Judgment;Abstract — ECLI:EU:C:2021:959
Date: 2021-11-25
Language of the case: German
Court formation: Fifth Chamber
Subject matter: Environment;Pollution
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary C-271/20 — 1 
Case C-271/20 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
19 June 2020 
Referring court: 
Verwaltungsgericht Berlin (Germany) 
Date of the decision to refer: 
11 June 2020 
Applicant: 
Aurubis AG 
Defendant: 
Federal Republic of Germany 
  
Subject matter of the main proceedings 
Objection to an allocation decision of the German Emissions Trading 
Authority — Allocation element with a fuel emission value — Allocation element 
with process emissions 
Subject matter and legal basis of the reference 
Interpretation of EU law; Article 267 TFEU 
Questions referred 
1. Are the requirements of Article 3(d) of Commission Decision 2011/278/EU 
for a free allocation of emission allowances on the basis of a sub-installation 
with a fuel emission value fulfilled where, in an installation for the 
production of non-ferrous metals in accordance with Annex I to Directive 
2003/87/EC, a sulphur-containing copper concentrate is used in a flash 
smelting furnace to produce primary copper and the non-measurable heat 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-271/20 
 
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required to melt the copper ore contained in the concentrate is produced 
essentially through oxidation of the sulphur contained in the concentrate, 
meaning that the copper concentrate is used both as a source of raw material 
and as a combustible material to generate heat? 
2. If the answer to Question 1 is in the affirmative: 
Can entitlements to a further free allocation of emission allowances for the 
third trading period be met after the end of the third trading period with 
entitlements for the fourth trading period where the existence of the 
allowance entitlement is established by a court only after expiry of the third 
trading period, or do allowance entitlements that have not yet been met lapse 
on expiry of the third trading period? 
Provisions of EU law cited 
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), as amended by Directive 2009/29/EC of the European 
Parliament and of the Council of 23 April 2009 (OJ 2009 L 140, p. 63), as 
amended by Decision (EU) 2015/1814 of the European Parliament and of the 
Council of 6 October 2015 (OJ 2015 L 264, p. 1), as last amended by Directive 
2018/410 of the European Parliament and of the Council of 14 March 2018 (OJ 
2018 L 76, p. 3), Article 3(t) 
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), Article 3(d) and (h) 
Provisions of national law cited 
Gesetz über den Handel mit Berechtigungen zur Emission von Treibhausgasen 
(Law on greenhouse gas emission allowance trading, ‘the TEHG 2011’) of 27 July 
2011, Paragraph 9(1) and (6), Annex I, Part 2, point 1 
Verordnung über die Zuteilung von Treibhausgas-Emissionsberechtigungen in der 
Handelsperiode 2013 bis 2020 (Regulation on the allocation of greenhouse gas 
emissions allowances in the 2013 to 2020 trading period, ‘the ZuV 2020’) in the 
version of 26 September 2011, Paragraph 2, point 27 (allocation element with a 
fuel emission value), and point 29 (allocation element with process emissions), 
Paragraph 3 
AURUBIS 
 
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Brief summary of the facts and procedure 
1 The applicant operates an EU-ETS installation in Hamburg for the manufacture of 
non-ferrous raw metals and produces copper. The installation comprises two sub-
installations, the Rohhüttenwerk Nord (RWN) and the Rohhüttenwerk Ost 
(RWO). 
2 The RWO is a primary smelting works, in which primary copper is obtained from 
ore by smelting copper concentrate in a flash smelting furnace (with downstream 
process steps). This is a flash smelting process. 
3 By decision of 17 February 2014, the DEHSt allocated the applicant a total of 
2 596 999 free emission allowances for the years 2013 to 2020 further to its 
application of 20 January 2012. On 14 March 2014, the applicant lodged an 
objection. By decision on the objection of 3 April 2018, the DEHSt revoked the 
allocation decision in part, in so far as the allocation exceeds 1 784 398 emission 
allowances. It gave as its reason that the copper concentrate used in an allocation 
element with a fuel emission value cannot be taken into account and must be 
allocated to an allocation element with process emissions. Following recalculation 
of the allowance entitlement, the DEHSt revoked 523 027 allowances. 
4 The applicant contested the decision on the objection by an action lodged on 
30 April 2018, inasmuch as part of the original allocation was revoked. 
Principal arguments of the parties to the main proceedings 
5 The applicant contends that it is entitled to an allocation of an additional 
1 154 794 emission allowances. 
6 It argues that it is entitled to an allocation based on the fuel emission value in 
accordance with Paragraph 2, point 27, of the ZuV 2020 or Article 3(d) of 
Decision 2011/278 for the heat generated from the combustion of the sulphur 
contained in the copper concentrate. 
7 It further argues that the copper concentrate which it uses for the flash smelting 
process comprises copper and iron sulphides (30% each copper, iron and sulphur); 
that the concentrate also contains traces of carbon and other metals; and that the 
copper minerals used are chalcopyrite (CuFeS2), copper(I) sulfide (Cu2S), 
copper(II) sulfide (CuS) and bornite (Cu5FeS4), alongside pyrite (FeS2). 
8 It submits that SO2, but no CO2, is generated in the steps of the flash smelting 
process described by it in detail and that small quantities of CO2 would be 
generated from oxidation of the minimal quantities of carbon introduced; that the 
copper concentrates used contained carbon in a proportion of approximately 0.7% 
by mass and that carbon dioxide emissions would be generated from that 
proportion of carbon as a result of the oxidation process in the flash smelting 
furnace; that this is a climate-friendly manufacturing method; that other copper 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-271/20 
 
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producers rely on the use of additional carbon-containing fuels; and that it used 
additional heavy fuel oil in its installation until 2008, after which it optimised its 
production process in terms of greenhouse gas emissions. 
9 It explains that the heat generated in the RWO sub-installation is generated from 
the combustion of fuels; that combustion is the chemical reaction of a substance 
with oxygen or some other oxidation agent; that, under EU law, ‘combustion’ is 
defined in Article 3(t) of Directive 2003/87 as any oxidation of fuels; that, 
according to the judgment of the Court of 20 June 2019, ExxonMobil Production 
Deutschland, С-682/17, EU:C:2019:518, paragraph 53, ‘combustion’ is not 
reduced to oxidation reactions which generate CO2; and that oxidation of iron and 
sulphur in the flash smelting furnace takes place in a highly exothermic reaction. 
10 It submits that the sulphur combusted in the flash smelting furnace is also a fuel, 
as it is a combustible material that releases heat during combustion; that the 
chalcopyrite contained in the copper concentrate has a high calorific value; and 
that it does not follow from the wording of Article 3(d) of Decision 2011/278 that 
a material can only be classified as a fuel if heat generation is the primary 
objective or that it must be a standard fuel such as coal, crude oil or natural gas. 
11 The applicant argues that the term ‘fuel’ is a generic term that has to be 
interpreted broadly and is intended to encompass all combustible materials, and 
that Article 3, point 24, of Directive 2010/75/EU on industrial emissions defines 
fuel as any solid, liquid or gaseous combustible material. 
12 It contends that the copper and sulphur in the copper concentrate should be 
regarded as a raw material and fuel respectively; that, of itself, the combustion of 
the sulphur in the flash smelting furnace serves primarily to generate heat; that the 
primary copper cannot be extracted without the very intensive heat generated in 
the flash smelting furnace to smelt the ore through the combustion of the sulphur 
contained in the copper concentrate; and that its installation can only be operated 
using the sulphur contained in the copper concentrate as a fuel. 
13 The applicant refers with regard to the question of the hierarchy of the allocation 
elements to the fact that the defendant has always relied on a hierarchical 
relationship between the three fall-back methods. In the applicant’s opinion, the 
requirements for an allocation element with a fuel emission value are fulfilled and, 
for that reason alone, the allocation on the basis of the (secondary) process 
emissions argued by the defendant is out of the question. 
14 In the alternative, the applicant argues that the criteria for an allocation element 
with process emissions are not fulfilled. It contends that there is no chemical 
reduction of metal compounds in the process of relevance here. 
15 The defendant is of the opinion that the copper concentrate used by the applicant 
does not qualify for any allocation based on a fuel emission value and that a sub-
installation with a fuel emission value only exists where the primary purpose of its 
AURUBIS 
 
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use is to generate heat, whereas the primary purpose of the applicant’s installation 
is to produce copper.  
16 It argues that the copper concentrate is a raw material, as the primary purpose of 
the production process is to produce copper; that, moreover, the copper 
concentrate is not fully combusted, which is a requirement when calculating the 
fuel emission value. 
17 It submits that a fuel within the meaning of the fuel emission value is a fuel that 
could be replaced by another fuel, including natural gas, and that the fuel emission 
value is not a catch-all criterion. 
18 The defendant therefore takes the view that the requirements for an allocation 
element with process emissions are fulfilled in this case. 
19 It explains that metal compounds are chemically reduced in the installation, 
including in the flash smelting furnace; that the copper is reduced by reducing the 
chalcopyrite to copper sulphide, which in turn is reduced to copper. In the 
alternative, it argues that impurities from metal compounds are removed and 
carbon-containing raw materials are used, the primary purpose of which is not 
heat generation, and that that process results in CO2 emissions. 
20 It claims that the requirements for an allocation element with a fuel emission 
value are not fulfilled, meaning that the hierarchy of the allocation elements is 
irrelevant, and that a distinction is drawn between a heat/fuel emission value, on 
the one hand, and an allocation element with process emissions, on the other, 
based on the primary purpose of the input material and the industrial process 
which, as stated previously, is the manufacture of copper. 
Brief summary of the basis for the reference 
First question  
21 If the first question is answered in the affirmative and the copper concentrate or 
the sulphur contained in it are classed as a fuel, the applicant would be entitled to 
a further free allocation of emission allowances and the contested decision on the 
objection would be unlawful. 
22 The referring court is of the opinion that the judgment delivered on 20 June 2019 
in ExxonMobil Deutschland clarified that Article 3(t) of Directive 2003/87 does 
not reduce the concept of ‘combustion’ to oxidation reactions which themselves 
generate a greenhouse gas. At paragraph 57 of that judgment, it was also held that 
the activity of combustion of fuels is also carried out by an installation for the 
purpose of natural gas desulphurisation and sulphur recovery under the Claus 
process. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-271/20 
 
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23 It is not clear if that also applies to the fuel emission value where free allowances 
are allocated or whether that requires a narrower definition of fuel. 
24 Free allocations are intended to mitigate hardship caused by the full tax liability. 
That purpose is suggested by the fact that free allowances are to be allocated for 
the generation of non-measurable heat by such fuels, the combustion of which, as 
with natural gas, necessarily results in the release of CO2 or other greenhouse 
gases. In the applicant’s flash smelting furnace, on the other hand, only a very 
small quantity of CO2 (0.026 t CO2/t copper concentrate) is released as a result of 
oxidation of the carbon traces in the copper concentrate. 
25 Furthermore, there is as yet no clarification as to whether an allocation based on 
the fuel benchmark, alongside the criteria of fuel combustion and the generation 
of non-measurable heat for the purposes listed in the provision, also depends on 
heat generation being the primary purpose of the combustion of the fuel.  
26 What is peculiar about this case is that the copper concentrate used is both the raw 
material and the combustible material that generates the heat needed to 
manufacture the product. If the primary purpose for which the copper concentrate 
is used is the criterion for an allocation based on the fuel benchmark, the question 
arises as to whether that requirement is fulfilled where its two purposes (as a raw 
material and as a fuel) rank equally (‘dual use’). 
27 Nor is there any clarification as to whether a fuel within the meaning of the fuel 
benchmark in Article 3(h) of Decision 2011/278 depends on the exchangeability 
of the fuel and what the effect of any such requirement would be in this case, 
especially as the applicant states that heavy fuel oil was used as (additional) fuel 
alongside the copper concentrate up to 2008. 
Second question 
28 The considerations of the referring court on the second question correspond 
wholly with its considerations in respect of the fifth question referred in its request 
for a preliminary ruling in Case C-126/20.