Judgment;Summary — ECLI:EU:C:2021:1024
Date: 2021-12-16
Language of the case: Hungarian
Court formation: Tenth Chamber
Subject matter: Environment;Pollution
Procedure: Reference for a preliminary ruling
Origin: Hungary

Translation  C-575/20 — 1 
Case C-575/20 
Request for a preliminary ruling 
Date lodged: 
3 November 2020 
Referring court:  
Fővárosi Törvényszék (Budapest High Court, Hungary) 
Date of the decision to refer: 
29 September 2020 
Applicant:  
Apollo Tyres (Hungary) Kft. 
Defendant:  
Innovációért és Technológiáért Felelős Miniszter (Minister for 
Innovation and Technology) 
  
Fővárosi Törvényszék (Budapest High Court) 
[…] 
In the administrative-law proceedings between Apollo Tyres (Hungary) Kft. 
([…] Gyöngyöshalász […] [Hungary]) […], the applicant, and the Innovációért 
és Technológiáért Felelős Miniszter (Minister for Innovation and Technology) 
([…] Budapest […]) […], the Budapest High Court has issued the following 
Decision: 
This court is making a reference to the Court of Justice of the European Union for 
a preliminary ruling in order to obtain an interpretation of the provisions of 
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. 
This court refers [the following question] to the Court of Justice of the European 
Union: 
EN 
REQUEST FOR A PRELIMINARY RULING 29. 9. 2020 — CASE C-575/20 
 
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Can Directive 2003/87/EC, and paragraph 3 of Annex I thereof in particular, 
be interpreted as meaning that, for the purposes of deciding upon the 
inclusion of the [combustion of fuels] by a particular installation in the 
scheme for greenhouse gas emission allowance trading within the European 
Union (the EU ETS), [the calculation of] the total rated thermal input of the 
installation should take account of the fact that certain equipment that is part 
of the installation in question is subject to a restriction (which has been 
verified)? 
[…] [procedural considerations of domestic law] 
Grounds 
This court asks the Court of Justice of the European Union to interpret Article 3(e) 
of Directive 2003/87/EC and paragraph 3 of Annex I to the directive in order to 
determine the total rated thermal input of certain installations included in the 
scheme for greenhouse gas emission allowance trading within the Union (‘the EU 
ETS’). 
I. Relevant provisions of law 
EU law 
Directive 2003/87/EC of the European Parliament and of the Council establishing 
a scheme for greenhouse gas emission allowance trading within the Community 
and amending Council Directive 96/61/EC. 
European Commission guidance on interpretation of Annex I to the directive. 
Hungarian law 
Az üvegházhatású gázok közösségi kereskedelmi rendszerében és az erőfeszítés-
megosztási határozat végrehajtásában történő részvételről szóló 2012. évi 
CCXVII. törvény (Law CCXVII of 2012 on participation in the Community 
scheme for greenhouse gas [emission allowance] trading and in the 
implementation of the decision on effort sharing, ‘Law CCXVII of 2012’). 
Article 2(24) of the law establishes the following definition: 
‘installation means a stationary technical unit where one or more activities listed 
in paragraphs I to XXI of Annex I are carried out, or any other technically related 
activities, and any other activities which have a technical connection with the 
activities carried out on that site and which result in the emission of greenhouse 
gases listed in Annex I or which have a direct effect on such emissions’. 
Article 2(46) and (47) of the law contains the following definitions: 
APOLLO TYRES (HUNGARY) 
 
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‘46. reserve unit: equipment that generates emissions which is used as a 
replacement for the equipment that operates in an installation under normal 
operating conditions; 
47. backup unit: equipment that generates emissions which is operational and 
which is brought into service in an installation where the primary source of power 
is not available for reasons of force majeure’. 
For the purposes of paragraph 3(I) of Annex I, ‘activity’ means the ‘combustion of 
fuels in installations with a total rated thermal input of more than 20 MWt (other 
than installations for the incineration of hazardous or municipal waste)’. 
Az üvegházhatású gázok közösségi kereskedelmi rendszerében és az erőfeszítés-
megosztási határozat végrehajtásában való részvételről szóló 2012. évi 
CCXVII. törvény végrehajtásának egyes szabályairól szóló 410/2012. (XII. 28.) 
Korm. rendelet (Government Decree No 410/2012 of 28 December 2012 on 
regulations implementing Law CCXVII of 2012 on participation in the 
Community scheme for greenhouse gas emission allowance trading and in the 
implementation of the decision on effort sharing, ‘Government Decree 
No 410/2012’). 
Article 1(5): ‘The authority shall issue an emissions permit on the basis of an 
administrative decision which establishes the environmental conditions of use 
where it considers that the operator satisfies the conditions established in Law 
CCXVII of 2012. Annex 3 specifies the detailed substantive requirements for 
emissions permits.’ 
Paragraph 3.I of the table in Annex 2 defines ‘activity’ as the ‘combustion of fuels 
in installations with a total rated thermal input of more than 20 MWt (other than 
installations for the incineration of hazardous or municipal waste and diesel 
generators used as an emergency source of power in nuclear power plants)’. 
Paragraph 2(7) of Annex 2 provides as follows: ‘When the total rated thermal 
input of an installation is calculated in order to decide upon its inclusion in the 
Community scheme, the rated thermal inputs of all technical units which are part 
of it ― including equipment which is exempt pursuant to Article 15/B of Law 
CCXVII of 2012, that is to say, reserve and backup units ― in which fuels are 
combusted within the installation, are added together. These units could include 
all types of boilers, burners, turbines, heaters, furnaces, incinerators, calciners, 
kilns, ovens, dryers, engines, fuel cells, chemical looping combustion units, flares, 
and thermal or catalytic post-combustion units, including equipment which is 
exempt pursuant to Article 15/B of Law CCXVII of 2012. Units with a rated 
thermal input under 3 MW and units which use exclusively biomass shall not be 
taken into account for the purposes of this calculation. “Units using exclusively 
biomass” includes units which use fossil fuels only during start-up or shut-down 
of the unit.’ 
REQUEST FOR A PRELIMINARY RULING 29. 9. 2020 — CASE C-575/20 
 
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A 140 kWth és annál nagyobb, de 50 MWth-nál kisebb teljes névleges bemenő 
hőteljesítményű tüzelőberendezések működési feltételeiről és légszennyező 
anyagainak kibocsátási határértékeiről szóló 53/2017. (X. 18.) FM rendelet (Order 
53/2017 by the Minister for Agriculture of 18 October 2017 on the operating 
conditions for combustion units with a total rated thermal input greater than or 
equal to 140 kWt but less than 50 MWt and the emission limit values for air 
pollutants, ‘Ministerial Order 53/2017 of 18 October 2017’). 
Article 2(7) of the order provides that ‘the rated thermal input is the calorific 
value, expressed in kilowatts [thermal] (kWt) or megawatts [thermal] (MWt), of 
the fuel supplied per unit time to the combustion unit in question in order for the 
combustion unit to operate at the rated power established in an administrative 
decision’. 
II. Subject matter of the main proceedings and relevant facts 
In 2017 the applicant began manufacturing tyres. In its operations it uses three 
Bosch Universal UL-S 18000 steam boilers. The company Kazántrade Kft. has 
certified that computer software sets the boilers’ maximum combustion power at 
the following levels: 8 991 kW — 8 791 kW — 8 962 kW. To ensure that the 
applicant’s thermal input remains below 20 MWt at all times, one of the boilers is 
always switched off, so that the maximum thermal input that can be reached is 
17 953 kW (8 991 kW + 8 962 kW). Proof of this is provided by the gas 
consumption recording system, which is available online, and the daily boiler 
records and documentary evidence of gas consumption held at the installation. 
The applicant’s operating licence, updated to reflect air quality requirements, also 
states that ‘no more than two boilers may be in operation at any time; therefore the 
maximum total rated thermal input that can be achieved is 17 953 kW’. 
The Minister for Innovation, who is the defendant and the authority responsible 
for issuing emissions permits, fined the applicant for carrying on an activity that 
generates greenhouse gas emissions without the relevant permit. That is the issue 
with which the proceedings before this administrative court are concerned. The 
defendant considers that the operating practice cited by the applicant, which 
[gives] a lower thermal input for the operation of the steam boilers (the 17 953 
MWt stated as the ‘rated power of the equipment’) shows the total rated thermal 
input of only two boilers; in other words, it is the sum of the thermal inputs of the 
largest boilers to which the restriction applies, and therefore it does not provide 
the total rated thermal input of all (three) boilers. 
Citing national law and the legislation governing the EU ETS, the defendant states 
that there is no current provision that would enable the rated thermal input to be 
altered by the aforesaid method of operating the equipment in the installation (that 
is, using software to restrict operation). The total rated input of the three steam 
boilers restricted by the software still exceeds 20 MWt. 
APOLLO TYRES (HUNGARY) 
 
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In the light of the above, the conclusion reached by the defendant in his decision 
was that, when examining inclusion in the EU scheme (the EU ETS), there is no 
requirement to take into consideration the combustion of fuel at any given time, 
and therefore the examination must take account of the rated thermal input of all 
the technical units which are part of the installation. 
Main arguments of the parties 
The applicant has asked this court, amongst other things, to declare that, when 
determining inclusion in the EU ETS, the calculation of the total rated thermal 
input must take into account a restriction which prevents the equipment subject to 
that restriction from running at the same time as the operational equipment, or 
from operating at a thermal input that exceeds the restriction. 
In the applicant’s opinion, under both EU law and national law, for the purpose of 
the inclusion of an activity in the EU ETS, if equipment ― whether a generating 
unit or a reserve or backup unit ― has a direct effect on emissions, it is important 
to know whether that equipment is used to carry out activities in which fuels are 
combusted or activities directly related to such activities, or whether the 
equipment has a direct technical connection with those activities. 
Specifically, it argues that the concept of rated thermal input is not defined in the 
directive or in EU law. According to section 3.3.1 of the European Commission 
guidance on interpretation of Annex I to the directive, the total rated thermal input 
is specified by the manufacturer and is usually displayed on the equipment, with 
the consent of the inspection body. Where no information on the total rated 
thermal input specified by the manufacturer is available, the operator of the 
equipment must provide the competent authority with an estimate (based, for 
example, on the maximum fuel throughput achieved in a 24-hour period during 
the last year) in order to obtain approval. 
Under the Hungarian legislation, the equipment’s rated power is determined by an 
administrative decision; moreover, the equipment’s rated power is not the same as 
the equipment’s rated thermal input, since the latter is the calorific value of the 
fuel required in order to operate at the rated power. 
Thus, Article 2(7) of Ministerial Order 53/2017 of 18 October 2017 does not 
stipulate that the thermal input of the installation must be specified by an 
administrative decision. The basic permit established the rated thermal inputs of 
the boilers and classed the third boiler as a ‘reserve’ unit, since the actual 
maximum thermal input required by the production technology could be met by 
two boilers operating simultaneously. Before the start of the administrative 
procedure conducted by the defendant, the basic permit was updated in order to 
establish the rated power of the equipment in an official document, in a manner 
which took into account the physical and software restrictions on the boilers. 
During the procedure conducted by the defendant, the applicant has provided 
evidence (in the form of records and statements) on several occasions to show that 
REQUEST FOR A PRELIMINARY RULING 29. 9. 2020 — CASE C-575/20 
 
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the boilers are subject to both a physical and a software restriction, but the 
defendant has declined to accept this because, when examining inclusion in the 
EU ETS, he has only taken into account the total rated thermal input specified in 
the basic permit. According to the applicant, in order to issue an emissions permit, 
the defendant is required to examine specifically whether the conditions in Law 
CCXVII of 2012 are satisfied (that is, whether the installation operated by the 
applicant has a total rated thermal input of more than 20 MW), over and above the 
information contained in the basic permit. An examination of the total rated 
thermal input of the installation is an important part of the procedure for issuing 
an emissions permit, particularly with regard to reaching a reasoned decision, 
because, under Annex 3 of Government Decree No 410/2012, the determination 
of total rated thermal input is an obligatory element of the emissions permit. 
Moreover, in the course of the procedure the applicant has demonstrated that the 
actual thermal input of the boilers is lower than the total rated thermal input 
specified in the basic permit, due to the restrictions under which they operate. In 
the light of these considerations, the defendant’s contention that a decision on 
inclusion in the EU ETS must be based solely on the total rated thermal input 
stated in the basic permit does not make sense. If the basic permit, as an official 
document, gives the restricted capacity as the rated power of the equipment, the 
defendant will disregard it; but if the basic permit gives the total rated thermal 
input as the rated power, the defendant will accept it at face value, without 
examining its characteristics. Paragraph 3 of Annex I to the directive allows 
regard to be had to the total rated thermal input of the technical units of the 
installation in which fuels are combusted. In other words, the equipment that is 
subject to restrictions cannot be classed as technical units in which fuels are 
combusted, to the extent that the restriction applies, and therefore the rated 
thermal input of that equipment cannot be included in the calculation of the total 
rated input. Based on the definition of installation in Article 3(e) of the directive, 
any technical unit in which it is not possible to carry out an activity because of a 
restriction, or in which the activity can be carried out only to a lesser extent 
because of a restriction imposed by software, or which does not have a direct 
technical connection with the activities carried out on that site cannot ― for such 
time as the restriction remains in place, and to the extent that the restriction 
applies ― have an effect on emissions and pollution; therefore, the part of the 
equipment that is restricted will not be part of the installation for the purposes of 
determining inclusion in the EU ETS either. 
Drawing parallels with the Hungarian legislation, when calculating the total rated 
thermal input for the purposes of including an activity in the EU ETS, the 
calculation should cover the rated thermal input of the technical units of the 
installation in which fuels are combusted. For the restricted equipment, the 
activity is carried out below the value of that limit and therefore it does not 
produce greenhouse gases; and, because of the restriction, it can have only an 
indirect effect on emissions if the restriction is lifted; it follows, therefore, that the 
part of the equipment that is restricted is not part of the installation. Since the 
restricted equipment cannot be deemed a unit in service that is operating up to the 
APOLLO TYRES (HUNGARY) 
 
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limit value, it is not classed as a reserve or backup unit under the Hungarian 
legislation. 
To summarise these arguments, under both EU and national law, in order to 
decide on the inclusion of an activity in the EU ETS it is essential to determine 
whether there is equipment ― regardless of whether it is classed as part of the 
installation or as a reserve or backup unit ― which has a direct effect on 
emissions, whether activities in which fuels are combusted or directly associated 
activities are carried out in that equipment, or whether the equipment has a direct 
technical connection with those activities. If the answer is no, then the rated 
thermal input of that equipment may be disregarded for the purposes of 
calculating the total rated thermal input. 
The defendant maintains that the only documents that could be accepted as proof 
of the restricted thermal input are certificates of conformity with technical safety 
requirements issued after the alteration or restriction which also include a reliable 
statement of the rated thermal input of the combustion unit. For the purposes of 
determining the rated thermal input as part of the procedure for issuing an 
emissions permit, ‘the thermal input that reflects the actual situation’ is not 
decisive, because only the manufacturer’s specifications (in an operating manual 
or displayed on the equipment) are decisive. Consequently, the rated thermal input 
is specified by the manufacturer and is constant; therefore it can only be altered if 
the boiler is altered. 
Based on paragraph 2(7) of Annex 2 to Government Decree No 410/2012 and 
Article 1(5) of the decree, only official documents can be accepted as evidence of 
the total rated thermal input and, therefore, the inclusion of the applicant’s activity 
in the EU ETS can be assessed on the basis of the sum of the rated thermal inputs 
of the combustion units as stated in the applicant’s basic permit. There is no 
provision in the legislation governing the EU ETS that would allow the rated 
thermal input to be reduced to take account of physical or software restrictions on 
the operation of the equipment in the installation. The basic permit must also state 
the authorised technical practice, to enable the defendant to take that practice into 
consideration when issuing the emissions permit. The restriction on the boilers 
may be taken into account when determining the total rated thermal input of the 
installation if the restriction is confirmed by official documents. 
III. Reasons for the request for a preliminary ruling 
In order to reach a decision in these proceedings, it is necessary to determine 
whether, for the purposes of the inclusion of an activity in the EU ETS, regard 
must be had as to whether equipment ― that is, a unit that is part of the 
installation, even if it is a reserve or backup unit ― has a direct effect on 
emissions, whether activities in which fuels are combusted or directly associated 
activities are carried out in that equipment, or whether the equipment has a direct 
technical connection with those activities. If the answer is no, [the court asks 
REQUEST FOR A PRELIMINARY RULING 29. 9. 2020 — CASE C-575/20 
 
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whether] the rated thermal input of the equipment in question may be disregarded 
for the purposes of calculating the total rated thermal input. 
[…] […] [procedural considerations of domestic law] 
Budapest, 29 September 2020. 
[…] [signatures]