# C_2010328EN.01005002.xml

| 4.12.2010 | EN | Official Journal of the European Union | C 328/50 |
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Action brought on 14 October 2010 — Gas Natural Fenosa SDG v Commission

(Case T-484/10)

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2010/C 328/79

Language of the case: Spanish

Parties

Applicant: Gas Natural Fenosa SDG, SA (Madrid, Spain) (represented by: F. González Díaz and F. Salerno, lawyers)

Defendant: European Commission

Form of order sought

| — | Annul, under Article 263 TFEU, the Decision of the European Commission of 29 September 2010; |
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| — | order the Commission to pay the costs. |
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Pleas in law and main arguments

The Decision challenged in these proceedings approves the Spanish legislation designed to pay compensation in respect of the additional costs borne by those electricity producers who, as a result of a public-service obligation, must ensure that a part of their production uses domestic coal.

Gas Natural Fenosa submits that the Decision is contrary to Community law and accordingly seeks its annulment on the basis of the following pleas:

| 1. | First, the Decision infringes Article 108(2) TFEU and Article 4(4) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty,( 1 ) inasmuch as the disputed aid raises doubts as to its compatibility with the common market. |
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| 2. | Second, the Decision infringes a number of provisions of primary and secondary law and the aid cannot therefore be regarded as compatible with the common market, namely:
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Community legislation concerning the environment, specifically Article 4 TEU and Article 191 TFEU and the rules implementing environmental obligations and, in particular, Directive 2003/87/EC, as recently amended by Directive 2009/29/EC,( 2 ) in that the contested measure promotes the operation of installations which increase the level of gas emissions into the atmosphere, is in breach of the prohibition on allocating new free emission allowances and promotes mining activities which represent a serious threat to the natural environment. —
The Treaty rules concerning the internal market, specifically Articles 34 and 49 TFEU, since the measure impedes and renders more financially onerous the importation of electricity generated from coal other than Spanish coal and of gas as well as the plans for expanding the capacity for generating electricity from gas and/or imported coal. —
Articles 101 and 102 TFEU in conjunction with Article 4(3) TEU, in that the measure promotes anti-competitive conduct on the part of producers of Spanish coal. —
Article 126(1) TFEU, given that the contested measure entails an unnecessary and disproportionate increase in public costs. —
Regulation (EC) No 1407/2002,( 3 ) in that the contested measure authorises an increase in the volume of aid already granted by previous measures and causes a distortion in the market for the production of electric power. | — | Community legislation concerning the environment, specifically Article 4 TEU and Article 191 TFEU and the rules implementing environmental obligations and, in particular, Directive 2003/87/EC, as recently amended by Directive 2009/29/EC,( 2 ) in that the contested measure promotes the operation of installations which increase the level of gas emissions into the atmosphere, is in breach of the prohibition on allocating new free emission allowances and promotes mining activities which represent a serious threat to the natural environment. | — | The Treaty rules concerning the internal market, specifically Articles 34 and 49 TFEU, since the measure impedes and renders more financially onerous the importation of electricity generated from coal other than Spanish coal and of gas as well as the plans for expanding the capacity for generating electricity from gas and/or imported coal. | — | Articles 101 and 102 TFEU in conjunction with Article 4(3) TEU, in that the measure promotes anti-competitive conduct on the part of producers of Spanish coal. | — | Article 126(1) TFEU, given that the contested measure entails an unnecessary and disproportionate increase in public costs. | — | Regulation (EC) No 1407/2002,( 3 ) in that the contested measure authorises an increase in the volume of aid already granted by previous measures and causes a distortion in the market for the production of electric power. |
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| — | Community legislation concerning the environment, specifically Article 4 TEU and Article 191 TFEU and the rules implementing environmental obligations and, in particular, Directive 2003/87/EC, as recently amended by Directive 2009/29/EC,( 2 ) in that the contested measure promotes the operation of installations which increase the level of gas emissions into the atmosphere, is in breach of the prohibition on allocating new free emission allowances and promotes mining activities which represent a serious threat to the natural environment. | | | | | | | | | | |
| — | The Treaty rules concerning the internal market, specifically Articles 34 and 49 TFEU, since the measure impedes and renders more financially onerous the importation of electricity generated from coal other than Spanish coal and of gas as well as the plans for expanding the capacity for generating electricity from gas and/or imported coal. | | | | | | | | | | |
| — | Articles 101 and 102 TFEU in conjunction with Article 4(3) TEU, in that the measure promotes anti-competitive conduct on the part of producers of Spanish coal. | | | | | | | | | | |
| — | Article 126(1) TFEU, given that the contested measure entails an unnecessary and disproportionate increase in public costs. | | | | | | | | | | |
| — | Regulation (EC) No 1407/2002,( 3 ) in that the contested measure authorises an increase in the volume of aid already granted by previous measures and causes a distortion in the market for the production of electric power. | | | | | | | | | | |

| 3. | Third, the Decision infringes Articles 3(2) and 11(4) of the Second Electricity Market Directive (Directive 2003/54/EC)( 4 ) and Article 106(2) TFEU as well as the Community framework for state aid in the form of public service compensation and the principle of proportionality, since (i) the conditions laid down by those provisions for the establishment of a service of general economic interest for reasons of security of supply are not met and (ii) in any event, there are other less costly ways of achieving the objectives pursued by the contested measure. |
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( 1 )  OJ 1999 L 83, p. 1.

( 2 )  Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (OJ 2009 L 140, p. 63).

( 3 )  Council Regulation (EC) No 1407/2002 of 23 July 2002 on State aid to the coal industry (OJ 2002 L 205, p. 1).

( 4 )  Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (OJ 2003 L 176, p. 37).

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