Judgment;Summary — ECLI:EU:C:2025:350
Date: 2025-05-15
Language of the case: Finnish
Court formation: Second Chamber
Subject matter: Environment;Pollution;Fundamental rights;Charter of Fundamental Rights
Procedure: Reference for a preliminary ruling
Origin: Finland

Summary of the essential arguments of the parties 
(6) In the action it brought before the hallinto-oikeus (Administrative Court), 
Metsä Fibre Oy argued that the Äänekoski installation was almost CO2 neutral 
nowadays thanks to extensive investment by the company, with the result that the 
company could not, in practice, make use of the positive compliance status of the 
compliance account for that installation in future surrenders of emission 
allowances. 
(7) Metsä Fibre Oy contends that the court should set aside the Energy Agency 
decision in so far as it determines that the company can have the allowances 
which had been surrendered in excess offset against the surrender of emissions 
allowances for 2021. Metsä Fibre Oy considers that the type of remedy provided 
by the Energy Agency decision cannot be regarded as an effective and appropriate 
way to put the company into the legal and financial position in which it would 
have been if the invalid provisions of the Commission Monitoring Regulation had 
not existed and the company had not surrendered excessive allowances on the 
basis of them. According to Metsä Fibre Oy, the surrender of allowances to the 
Union Registry must be reversed so that the company receives the erroneously 
surrendered allowances back into the account of the Äänekoski installation and 
can use them as it sees fit. 
(8) In its observations submitted to the hallinto-oikeus (Administrative Court), 
the Energy Agency argued that it had been unable to decide the matter in any 
other way within the rules relating to the Union Registry. The observations stated 
that the quantities of emissions from Metsä Fibre Oy’s Äänekoski installation had 
decreased considerably since 2018. The Energy Agency argued that, in practice, 
the possibility of using the positive compliance status of the compliance account 
entirely for the installation’s future emissions therefore remained theoretical. 
According to the observations, at the current annual rate of emissions – less than 
20 tonnes of CO2 a year – it would take an estimated six to seven thousand years 
to use up the positive compliance status of the compliance account amounting to 
115 312 allowances. 
Provisions of national law 
(9) Under Paragraph 46(1) of the Päästökauppalaki (Law on emissions trading) 
[8.4.2011/311], the emissions trading authority acts as the registry office 
responsible for the national functions of the registry referred to in Article 19 of the 
Emission Trading Directive, to ensure that exact accounts are kept of the annual 
recording, holding, transfer and cancellation of emissions allowances. In 
accordance with subparagraph (3) of the same Paragraph, the Commission 
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Registry Regulation is followed in matters relating to the establishment, 
management and functions of the registry. 
(10) Under Paragraph 48 of the Law on emissions trading, the entry in the 
registry of the annual recording of allowances, the holding, transfer and 
cancellation of allowances and project units, the right of public access to the 
information contained in the registry, and the confidentiality of the information 
are governed by the Commission's Registry Regulation. 
Relevant EU legislation and case-law 
(11) The Schaefer Kalk judgment of the Court of Justice, as regards the parts 
relevant to the present dispute, was referenced in paragraph (3) above. 
(12) Under Article 70(1) of the Commission Monitoring Regulation, the 
competent authority shall make a conservative estimate of the emissions of an 
installation or aircraft operator in any of the following situations: 
(b) the verified annual emission report referred to in Article 67(1) is not in 
compliance with this Regulation. 
(13) Under recital (8) of the Commission Registry Regulation, as allowances and 
Kyoto units exist only in dematerialised form and are fungible, the title to an 
allowance or Kyoto unit should be established by their existence in the account of 
the Union Registry in which they are held. Moreover, to reduce the risks 
associated with the reversal of transactions entered in a registry, and the 
consequent disruption to the system and to the market that such reversal may 
cause, it is necessary to ensure that allowances and Kyoto units are fully fungible. 
In particular, transactions cannot be reversed, revoked or unwound, other than as 
defined by the rules of the registry, after a moment set out by those rules. Nothing 
in this Regulation should prevent an account holder or a third party from 
exercising any right or claim resulting from the underlying transaction that they 
may have in law to recovery or restitution in respect of a transaction that has 
entered a system, such as in case of fraud or technical error, as long as this does 
not lead to the reversal, revocation or unwinding of the transaction. Furthermore, 
the acquisition of an allowance or Kyoto unit in good faith should be protected. 
(14) Under Article 35(6) of the Commission Registry Regulation, the competent 
authority may instruct the national administrator to correct the annual verified 
emissions for an installation to ensure compliance with Articles 14 and 15 of 
Directive 2003/87/EC, by entering the corrected verified or estimated emissions 
for that installation for a given year in the Union Registry. 
(15) Under Article 40(1) of the Commission Registry Regulation, an allowance 
or Kyoto unit shall be a fungible, dematerialised instrument that is tradable on the 
market. Under paragraph 2, the dematerialized nature of allowances and Kyoto 
units shall imply that the record of the Union Registry shall constitute prima facie 
and sufficient evidence of title over an allowance or Kyoto unit, and of any other 
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matter which is by this Regulation directed or authorised to be recorded in the 
Union Registry. Under paragraph 3, the fungibility of allowances and Kyoto units 
shall imply that any recovery or restitution obligations that may arise under 
national law in respect of an allowance or Kyoto unit shall only apply to the 
allowance or Kyoto unit in kind. Subject to Article 70 and the reconciliation 
process provided for in Article 103, a transaction shall become final and 
irrevocable upon its finalisation pursuant to Article 104. Without prejudice to any 
provision of or remedy under national law that may result in a requirement or 
order to execute a new transaction in the Union Registry, no law, regulation, rule 
or practice on the setting aside of contracts or transactions shall lead to the 
unwinding in the registry of a transaction that has become final and irrevocable 
under this Regulation. An account holder or a third party shall not be prevented 
from exercising any right or claim resulting from the underlying transaction that 
they may have in law, including to recovery, restitution or damages, in respect of 
a transaction that has become final in the Union Registry, for instance in case of 
fraud or technical error, as long as this does not lead to the reversal, revocation or 
unwinding of the transaction in the Union Registry. 
(16) Under Article 70(1) of the Commission Registry Regulation, if an account 
holder or a national administrator acting on behalf of the account holder 
unintentionally or erroneously initiated one of the transactions referred to in 
paragraph 2, the account holder may propose to the administrator of its account to 
carry out a reversal of the completed transaction in a written request. The request 
shall be posted within five working days of the finalisation of the process. The 
request shall contain a statement indicating that the transaction was initiated 
erroneously or unintentionally. 
Under paragraph 2(a), account holders may propose the reversal of, inter alia, the 
surrender of allowances. Under paragraph 3, if the administrator of the account 
establishes that the request fulfils the conditions under paragraph 1 and agrees 
with the request, it may propose the reversal of the transaction in the Union 
Registry. Under paragraph 6(a), the central administrator shall ensure that the 
Union Registry accepts the proposal for reversal made pursuant to paragraph 1, 
provided that a transaction surrendering allowances to be reversed was not 
completed more than 30 working days prior to the account administrator’s 
proposal in accordance with paragraph 3. 
(17) Under Article 33(1) of Commission Delegated Regulation (EU) 2019/1122 
of 12 March 2019 supplementing Directive 2003/87/EC of the European 
Parliament and of the Council as regards the functioning of the Union Registry, 
which is relevant to the trading period 2021-2030, the central administrator shall 
ensure that on 1 May of each year, the Union Registry indicates the compliance 
status figure for the preceding year for every installation and aircraft operator with 
an operator or aircraft operator holding account that is not in a closed status by 
calculating the sum of all allowances surrendered for the current period less the 
sum of all verified emissions in the current period up to and including the 
preceding year, plus a correction factor. Under paragraph 2 of the same Article, 
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for the trading periods 2008-2012 and 2013-2020, the correction factor referred to 
in paragraph 1 shall be zero if the compliance status figure of the last year of the 
previous period was greater than zero, but shall remain the same as the 
compliance status figure of the last year of the previous period if this figure is less 
than or equal to zero. For the trading periods starting on 1 January 2021, the 
correction factor referred to in paragraph 1 shall be the same as the compliance 
status figure of the last year of the previous period. 
(18) Under Article 17(1) of the Charter of Fundamental Rights of the European 
Union, everyone has the right to own, use, dispose of and bequeath his or her 
lawfully acquired possessions. No one may be deprived of his or her possessions, 
except in the public interest and in the cases and under the conditions provided for 
by law, subject to fair compensation being paid in good time for their loss. The 
use of property may be regulated by law in so far as is necessary for the general 
interest. 
The need to obtain a preliminary ruling 
(19) The views of Metsä Fibre Oy and the Energy Agency do not differ on the 
reasons for correcting the emissions quantities or on the corrected emissions 
quantities. In the present dispute, therefore, the only question to be examined 
before the hallinto-oikeus (Administrative Court) as a result of the action brought 
by Metsä Fibre Oy is whether the Energy Agency decision as to the manner of 
offsetting the emissions allowances surrendered in excess to the Union Registry is 
lawful, in particular when it is taken into account that the surrender of excessive 
allowances resulted from the application of provisions in the Commission 
Monitoring Regulation which were later found, in the Schaefer Kalk judgment, to 
be invalid. 
(20) While dealing with the matter, the Energy Agency was in contact with the 
Commission, which was of the opinion that the conditions for reversing the 
surrender of allowances were not satisfied, because the timeframes specified in 
Article 70 of the Commission Registry Regulation had been exceeded. 
(21) Both Metsä Fibre Oy and the Energy Agency proposed to the hallinto-oikeus 
(Administrative Court) that a request be made to the Court of Justice of the 
European Union for a preliminary ruling under Article 267 of the Treaty on the 
Functioning of the European Union. 
(22) It is common ground in the dispute that the timeframes specified in 
Article 70 of the Commission Registry Regulation for the reversal of a transaction 
have passed, making the surrender of allowances to the Union Registry final and 
irrevocable on the basis of Article 40 of the regulation. The Energy Agency has 
therefore returned the allowances to the compliance account of Metsä Fibre Oy’s 
Äänekoski installation in the form of a positive compliance status. The hallinto-
oikeus (Administrative Court) is unaware of any other way provided for in the 
regulation or in another piece of EU legislation to take account of the situation 
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which has arisen for Metsä Fibre Oy from the Schaefer Kalk judgment. It is 
moreover common ground that, under the prevailing circumstances, Metsä Fibre 
Oy cannot in practice use the allowances granted by the Energy Agency decision, 
because it has considerably reduced the CO2 emissions of the Äänekoski 
installation. 
(23) The question of law at issue in the present dispute therefore hinges primarily 
on whether the Commission Registry Regulation is in certain respects invalid in 
the present circumstances as, even after the point when the Commission 
Monitoring Regulation was amended in light of the Schaefer Kalk judgment, it 
still does not take into account the situation currently at issue of Metsä Fibre Oy’s 
Äänekoski installation and does not permit effective implementation of the 
judgment in relation to the company. 
(24) The national courts have no jurisdiction themselves to declare that acts of 
Community institutions are invalid (judgment of 22 October 1987, Foto-Frost, 
C-314/85, EU:C:1987:452, paragraph 20). Where a court against whose decisions 
there is a judicial remedy under national law considers that one or more arguments 
for invalidity, put forward by the parties or, as the case may be, raised by it of its 
own motion, are well founded, it is incumbent upon it to stay proceedings and to 
make a reference to the Court for a preliminary ruling on the act’s validity 
(judgment of 10 January 2006, Air Transport, C-344/04, EU:C:2006:10, 
paragraph 30). 
(25) In the action brought by Metsä Fibre Oy before the hallinto-oikeus 
(Administrative Court), the Energy Agency decision is considered to infringe 
primary EU law, in particular because a situation where, in the circumstances 
described, the company in effect derives no benefit from the return of the 
allowances infringes the right to property guaranteed in Article 17 of the Charter 
of Fundamental Rights of the European Union, the principle of equality and the 
economic logic of emissions trading. The action contends that Articles 40 and 70 
of the Commission Registry Regulation, in view of the aspects set out, are invalid 
in the present situation, Metsä Fibre Oy is in effect left without legal protection 
and the legal rule articulated by the Schaefer Kalk judgment is not implemented. 
(26) The assessment presented at that stage by the hallinto-oikeus 
(Administrative Court) is that the aspects submitted by Metsä Fibre Oy referring 
to the invalidity of the rules are to be considered significant in that there is a 
reasonable assumption that those rules infringed primary legislation. In that 
situation, it is necessary to stay the proceedings before the court or tribunal against 
whose decision there is a judicial remedy under national law and to request, in 
preliminary ruling proceedings, that the Court of Justice assess the effectiveness 
of the rules. 
(27) Metsä Fibre Oy and the Energy Agency were given the opportunity to 
submit their observations on the questions referred for a preliminary ruling. 
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Hallinto-oikeus (Administrative Court) interim order for reference to the 
Court of Justice of the European Union for a preliminary ruling 
(28) The hallinto-oikeus (Administrative Court) has decided to stay the 
proceedings and to request a preliminary ruling from the Court of Justice under 
Article 267 of the Treaty on the Functioning of the European Union. A 
preliminary ruling is necessary for the resolution of the dispute pending before the 
hallinto-oikeus (Administrative Court). 
Questions referred for a preliminary ruling 
1 Are the provisions of Articles 70 and 40 of the Commission Registry 
Regulation regarding the timeframes for reversal of transactions and the 
final and irrevocable nature of transactions invalid when the right to 
property under Article 17 of the Charter of Fundamental Rights of the 
European Union and the other rights protected in the Charter of 
Fundamental Right are taken into account, in as much as the provisions at 
issue prevent the retransfer of the allowances to Metsä Fibre Oy in a 
situation where the surrender of excessive allowances to the Union Registry 
was based on the application of the provisions which were found in the 
Schaefer Kalk judgment to be invalid, and the company cannot use the 
positive compliance status of the compliance account because of the current 
low level of emissions from the Äänekoski installation? 
2 If Question 1 is answered in the negative, are the provisions of Articles 70 
and 40 of the Commission Registry Regulation at all applicable in a situation 
where the surrender of excessive allowances to the Union Registry was 
based on application of the provisions which were found in the Schaefer 
Kalk judgment to be invalid and not on a transaction unintentionally or 
erroneously initiated by an account holder or a national administrator acting 
on behalf of the account holder? 
3 If Question 1 is answered in the negative and Question 2 is answered in the 
affirmative, is there any other way made possible by EU law to put Metsä 
Fibre Oy in the position, with respect to use of the allowances, in which it 
would have been if the provisions which were found in the Schaefer Kalk 
judgment to be invalid had not existed and the company had not surrendered 
excessive allowances on the basis of them? 
(29) Once it has received a preliminary ruling from the Court of Justice on the 
questions set out above, the hallinto-oikeus (Administrative Court) will give a 
final decision in the case. 
Appeal 
Under Paragraph 108 of the Oikeudenkäynnistä hallintoasioissa annettu laki 
(Rules of procedure of the administrative courts), that order is not open to separate 
appeal. 
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