Judgment;Summary — ECLI:EU:C:2020:983
Date: 2020-12-03
Language of the case: German
Court formation: Fifth Chamber
Subject matter: Environment;Pollution
Procedure: Reference for a preliminary ruling
Origin: Germany

Translation  C-320/19 — 1 
Case C-320/19 
Request for a preliminary ruling 
Date lodged: 
19 April 2019 
Referring court: 
Verwaltungsgericht Berlin (Germany) 
Date of the decision to refer: 
1 April 2019 
Applicant: 
Ingredion Germany GmbH 
Defendant: 
Bundesrepublik Deutschland 
  
VG 10 K 771.17 
VERWALTUNGSGERICHT BERLIN 
(ADMINISTRATIVE COURT, BERLIN) 
ORDER 
In the administrative-law case 
Ingredion Germany GmbH, 
[...] Hamburg, 
Applicant, 
[...] 
v 
Bundesrepublik Deutschland 
EN 
REQUEST FOR A PRELIMINARY RULING OF 1. 4. 2019 — CASE C-320/19 
 
2  
(Federal Republic of Germany), 
represented by the Umweltbundesamt (Federal Environment Agency) 
[...], 
Defendant, 
the 10th Chamber of the Verwaltungsgericht Berlin 
[...] 
made the following order on 1 April 2019: 
The proceedings before the Verwaltungsgericht Berlin are stayed. 
The following question is referred to the Court of Justice of the European Union 
for a preliminary ruling pursuant to Article 267 TFEU: [Or. 2] 
Are Article 18(1)(c) and the second subparagraph of Article 18(2) of European 
Commission Decision 2011/278/EU, in conjunction with Article 3(h) and 
Article 10a of Directive 2003/87/EC, to be interpreted as meaning that, for new 
entrants, the capacity utilisation factor relevant for the fuel-related activity level is 
limited to a value of less than 100%? 
Grounds 
I. The applicant operates an installation for the production of starch products 
in Hamburg. The installation includes a newly constructed air heating installation 
and steam generator. The installation’s overall rated thermal input is now 30.045 
Megawatts. Steam and natural gas are used in the installation to generate heat for 
the production of starch. 
On 8 August 2014 the applicant requested the Deutsche Emissionshandelsstelle 
(German Emissions Trading Authority; ‘the DEHSt’) to allocate free emission 
allowances for the new installation, specifically, first, an allocation according to 
the heat benchmark, CL risk, and, second, according to the fuel benchmark, CL 
risk. The regular operation of the installation began on 15 August 2013. For the 
fuel benchmark, the DEHSt initially assumed a relevant capacity utilisation factor 
of 109%, in accordance with the applicant’s indications. The initial installed 
capacity was determined by way of the production volumes within 90 days of the 
beginning of regular operation at a time when the installation had not yet reached 
the intended production capacity. The actual capacity utilisation in the 
measurement period from 15 August 2013 to 20 June 2014 for that reason 
exceeded 100% of the initial installed capacity. 
By decision of 1 September 2015, the DEHSt allocated to the applicant 124 908 
free emission allowances for the allocation period from 2013 to 2020. As 
reasoning, it was stated that the DEHSt had initially reported the allocation 
INGREDION GERMANY 
 
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amount to the European Commission (EU Commission) on the basis of the 
relevant capacity utilisation factor of 109%. By decision of 24 March 2015 — 
C(2015) 1733 final — the EU Commission had rejected a relevant capacity 
utilisation factor of 100% or more in respect of three other German installations. 
Accordingly, the DEHSt had henceforth assumed a capacity utilisation factor of 
99.9%. The EU Commission had agreed to the allocation amount calculated in this 
manner. The opposition filed against this on 30 September 2015 was rejected by 
the [Or. 3] DEHSt by opposition decision of 7 July 2017, served on 10 July 2017. 
As reasoning, the defendant cited, in addition to the EU Commission’s decision of 
24 March 2015, Guidance Document No 2 and the document ‘Frequently Asked 
Questions on New Entrants & Closures Applications’, which, while not legally 
binding, constitute an interpretation aid for the Member States. 
By its action brought on 9 August 2017, the applicant is pursuing its request. By 
revocation decision of 28 January 2019, the DEHSt revoked the decision of 
1 September 2015 in so far as the allocation exceeded 116 088 emission 
allowances. As grounds it stated that, by letter of 16 April 2018, the applicant had 
disclosed that the allocation request with regard to the allocation element with a 
fuel benchmark had contained a calculation error. The applicant accordingly 
adapted its claim on 20 January 2019 and no longer seeks 8 273, but merely 7 467 
additional emission allowances. 
The applicant is of the opinion that the provisions of Paragraph 17(2) of the 
Zuteilungsverordnung (Allocation Regulation; ZuV) 2020 and of the second 
subparagraph of Article 18(2) of Decision 2011/278/EU that are decisive for the 
calculation of the relevant capacity utilisation factor for new installations do not 
provide for any limitation of the capacity utilisation factor to a value below 100%. 
The wording of those provisions, which forms the boundary of interpretation, does 
not, it submits, state anything in this regard. The legal view taken by the EU 
Commission is not, in its view, justified by standpoints of the equal treatment of 
incumbent and new installations. The EU Commission’s decision of 24 March 
2015 has neither a direct nor an indirect binding effect on the applicant. Guidance 
Document No 2 and the ‘Frequently Asked Questions’ are also not legally 
binding. 
The applicant requests that: 
the defendant, with partial amendment of the decision of the Deutsche 
Emissionshandelsstelle of 1 September 2015 in the form of its opposition 
decision [Or. 4] [of] 7 July 2017 and its revocation decision of 29 January 
2019, be obliged to allocate to the applicant a further 7 467 emission 
allowances, in so far as this is not refused by the European Commission, 
in the alternative, 
the defendant, with partial amendment of the decision of the Deutsche 
Emissionshandelsstelle of 1 September 2015 in the form of its opposition 
REQUEST FOR A PRELIMINARY RULING OF 1. 4. 2019 — CASE C-320/19 
 
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decision [of] 7 July 2017 and its revocation decision of 29 January 2019, be 
obliged to decide on the applicant’s request of 8 August 2014 in the form of 
the calculations of 16 April 2018, having regard for the court’s legal 
opinion, with the proviso that, for the allocation element of fuel benchmark, 
CL risk, a relevant capacity utilisation factor of 109% is used as a basis. 
The defendant requests that: 
the action be dismissed. 
It is of the view that the relevant capacity utilisation factor of 109% requested by 
the applicant is not permissible. When interpreting Paragraph 17(2) ZuV 2020, 
which transposes the second subparagraph of Article 18(2) of Decision 
2011/278/EU, it is to be assumed that a value of 100% should not be reached or 
exceeded. This view taken by the EU Commission, which is explained in more 
detail in the grounds for the decision of 24 March 2015, follows from the 
requirement of equal treatment of incumbent installations and new installations 
and of new installations with a product benchmark which use the standard 
capacity utilisation factor. 
II. The relevant provisions of EU law are contained in 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 Union and 
amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32; the Emissions 
Trading Directive in the currently applicable version), in particular in Article 3(h) 
and Article 10a(7) of the Emissions Trading Directive and in European 
Commission Decision 2011/278/EU 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, in particular in Article 3(d) and (n) and in 
Articles 17 to 19. 
The relevant provisions of national law are contained in Paragraph 9 of the Gesetz 
über den Handel mit Berechtigungen zur Emission von Treibhausgasen (Law on 
greenhouse gas emission allowance trading; TEHG 2011) of 27 July 2011 (BGBl. 
[Federal Law Gazette] I p. 3154) in conjunction with Paragraph 34 TEHG in the 
version of 18 January 2019, and in the Verordnung über die Zuteilung von 
Treibhausgas-Emissionsberechtigungen in der Handelsperiode 2013 bis 2020 
(Regulation on the allocation of greenhouse gas emission allowances in the 
trading period 2013 to 2020; ZuV 2020) of 26 September 2011, in particular in 
Paragraph 2.2, 2.10 and 2.27 and in Paragraphs 16 to 18: [Or. 5] 
Paragraph 34 TEHG of 18 January 2019 
(1) 1In respect of the release of greenhouse gases through activities within the 
meaning of Annex 1, Paragraphs 1 to 36 in the version applicable until the end of 
24 January 2019 are still to be applied in relation to the trading period from 2013 
to 2020. 
INGREDION GERMANY 
 
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Paragraph 9 TEHG 2011 
(1) Installation operators shall receive an allocation of free allowances in 
accordance with the principles laid down in Article 10a(1) to (5), (7) and (11) to 
(20) of Directive 2003/87/EC in the respectively applicable version and in 
Commission Decision 2011/278/EU 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 (OJ 2011 L 130, p. 1). 
ZuV 2020: 
Paragraph 2 Definitions 
In addition to the definitions in Paragraph 3 of the Greenhouse Gas Emission 
Trading Law, the following definitions shall apply to the present regulation: 
2. Start of regular operation 
the first day of a continuous 90-day period or, in the case where the common 
production cycle in the sector concerned does not provide for continuous 
production, the first day of a 90-day period split into sector-specific production 
cycles, during which the installation operates at an average of at least 40% of the 
production capacity for which it is designed, taking into account, where 
appropriate, the installation-specific operating conditions; 
10. New installations 
all new entrants pursuant to the first indent of Article 3(h) of Directive 
2003/87/EC; 
27. Allocation element with fuel benchmark [Or. 6] 
Combination of input flows, output flows and related emissions not covered by an 
allocation element under number 28 or number 30 for cases of the production of 
non-measurable heat by fuel combustion, in so far as the non-measurable heat 
(a) is consumed for the production of products, for the production of mechanical 
energy, for heating or for cooling or 
(b) is produced by safety flares, in so far as the associated combustion of pilot 
fuels and highly variable amounts of process or residual gases is provided for 
under regulatory law for exclusive installation relief in the case of operational 
disruption or other unusual operational states; 
excluded herefrom in each case is non-measurable heat which is consumed for 
power generation or exported for power generation; 
Paragraph 16 Application for free allocation of allowances 
REQUEST FOR A PRELIMINARY RULING OF 1. 4. 2019 — CASE C-320/19 
 
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(1) Applications for free allocation for new entrants are to be made within a 
year of the start of the regular operation of the installation, and, in the case of 
significant capacity extensions, within a year of the start of the amended 
operation. 
(4) The initial installed capacity for new installations shall correspond for each 
allocation element, in a departure from Paragraph 4, to the average of the two 
highest monthly production volumes within the continuous 90-day period on the 
basis of which the start of regular operation is determined, projected for a calendar 
year. 
Paragraph 17 Activity levels of new entrants 
(1) In respect of the allocation elements of new installations to be determined 
under Paragraph 3, the activity levels relevant to the allocation of allowances shall 
be determined as follows: 
3. the fuel-related activity level for an allocation element with fuel benchmark 
shall correspond to the initial installed capacity of the allocation element 
concerned multiplied by the relevant capacity utilisation factor 
(2) The relevant capacity utilisation factor pursuant to subparagraph 1 numbers 
2 to 4 shall be determined on the basis of the applicant’s indications regarding 
[Or. 7] 
1. the actual operation of the allocation element prior to the application and the 
intended operation of the installation or the allocation element, their intended 
maintenance periods and production cycles, 
2. the use of energy- and greenhouse gas-efficient technologies which may 
influence the relevant capacity utilisation factor of the installation, 
3. the typical capacity utilisation within the sectors concerned. 
Paragraph 18 Allocation for new entrants 
(1) In respect of the allocation of allowances for new installations, the 
competent authority shall calculate the preliminary annual number of allowances 
to be allocated free of charge as of the start of regular operation of the installation 
for the remaining years of the trading period from 2013 to 2020 as follows and 
separately for each allocation element: 
3. for each allocation element with fuel benchmark, the preliminary annual 
number of allowances to be allocated free of charge shall correspond to the 
product of the fuel benchmark and the fuel-related activity level: 
III. The question referred is material to the decision. 
INGREDION GERMANY 
 
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The applicant is entitled to an additional allocation of free emission allowances if 
the calculation is to be based on a relevant capacity utilisation factor of 109%. The 
interpretation of the relevant provision in the second subparagraph of 
Article 18(2) of Decision 2011/278/EU, which is to be used for an EU-law 
compliant interpretation of Paragraph 17(2) ZuV 2020, is not clear and 
unambiguous in this respect. 
On the one hand, the wording does not contain any limitation of the relevant 
capacity utilisation factor to below 100%. A higher capacity utilisation factor 
emerges in the present case on the basis of duly substantiated and independently 
verified information not merely on the intended normal operation, but also on the 
actual normal operation of the installation prior to the application. Unlike in the 
case of incumbent installations, the determination of the initial installed capacity 
in the case of new entrants takes account of a 90-day period after the start of 
normal operation (see Article 17(4) of Decision 2011/278/EU) and not of a period 
of four years (see Article 7(3)(a) of Decision 2011/278/EU), which means that it 
may more frequently be the case that the intended normal operation is not yet 
achieved. [Or. 8] 
On the other hand, the second subparagraph of Article 18(2) of Decision 
2011/278/EU also refers to the typical capacity utilisation in the sector concerned, 
which should regularly be below 100%. In the case of new entrants with product 
benchmark sub-installations, account is also taken of a standard capacity 
utilisation factor (see Article 18(1)(a) of Decision 2011/278/EU), which has been 
fixed in Commission Decision 2013/447/EU and in no case reaches 100%. The 
free allocation of allowances pursuant to Article 10a of Directive 2003/87/EC is a 
temporary departure from the principle of the auctioning of allowances, which 
argues in favour of a restrictive interpretation of the corresponding provisions (see 
the Opinion of the Advocate General of 28 February 2019 in Case C-682/17, 
point 69). 
Ultimately, the question arises as to what extent the EU Commission is to be 
granted a wide scope when interpreting the provisions adopted by it for the 
purpose of ensuring uniform implementation in the Member States and whether 
the boundary of interpretation is exceeded here. 
[...] 
[Signatures] 
[...]