Action brought on 21 July 2011 - Eurofer v Commission

(Case T-381/11)

Language of the case: German

Parties

Applicant: Europäischer Wirtschaftsverband der Eisen- und Stahlindustrie (Eurofer) ASBL (Luxembourg, Luxembourg) (represented by: S. Altenschmidt and C. Dittrich, lawyers)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

annul the Commission's Decision of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (C(2011) 2772, OJ 2011 L 130, p. 1),

order the Commission to pay the costs of the proceedings.

Pleas in law and main arguments

The applicant is challenging the Commission's Decision of 27 April 2011 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council. ² It claims that that decision should be annulled in its entirety.

In support of the action, the applicant relies on five pleas in law.

First plea in law, alleging infringement of the product benchmark for hot metal, in breach of Article 10a of Directive 2003/87/EC 

The applicant claims that the requirements for product benchmarks laid down in Annex I to the contested decision are illegal.

The applicant claims that the determination of the product benchmark for hot metal infringes Article 10a of Directive 2003/87, since the Commission failed to take account of the full carbon content which is emitted during the production of iron and steel by including their use for the production of electricity, but applied a reduction of approximately 25%. It follows from the wording of the second sentence of the third paragraph of Article 10a(1) of Directive 2003/87, the scheme as well as the objective and the historical interpretation of the Directive that the Commission is not entitled to apply such reductions.

Second plea in law, alleging infringement of the obligation to state reasons laid down in the second paragraph of Article 296 TFEU

The applicant further claims that the Commission failed to provide a sufficient statement of reasons for its decision. The reasoning on the determination of the benchmarks is defective. Moreover, the Commission's reservations with regard to possible distortions of competition were not properly reasoned. This amounts to an infringement of the second paragraph of Article 296 TFEU.

Third plea in law, alleging breach of the principle of proportionality

The contested decision also infringes the principle of proportionality as regards the determination of the product benchmark for hot metal.

Fourth plea in law, alleging breach of the principle of equal treatment

In addition, the applicant alleges breach of the principle of equal treatment.

Fifth plea in law, alleging that it is necessary to annul the contested decision in its entirety

The applicant is of the view that the contested decision should be annulled in its entirety, since annulment limited exclusively to the benchmark for hot metal would automatically lead to application of a fall-back method for the allocation of free allowances pursuant to Article 10(2)(b) in conjunction with Article 3(c) of the contested decision. This would place the applicant in an even worse position than if the Commission's incorrect benchmark values for hot metal were applied.

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¹ - OJ 2011 L 130, p. 1.

² - 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).