Opinion of the Advocate General — ECLI:EU:C:2021:776
Date: 2021-09-30
Language of the case: Polish
Subject matter: Taxation
Procedure: Action for failure to fulfil obligations - unfounded
Origin: Poland

summary of the pleas in law on which the application is based, and that statement must be sufficiently clear and precise to enable the defendant to prepare his or her defence and for the Court to rule on the application. 62. It is therefore necessary for the essential points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself(35) and for the heads of claim to be set out unambiguously so that the Court does not rule ultra petita or indeed fail to rule on an objection. (36) In the present case, since the Commission based its application on the single complaint of infringement, namely, that ‘tradable permit schemes’ for the purposes of Article 17(1)(b) and (4) of Directive 2003/96 only cover voluntary schemes that achieve environmental objectives or energy savings beyond those reached by mandatory EU schemes, it is appropriate solely to examine that ground of complaint. It is not for the Court to give a ruling that goes beyond the grounds for complaint and form of order sought in the Commission’s application under Article 258 TFEU. (37) 63. As the Commission’s contentions do not support a finding that the Republic of Poland has not fulfilled its obligations under Article 17 of Directive 2003/96, I find myself accordingly obliged to conclude that the Commission has not established its case. VII. Costs 64. Article 138(1) of the Rules of Procedure of the Court of Justice provides that 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 Republic of Poland has applied for the costs to be awarded against the Commission and as the Commission has been ultimately unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Republic of Poland. VIII. Conclusion 65. In view of the above considerations, I propose that the Court should: First, dismiss the action. Second, order the Commission to pay the costs. 1 Original language: English. 2 Directive restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51). 3 See, inter alia, recitals 2, 3 and 4 of Directive 2003/96. 4 See also, for environmental objectives in general, inter alia, recitals 6, 7, 11, 12. See also, judgment of 7 March 2018, Cristal Union (C‑31/17, EU:C:2018:168, paragraph 34). 5 Dz. Ustaw RP (Journal of Laws of the Republic of Poland) 2014, item 752, as amended. 6 In its version as amended by the law of 21 October 2016 amending the Polish Law on Excise Duty, which entered into force on 1 July 2017. 7 This provision has been added by the law of 27 September 2013 amending the Polish Law on Excise Duty, which entered into force on 1 November 2013. 8 In its version of the law of 21 October 2016 amending the Polish Law on Excise Duty, which came into force on 1 July 2017. 9 Directive 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). 10 See the first paragraph of Article 1 of Directive 2003/87. 11 Council Directive restructuring the Community framework for the taxation of energy products and electricity, Common Guidelines, Council document 13253/03 ADD1. 12 See recital 7 of Directive 2003/87. 13 Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme post-2012 (OJ 2012 C 158, p. 4). 14 Decision C(2019) 6371 final of the Commission regarding Compensation for indirect emission costs in Poland. Decision not to raise objections published in OJ 2019 C 354, p. 1. 15 Poland had introduced a mechanism according to which when applying for compensation under the scheme an undertaking had to declare that it resigned from support under the Polish Law on Excise Duty, notified the relevant entity thereof (an electricity supplier or the settlement body) and reimbursed any support previously received under that law (and indeed any other acts), see ibid., at paragraph 27. 16 COM(2011) 169 final. Withdrawal of Commission proposal, OJ 2015 C 80, p. 17. 17 Such a clarification is also contained in the second paragraph of Article 18(b) of the Commission’s latest Proposal for a Council Directive restructuring the Union framework for the taxation of energy products and electricity, of 14 July 2021 (COM(2021) 563 final). 18 Ibid. See, also, recital 22 of the proposal, the last sentence of which provides: ‘Furthermore, it should be made clear that references to tradable permit schemes in Article 17 of Directive 2003/96/EC do not include the Union scheme under Directive 2003/87/EC.’ 19 C‑504/09 P, EU:C:2012:178, paragraph 77. 20 Judgments of 19 May 2011, Commission v Malta (C‑376/09, EU:C:2011:320, paragraph 32 and the case-law cited), and of 14 January 2021, Commission v Italy (Contribution towards the purchase of motor fuel) (C‑63/19, EU:C:2021:18) paragraph 74). 21 See to that effect, inter alia, judgments of 24 June 2004, Commission v Netherlands (C‑350/02, EU:C:2004:389, paragraph 20), of 29 April 2010, Commission v Germany (C‑160/08, EU:C:2010:230, paragraph 43) and of judgment 4 September 2014, Commission v France (C‑237/12, EU:C:2014:2152, paragraph 74). 22 See Article 10a(6) and Article 10b of Directive 2003/87 in its versions as amended by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814, OJ 2018 L 76, p. 3. 23 See reference in recital 28 of Directive 2003/96. 24 Some commentators interpret Article 17(1) of Directive 2003/96 as containing conditions that aim to be applied to paragraphs 2 and 3 of that provision (see Deloitte, Technical and legal aspects of Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity, p. 204). Others interpret Article 17(2) and (3) of Directive 2003/96 as exceptions to the requirement that minimum levels of taxation prescribed in the directive have to be respected on average for each business. This, however, requires that the conditions set out in paragraph 4 of that provision are fulfilled. For the difference in approaches by different Member States to that requirement, see ibid., at pp. 205 and 206. Given that the question of whether ‘the minimum levels of taxation prescribed … are respected on average for each business’ is not at issue in these proceedings, one may assume that the Commission as well as the Polish Government follow this second interpretation. 25 The Commission does not argue that the Polish Law on Excise Duty’s definition of ‘energy-intensive business’ is outside the parameters set in Article 17(1)(a) of Directive 2003/96. 26 As can be inferred from Article 30 of Directive 2003/87 as amended by Directive 2018/410 (for the determination of sectors considered to be at a risk of carbon leakage prior to that change, see Commission Decision of 24 December 2009 determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage (OJ 2010 L 1, p. 10)), the notions of energy-intensive as defined in Article 17(1)(a) of Directive 2003/96 and that of being ‘at risk of carbon leakage’ according to Article 10b of Directive 2003/87 are not identical, although many businesses will in fact be covered by both. 27 Emphasis added. Article 17(4) of Directive 2003/96 requires that a tradable permit scheme must lead to the achievement of environmental objectives or increased energy efficiency, broadly equivalent to what would have been achieved if the standard Community minimum rates had been observed. The wording ‘must lead to’ conveys a clear obligation. The notion of ‘broadly equivalent’ does not seem to be used very often in legislative acts of the EU, although there are some instances. It has, however, not been scrutinised in any detail by the Court. In its judgment of 16 January 2014, Commission v Spain (C‑67/12, EU:C:2014:5, paragraph 72), the Court dealt with Article 8(b) of Directive 2002/91 which states that ‘[t]he overall impact of this approach should be broadly equivalent to that arising from the provisions set out in (a)….’. The Court objected to the transposition, inter alia, because it did not consider the imposition of an obligation to maintenance companies rather than to independent experts as ‘broadly equivalent’. This at least indicates that the Court is willing to consider such criteria in detail. 28 Directive 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). 29 Neither is there a rule, however, that a double burden or indeed a double taxation is to be avoided, as argued by the Republic of Poland. Rather, the Court has already found that Directive 2003/96 does not exclude all risk of double taxation. Even in the area of the mandatory exception according to Article 14 of Directive 2003/96, Member States may, in accordance with the second sentence of Article 14(1)(a) of the directive, tax ‘electricity products and electricity used to produce electricity’ if that is done for reasons of environmental policy. See, to that effect, judgments of 4 June 2015, Kernkraftwerke Lippe-Ems (C‑5/14, EU:C:2015:354, paragraph 51), and of 7 March 2018, Cristal Union (C‑31/17, EU:C:2018:168, paragraphs 32). 30 In French ‘acceptent les accords ou les régimes de permis négociables ou les mesures équivalentes’, in Spanish ‘suscribirán los acuerdos, regímenes de permisos negociables o medidas equivalentes’, in Dutch ‘gaan overeenkomsten, regelingen inzake verhandelbare vergunningen of gelĳkwaardige regelingen aan’, in Italian ‘sottoscrivono gli accordi, i regimi concernenti diritti commercializzabili o le misure equivalenti’. Different however in German ‘gelten die … genannten Vereinbarungen, Regelungen über handelsfähige Zertifikate oder gleichwertigen Regelungen’, Portuguese ‘devem ser partes nos acordos, regimes de autorização negociáveis ou convénios equivalentes’, and Swedish ‘genomföra de system för handel med utsläppsrätter eller likvärdiga arrangemang’. 31 Judgment of 20 June 2019 (C‑682/17, EU:C:2019:518). 32 Judgment of 20 June 2019, ExxonMobil Production Deutschland (C‑682/17, EU:C:2019:518, paragraph 47 and case-law cited). 33 See the German, Portuguese and Swedish versions in footnote 30. 34 In English ‘where tradable permit schemes or equivalent arrangements are implemented’, in French ‘des régimes de permis négociables ou des mesures équivalentes sont mises en œuvre’, in Spanish ‘se apliquen regímenes de permisos negociables o medidas equivalentes’, in Portuguese ‘sejam … aplicados regimes de autorização negociáveis ou convénios equivalentes’, in Dutch ‘regelingen inzake verhandelbare vergunningen of gelĳkwaardige regelingen worden toegepast’, in German ‘es werden Regelungen über handelsfähige Zertifikate oder gleichwertige Regelungen umgesetzt’, in Italian ‘attuati regimi concernenti diritti commercializzabili o misure equivalenti’, and in Swedish ‘eller när system för handel med utsläppsrätter eller likvärdiga arrangemang har genomförts’. 35 And indeed as early as at the time of the Commission’s reasoned opinion. 36 Judgment of 28 October 2010, Commission v Malta (C‑508/08, EU:C:2010:643, paragraph 16). 37 See to that effect, judgments of 15 June 2006, Commission v France (C‑255/04, EU:C:2006:401, paragraph 24); of 11 January 2007, Commission v Greece (C‑251/04, EU:C:2007:5, paragraph 27); and of 28 October 2010, Commission v Malta (C‑508/08, EU:C:2010:643, paragraph 16).