Power plc, established in London (United Kingdom),
Npower Cogen Ltd, established in Swindon,
RWE Npower plc, established in Swindon,
ScottishPower Generation Ltd, established in Glasgow (United Kingdom),
Scottish and Southern Energy plc, established in Perth (United Kingdom),
represented by I. Glick, QC, and M. Cook, Barrister,
applicants,
v
Commission of the European Communities, represented by U. Wölker and X. Lewis, acting as Agents,
defendant,
APPLICATION for annulment of Commission Decision C(2006) 426 final of 22 February 2006 concerning the proposed amendment to the national allocation plan for the allocation of greenhouse gas emission allowances notified by the United Kingdom in accordance with Directive 2003/87/EC of the European Parliament and of the Council,
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (First Chamber),
composed of J.D. Cooke, President, R. García-Valdecasas and V. Ciucă, Judges,
Registrar: E. Coulon,
makes the following
Order
Legal framework
1 Article 1 of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32) (‘the Directive’) provides:
‘This Directive establishes a scheme for greenhouse gas emission allowance trading within the Community … in order to promote reductions of greenhouse gas emissions in a cost-effective and economically efficient manner.’
2 Article 9(1) of the Directive provides that each Member State is to develop, for each period referred to in Article 11 of the Directive, a national plan stating the total quantity of allowances that it intends to allocate for that period and how it proposes to allocate them (‘the NAP’). For the three-year period beginning on 1 January 2005, the national plan had to be published and notified to the Commission and to the other Member States by 31 March 2004 at the latest.
3 Article 9(3) of the Directive reads as follows:
‘Within three months of notification of a [NAP] by a Member State under paragraph 1, the Commission may reject that [NAP], or any aspect thereof, on the basis that it is incompatible with the criteria listed in Annex III or with Article 10. The Member State shall only take a decision under Article 11(1) or (2) if proposed amendments are accepted by the Commission. Reasons shall be given for any rejection decision by the Commission.’
4 According to Article 11(1) of the Directive:
‘For the three-year period beginning 1 January 2005, each Member State shall decide upon the total quantity of allowances it will allocate for that period and the allocation of those allowances to the operator of each installation. This decision shall be taken at least three months before the beginning of the period and be based on its [NAP] developed pursuant to Article 9 and in accordance with Article 10, taking due account of comments from the public.’
5 The criteria listed in paragraph 10 of Annex III to the Directive reads as follows:
‘The [NAP] shall contain a list of the installations covered by this Directive with the quantities of allowances intended to be allocated to each.’
Facts
6 On 30 April 2004, following public consultation and the publication of a draft NAP, the United Kingdom of Great Britain and Northern Ireland (‘the United Kingdom’) notified a NAP to the Commission, expressly stating it was provisional (‘the original NAP’). According to paragraph 1.13 of that plan:
‘[T]he total quantity of allowances to be issued to EU ETS [European Union emissions trading scheme] installations for 2005 to 2007 will be 736 [million tonnes of carbon dioxide]. This figure is subject to further revision in the light of ongoing work.’
7 On 7 July 2004, the Commission adopted Decision C(2004) 2515/4 final concerning the original NAP notified by the United Kingdom in accordance with the Directive (‘the Decision of 7 July 2004’). In that decision, the Commission identified certain elements of the original NAP which were incompatible with the Directive. The Commission indicated that no objections would be raised to the original NAP provided that certain amendments were notified to the Commission by 30 September 2004 at the latest. Article 3 of the Decision of 7 July 2004 reads as follows:
‘Article 3
1. The total quantity of allowances to be allocated by the United Kingdom according to its [original NAP] to installations listed therein and to new entrants, taking into account amendments referred to in Article 2, shall not be exceeded.
2. The [original NAP] may be amended without prior acceptance by the Commission if the amendment consists in modifications of the allocation of allowances to individual installations within the total quantity resulting from improvements to data quality.
3. Any amendments to the [original NAP] other than those referred to in paragraph 2 of this Article and in Article 2 shall be notified to the Commission and accepted in accordance with Article 9(3) of [the Directive].
…’
8 By letter of 30 September 2004, the United Kingdom gave the Commission the reasons why it was not able to meet the deadline set in Article 2 of the Decision of 7 July 2004.
9 By letter of 10 November 2004, the United Kingdom notified the Commission that it wished to amend its original NAP to take account of the results of the work identified therein. The United Kingdom proposed, in particular, to increase the total quantity of allowances to 756.1 million tonnes of carbon dioxide (‘Mt CO2’).
10 On 14 February 2005, the United Kingdom authorities published a press release which reads as follows:
‘The Government today published a revised list of installation level allocations for the EU emissions trading scheme.
The Government announced last October that it would be proposing an amendment to the [original NAP] to set the total number of allowances at 756 Mt CO2. …
The Government is now announcing how these 756 Mt CO2 would be allocated at installation level in line with the proposed amendment submitted to the European Commission. Discussions with the Commission are continuing as the Government believes that the proposed amendment to the [original] NAP is compatible with the requirements of the [relevant] legislation. …
To provide as much regulatory certainty to industry as possible, the Government has confirmed that any allocation below 756 Mt CO2 would be achieved by reducing the number of allowances given to the electricity generation sector. …’
11 On 18 February 2005, the United Kingdom modified for the last time its proposed amendment to the original NAP.
12 On 12 April 2005, the Commission adopted Decision C(2005) 1081 final concerning the proposed amendment to the original NAP notified by the United Kingdom in accordance with the Directive (‘the Decision of 12 April 2005’). In that decision, the Commission concluded that, in accordance with Article 9(3) of the Directive, the United Kingdom was only entitled to amend its original NAP in order to address the incompatibilities identified in the decision of 7 July 2004 and that Article 3(1) of that decision excludes any increases in the total quantity of allowances to be allocated (fourth to ninth recitals).
13 By application lodged at the Registry of the Court of First Instance on 5 May 2005, the United Kingdom brought an action seeking the annulment of the Decision of 12 April 2005.
14 In May 2005, the United Kingdom decided to allocate 736.3 Mt CO2 on the basis of its original NAP. It emerges from the ‘EU Emissions Trading Scheme – Approved National Allocation Plan 2005-2007’ published by the United Kingdom authorities in May 2005 that ‘subject to and without prejudice to its legal challenge against the Commission, the United Kingdom has determined that 736.3 Mt CO2 will initially be allocated during Phase I of the [EU emissions trading scheme]’.
15 By judgment of 23 November 2005, the Court of First Instance annulled the decision of 12 April 2005 (Case T-178/05 United Kingdom v Commission [2005] ECR II-4807).
16 On 22 February 2006, the Commission adopted Decision C(2006) 426 final concerning the proposed amendment to the original NAP notified by the United Kingdom in accordance with the Directive (‘the contested decision’). In that decision, the Commission rejected the United Kingdom’s proposed amendment for a second time and based this rejection on the fact that this proposal was submitted late, that is to say after the 30 September 2004 deadline laid down by Article 11(1) of the Directive. Thus, according to Article 1 of the contested decision:
‘The proposed amendment to the [original NAP] notified by the United Kingdom to the Commission on 10 November 2004 and last updated on 18 February 2005 implying an increase of the emission allowance allocations by 19.8 [million tonnes of carbon dioxide equivalent] is inadmissible.’
17 On 28 April 2006, the United Kingdom announced in a joint statement of the Department for Environment, Food and Rural Affairs and the Department of Trade and Industry, that it had decided not to pursue further court action against the Commission to procure consideration of its proposed amendment to the original NAP and that it would leave that NAP unchanged.
Procedure and forms of order sought by the parties
18 By application lodged at the Registry of the Court of First Instance on 3 May 2006, the applicants introduced the present action. By a separate document lodged on the same day, they requested that the action be decided under an expedited procedure in accordance with Article 76a of the Rules of Procedure of the Court of First Instance. On 19 May 2006, the Commission lodged its observations regarding that request.
19 By decision of 6 June 2006, the Court (First Chamber) rejected the request for expedited procedure.
20 By separate document lodged at the Registry of the Court on 29 June 2006, the Commission applied pursuant to Article 114(1) of the Rules of Procedure for a decision as to the admissibility of the present case. On 18 September 2006, the applicants submitted observations on that objection as to admissibility.
21 On 10 November 2006, the Court invited the United Kingdom to respond to certain written questions under Article 24 of the Statute of the Court of Justice, applicable to the Court of First Instance by virtue of the first paragraph of Article 53. By letter lodged at the Registry of the Court on 18 January 2007, the United Kingdom complied with this request.
22 On 13 February 2007, the Court invited the applicants to submit their observations on the replies of the United Kingdom and in particular regarding their interest in seeking annulment of the contested decision. By letter lodged at the Registry on 26 February 2007, the applicants complied with that request.
23 The applicants claim that the Court should:
– dismiss the objection as to the admissibility;
– annul the contested decision; and
– order the Commission to pay the costs.
24 In its objection as to the admissibility of this case, the Commission claims that the Court should:
– dismiss the application as inadmissible;
– order the applicants to pay the costs.
Law
25 Under Article 114(1) of its Rules of Procedure, the Court of First Instance may give a decision on admissibility, without going to the substance of the case, where a party has made an application to that effect. Under Article 114(3), unless the Court decides otherwise, the remainder of the proceedings is to be oral. In the present case, the Court considers that the information in the documents before it is sufficient and that there is no need to proceed to the oral stage of the proceedings.
Arguments of the parties
26 The Commission submits that the present case is inadmissible on the basis that the contested decision, which is addressed to the United Kingdom, is not of direct and individual concern to the applicants.
27 First, with regard to direct concern, the Commission submits that the applicants cannot be directly concerned by the contested decision because it deals with the admissibility of the proposed amendment to the original NAP and not with its substance. Therefore, the contested decision is one step further removed from any effects which may be felt by the applicants.
28 Furthermore, the decision to allocate allowances to the operators is a decision taken by the Member States alone and is not one which is taken by the Commission. Contrary to the position which arose in the judgment of 13 June 2006 in Case T‑192/03 Atlantean v Commission (not published in the ECR) and in Joined Cases T-218/03 to T-240/03 Boyle and Others v Commission [2006] ECR II-1669 the Commission is not the authority which is empowered to increase allowances for any given operator. Article 11 of the Directive does not authorise the Commission to decide on individual allocations and instead gives this power to the Member States alone.
29 The Commission adds that the Member States enjoy a margin of discretion in the manner in which they decide to allocate the total quantity of allowances and that they are not bound to allocate the individual allowances exactly as indicated in the NAP notified to the Commission in accordance with Article 9 of the Directive. In particular, the United Kingdom could have granted extra allowances to the applicants within the framework of the notified NAP (for example by allocating part of the new entrants’ reserve), provided it did not exceed the total quantity of 736 Mt CO2, being the figure arrived at before the requested amendment.
30 Second, the Commission maintains that the applicants are not individually concerned by the contested decision. They are not in a position similar to that of the addressee of the contested decision, being the United Kingdom in the present case, and they are not identified by it. Furthermore, they are members of a category of operators that is so broad that it cannot be considered as a closed class of operators affected by the contested decision and the applicants have not demonstrated that anything distinguishes them from other operators affected by the emissions trading scheme. The Commission adds that the situation of the individual applicants was not and could not have been examined by the Commission during the course of the adoption of the contested decision.
31 The applicants claim that they are directly and individually concerned by the contested decision.
32 First, the applicants are directly concerned because, as a result of the contested decision, the existing members of the UK electricity generation sector (including the applicants) have received 19.8 Mt CO2 fewer allowances during the three-year period from 2005 to 2007 than would have been allocated to them if the Commission had accepted the proposed amendment. Thus, the contested decision directly and definitively precludes the applicants from being allocated additional allowances (Atlantean v Commission and Boyle and Others v Commission, cited in point 28 above).
33 The applicants submit in that regard that even if it is the Member States who allocate the allowances to operators, they must do so in accordance with the NAP and do not enjoy any margin of discretion in the allocation of emission allowances to the different operators. Thus, if the proposed amendment had been approved, the United Kingdom would have allocated the additional 19.8 Mt CO2 of allowances to the members of the United Kingdom electricity generation sector (including the applicants) and would have allocated the extra allowances to the applicants as indicated in Annex 2 to the application because it would have been obliged to do so in accordance with the amended NAP.
34 The applicants add that if the proposed amendment had been approved by the Commission, they would, in the absence of improved emissions data, have received precisely the quantities indicated in the annex to the proposed amendment. If better emissions data became available, the applicants would have benefited from allowances determined in accordance with the principles laid down in the proposed amendment applied to that improved data. Based on the actual allocations ultimately made by the United Kingdom Government, any variation from the individual allocations set out in the proposed amendment would have been negligible.
35 According to the applicants, the United Kingdom was obliged to follow the original NAP unless the Commission approved amendments to that plan. They only amendment that the United Kingdom Government sought approval for was the proposed amendment rejected by the Commission in the contested decision. Even if the United Kingdom had the power to request the approval of further amendments, it is clear that it had no intention of doing so and did, as a matter of fact, intend to allocate allowances based on the NAP as modified by the proposed amendment. Therefore the second criteria of direct concern is met because ‘the possibility for the addressee not to give effect to the Community measure is purely theoretical and their intention to act in conformity with it is not in doubt’.
36 With regard to the Commission’s argument that the contested decision only relates to the admissibility and not the substance of the amendment at issue (see point 27 above), the applicants reply that this effectively goes to the causal link between the contested decision and their legal situation. It is not contested that the effect of the contested decision was to prevent the United Kingdom from allocating allowances in accordance with the proposed amendment and thus prevented it from allocating the 19.8 Mt CO2 of supplementary allowances dealt with by that proposed amendment. Given that those additional allowances would, in accordance with the terms of the proposed amendment (presuming it was approved), have been allocated to the United Kingdom electricity generation sector, the contested decision clearly had an effect on the applicants and is therefore of direct concern to them, unless the proposed amendment would have been rejected in any event. However, the Commission could not legally reject the proposed amendment on the substance. In particular, even through the proposed amendment leads to an increase in the number of allowances to be allocated, the total number of allowances proposed is still consistent with the United Kingdom over-achieving its carbon dioxide reduction obligations under the Kyoto protocol and the European Burden Sharing Agreement.
37 With regard to the supposed margin of discretion of the Member States with regard to the allocation of quotas (see paragraph 29 above), the applicants invoke United Kingdom v Commission, cited in paragraph 15 above. It follows from that judgment that the Member States must respect the NAP when allocating allowances and that their only discretion is to request authorisation from the Commission to amend the NAP. The applicants stress in that regard that it is only if an amendment has been approved by the Commission that the Member State can follow that amendment instead of the initial NAP.
38 Contrary to what the Commission submits, the Member States do not enjoy a margin of discretion in terms of the manner in which they decide to allocate the total quantity of allowances between individual operators. Pursuant to Articles 9 and 11 of the Directive, the NAP must state how the Member State proposes to allocate the allowances and, once the NAP has been accepted by the Commission, the Member State must allocate the allowances in accordance with the NAP, unless an amendment has been approved.
39 The existence of the public consultation process referred to in Article 11(1) of the Directive does not show that the Member States enjoy a margin of discretion in the allocation of allowances. According to the applicants, the public consultation exercise may result in improved emissions data and, if so, the Member State will mechanically apply the allocation principles laid down in the NAP to that data without exercising any discretion. Moreover, as set out in the United Kingdom v Commission, cited in paragraph 15 above, the public consultation may indicate a need for amendment to the NAP but, unless amendments are approved, the Member State must follow the NAP.
40 The applicants contest the argument of the Commission that the United Kingdom could have allocated part of the new entrant reserve to the electricity generation sector (see paragraph 29 above). They observed that, in accordance with the original NAP, all sectors, with the exception of the United Kingdom electricity generation sector, would receive allowances based on their projected emissions, with the power station sector bearing any shortfall in allowances. As a result of the improved emissions data, the reserve was no longer necessary and the United Kingdom had to allocate those allowances to sectors other than the United Kingdom electricity generation sector.
41 Second, the applicants maintain that they are individually concerned by the contested decision. Contrary to what the Commission submits (see paragraph 30 above), it is not necessary for the applicants to be individually identified by the contested decision for that decision to be of individual concern to them. Furthermore, the installations affected by that decision can be identified from the proposed amendment itself. In terms of the consequences of the decision for each installation, they are purely mechanical in that each installation would receive a proportionate share of the 19.8 Mt CO2 of additional allowances.
42 According to the applicants, they are members of a very limited class of operators, namely existing members of the United Kingdom electricity generation sector, with the members of this closed class being expressly identified in the proposed amendment. As a result of this feature, the applicants are affected by the contested decision in a different manner from all the other operators which are affected by the emissions trading scheme.
43 The Commission is mistaken in arguing that the applicants belong to a very broad category of operators. Even if the Directive applies to more than 10 000 operators of installations, the applicants are not challenging the directive but rather the contested decision which relates to the proposed amendment to the original NAP. The effect of that contested decision, by reducing the total quantity of allowances issued by 19.8 Mt CO2, is to reduce the allowances allocated to the existing United Kingdom electricity generation installations collectively by the same amount and individually by their proportionate share of this amount. Therefore, the contested decision only affects a very small group of operators, namely existing United Kingdom electricity generation operators. It is as members of that closed and limited group that the applicants are individually concerned by the contested decision.
44 The applicants add that it is not necessary for the Commission to have considered the situation of individual applicants in order for them to be individually concerned by the contested decision, given the effect that the decision has upon them.
Findings of the Court
45 In accordance with the fourth paragraph of Article 230 EC, ‘[a]ny natural or physical person may … institute proceedings … against a decision which, although … addressed to another person, is of direct and individual concern to the former’.
46 Given that the contested decision was addressed to the United Kingdom, the Court will examine whether the applicants are directly concerned by that decision.
47 In that regard, it is necessary to recall the two cumulative criteria, identified in settled case-law, for direct concern within the meaning of the fourth paragraph of Article 230 EC.
48 First, the measure at issue must directly affect the legal situation of the person concerned. Second, that measure must leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules (Case C-386/96 P Dreyfus v Commission [1998] ECR I-2309, paragraph 43; Case T‑69/99 DSTV v Commission [2000] ECR II-4309, paragraph 24. The condition required by the second criterion is also satisfied where the possibility for addressees not to give effect to the Community measure is purely theoretical and their intention to act in conformity with it is not in doubt (Dreyfus v Commission, paragraph 44; see also, to that effect, Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207, paragraphs 8 to 10).
49 It is next necessary to examine the roles and powers allocated to the Commission and the Member States respectively under the Directive, particularly those in Articles 9 to 11.
50 The essential purpose of the Directive is to put in place, as from 1 January 2005, a scheme for greenhouse gas emission allowance trading within the Community. This system is based upon NAPs developed by the Member States in accordance with the criteria laid down by the Directive. Each Member State was required to develop a first NAP for the three-year period beginning 1 January 2005. This NAP was to be published and notified to the Commission and to the other Member States by 31 March 2004 at the latest in accordance with Article 9(1) of the Directive. The NAP was required to state the total quantity of allowances which the Member State ‘intends to allocate for that period and how it proposes to allocate them’ (see paragraph 2 above and United Kingdom v Commission, cited in point 15 above, point 52).
51 Pursuant to Article 9(3) of the Directive, the Commission is empowered to reject a NAP, either in whole or in part, within three months of its notification (see paragraph 3 above). This provision stipulates that any such rejection is to be based on the NAP’s incompatibility with the criteria of Annex III to or with Article 10 of the Directive. It is to be noted that no other ground for rejection of a NAP is provided for in the Directive. As stated by the Court at paragraph 55 of its judgment United Kingdom v Commission, cited in paragraph 15 above, Article 9(3) does not expressly require the adoption of a positive decision of approval of a notified NAP. If the Commission does not react to the NAP within the time period laid down by that provision, the NAP is presumed to be compatible with the criteria of Annex III or with Article 10 of the Directive.
52 The definitive decision as to the total quantity of allowances to be allocated and the allocation of those allowances to the installations in question must be taken by each Member State under Article 11(1) of the Directive and on the basis of the NAPs developed pursuant to Article 9 of the Directive (United Kingdom v Commission, cited in paragraph 15 above, paragraph 53).
53 The Court therefore considers that it follows both from the wording of the Directive, and from the objectives of the system which it establishes, that it is the decision of the national authorities taken pursuant to Article 11(1) of the Directive which affects the legal situation of the operators by allocating allowances to them.
54 In the present case, following the decision of the Commission of 7 July 2004 taken in accordance with Article 9(3) of the Directive (see paragraph 7 above), the United Kingdom proposed an amendment of its original NAP to the Commission and in particular proposed to increase the total quantity of allowances from 736.3 to 756.1 Mt CO2. It is clear from the proposed amendment to the original NAP that the United Kingdom expressed the intention to allocate this additional amount of 19.8 Mt CO2 to the United Kingdom electricity generation sector to which the applicants belong.
55 On 12 April 2005, the Commission rejected the proposed amendment as inadmissible (see paragraph 12 above). Pending the judgment of the Court on the action which the United Kingdom had introduced against that decision of 12 April 2005, the United Kingdom decided to allocate a total quantity of allowances of 736.3 Mt CO2 (see paragraph 14 above). The United Kingdom thereby allocated allowances to the relevant installations, including for those of the applicants, on the basis of the original NAP.
56 After the decision of 12 April 2005 was annulled by the judgment in United Kingdom v Commission, cited in paragraph 15 above, the Commission adopted the contested decision rejecting for a second time the proposed amendment of the original NAP (see paragraph 16 above). It follows that on the eve of the adoption by the Commission of the contested decision, the legal situation of the applicants as operators concerned by the original NAP was that of operators who had in fact received specific quantities of allowances as indicated by the original NAP (see paragraph 14 above). However, the contested decision had no effect on the legal situation of the applicants in that regard. They remained the owners of the allowances which had been allocated to them by the decision of the United Kingdom taken during the month of May 2005 pursuant to Article 11(1) of the Directive.
57 It is worth stressing in that regard that the contested decision rejects as inadmissible the proposed amendment of the original NAP solely because it was notified late. Thus, the contested decision does not examine the amendments proposed by the United Kingdom on their merits. In particular, the Commission did not rule on the United Kingdom’s proposal to allocate the 19.8 Mt CO2 of additional allowances to the electricity generation sector let alone on the allocation of allowances to individual operators. Thus the adoption by the Commission of the contested decision was not preceded by any examination, even indirect, of the applicants’ situation.
58 It follows that the contested decision does not alter the applicants’ legal situation and that it therefore may not be considered as directly affecting their legal position within the meaning of the first criteria laid down by the jurisprudence (see paragraph 48 above).
59 It is true that the contested decision and the decision of the United Kingdom not to challenge it in the Community courts (see paragraph 17 above) effectively put an end to any possibility that the applicants would receive the additional allowances as envisaged by the proposed amendment to the original NAP. However, that possibility was based only on the United Kingdom’s declared intention in that regard and can not be considered as a vested right of the applicants. Contrary to what the applicants submit (see paragraph 43 above), the contested decision did not reduce the total quantity of allowances granted by the United Kingdom by 19.8 Mt CO2. Furthermore, in order to show that they are directly affected by the contested decision, the applicants are not entitled to rely on future and hypothetical situations which cannot be used as a basis to establish that the contested decision directly affects their legal situation.
60 It is necessary to emphasise that under the system established by the Directive, which is based on the Member States allocating the allowances to the installations in question (see paragraph 52 above), the direct and definitive determination of the rights and obligations of the operators of those installations can only result from a decision of the Member State adopted pursuant to Article 11(1) of the Directive. Therefore, the contested decision did not in any way have the effect of depriving the applicants of specific rights which had vested at the time of its adoption and thus did not result in any change to the applicants’ rights or to their legal situation.
61 Again, contrary to the applicants’ submission (see paragraph 33 above), a Member State which proposes to modify its NAP is not under any obligation to implement that amendment in cases where the Commission does not reject it under Article 9(3) of the Directive. Indeed, a Member State is always entitled to modify its position with regard to the allocation of allowances by notifying a new proposed amendment of the NAP to the Commission (United Kingdom v Commission, cited in paragraph 15 above, paragraph 61). Moreover it follows from Article 9(1) of the Directive that a NAP should state the total quantity of allowances that the Member State ‘intends’ to allocate for the period in question and how ‘it proposes’ to allocate them (see paragraph 2 above). It follows that a proposed amendment to a NAP may not be seen as definitively fixing the position of the Member State. Also where, as in the present case, the Commission has already taken a decision on the NAP under Article 9(3) of the Directive, it cannot be ruled out that the subsequent approval by the Commission of the amendments would be subject to conditions which the Member State finds unacceptable. In such a case, nothing prevents the Member State from abandoning its proposed amendment and giving effect to its initial NAP. Thus, the final implementation of a NAP always depends upon the adoption of a decision by the national authorities.
62 It should also be noted in that regard that Article 176 EC provides that measures such as the Directive, which was adopted under Article 175 EC, shall not prevent any Member State from maintaining or introducing more stringent protective measures provided that such measures are compatible with the Treaty and are notified to the Commission.
63 Given that the main purpose of the system established by the Directive is to reduce greenhouse gas emissions (see Article 1 and recitals 1 to 5 to the Directive), the Member State always remains free to make do with a lesser allocation of allowances, provided that such an allocation respects the conditions laid down by the Directive. It is worth mentioning that the United Kingdom had expressly indicated its commitment to greenhouse gas emission allowance trading, as well as combating climate change in general, and to act as an example for other Member States (see United Kingdom v Commission, cited in paragraph 15 above, paragraph 37 and the press statement of 14 February 2005). Thus, it always had the option for reasons linked to its environmental policy to accept an allocation of 736.3 Mt CO2 as proposed in the original NAP.
64 The fact that a decision of the United Kingdom was indispensable in the present circumstances regardless of the Commission’s decision is further illustrated by two aspects of the present case.
65 First, even though the United Kingdom announced in its press release of 14 February 2005 that it intended allocating additional allowances to the electricity generation sector, it also stated that the list of allocations to individual installations was provisional and that it gave only ‘an- indication of the number of allowances individual installations will be issued with following the Final Allocation Decision’.
66 Furthermore, the United Kingdom accepted in that press release that its proposed amendment would not necessarily be accepted in its entirety by the Commission. The United Kingdom indicated that ‘any allocation below 756 [Mt CO2] would be achieved by reducing the number of allowances given to the electricity generation sector’. It therefore appears that the United Kingdom had anticipated that the Commission could reject, at least in part, its proposal to increase the allocation of allowances by 19.8 Mt CO2 and had envisaged the adoption, in such an eventuality, of a decision allocating a lesser amount of allowances than that proposed to the Commission. In those circumstances, it was necessary for the United Kingdom to adopt a decision laying down the details of the allocations.
67 Second, and in any case, even though the issue of direct concern must be assessed in light of the nature and content of the attacked act as adopted by the defendant institution, the definitive character of the Member State’s decision under Article 11(1) of the Directive is further illustrated by what happened in the present case. As mentioned at paragraph 17 above, the United Kingdom announced its intention not to challenge the contested decision even though ‘the proposed amendment notified to the Commission is compatible with the relevant Community legislation’. The United Kingdom thus decided to continue to implement its original NAP which provided for a total allocation of 736.3 Mt CO2 and allocations as approved by the Commission in its decision of 7 July 2004. But the option of reverting to the original NAP was always open irrespective of the decision of the Commission on the proposed amendment of the original NAP. It follows that even if the Commission had not rejected that proposal as inadmissible and even if it had accepted the proposal on the merits, any direct effect on the legal situation of the applicants was still dependent on the adoption by the Member State of a decision taken under Article 11(1) of the Directive which either implemented the modified NAP, including any conditions laid down by the Commission, or gave effect to the original NAP.
68 It follows from all the foregoing that the legal situation of the applicants at the date of the contested decision was that of operators holding specific allocations of allowances for the period from 2005 to 2007 on the basis of the original NAP. The contested decision did not alter that position.
69 Accordingly, the applicants may not be considered to be directly concerned by the contested decision in the sense of the fourth paragraph of Article 230 EC and, as a result, the action must be rejected as inadmissible without it being necessary to rule on the other grounds of inadmissibility raised by the Commission.
Costs
70 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicants have been unsuccessful, they must be ordered to pay the costs borne by the Commission in accordance with the form of order sought by the latter.
On those grounds,
THE COURT OF FIRST INSTANCE (First Chamber)
hereby orders:
1. The application is dismissed as inadmissible.
2. The applicants are to bear their own costs and pay those incurred by the Commission.
Luxembourg, 25 June 2007.