Judgment — ECLI:EU:C:2017:490
Date: 2017-06-22
Language of the case: Swedish
Court formation: Second Chamber
Subject matter: Environment;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Sweden

summary, I believe that a national measure which requires application of the MB method in a location with clear boundaries, such as the national gas pipeline network, and excludes biogas verified using that method which comes from the interconnected network of national gas pipelines, constitutes a measure having an effect equivalent to a quantitative restriction on imports, contrary to Article 34 TFEU. V – Conclusion 95. In the light of the foregoing considerations, I propose that the Court reply as follows to the questions referred for a preliminary ruling by the Förvaltningsrätten i Linköping (Administrative Court, Linköping): (1) In using the terms ‘mass balance’ and ‘mixture’, Article 18(1) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC neither prohibits nor requires the unconditional acceptance by Member States of trade in biogas via a network of interconnected national gas pipelines. (2) There are no grounds on which to declare that Article 18(1) of Directive 2009/28 infringes Article 34 TFEU. (3) A national measure which requires application of the MB method in a location with clear boundaries, such as the national gas pipeline network, and excludes biogas verified using that method which comes from the interconnected network of national gas pipelines, constitutes a measure having an effect equivalent to a quantitative restriction on imports, contrary to Article 34 TFEU. 1 Original language: Spanish. i In the body of the Opinion in Case C‑549/15 E.ON Biofor Sverige the following five errors were identified following its delivery and need to be amended: In title I.A read ‘A. EU law: Directive 2009/28’, and not ‘A. EU law’. Title I.A.1 Directive 2009/28 thus disappears. In footnote No 16, in fine, read ‘p. 148’, and not p. 143. In footnote No 22 read ‘point 47’ and not point 48. In footnote No 28 read ‘points 43 and 44’, and not points 45 and 46. In footnote No 33 read ‘point 68’, and not point 69. 2 Biogas contains methane (in a proportion of between 50% and 70% by volume), carbon dioxide and small proportions of other gases. After it has been captured and purified at production plants, biogas is used to produce electricity in ovens, heaters, driers, boilers and other properly adapted combustion systems. When it is processed to obtain natural, concentrated and compressed biogas (following the removal of carbon dioxide, the percentage of methane increases to 96%), its quality is equivalent to that of natural gas derived from fossil fuels, such that it can be injected into the gas pipeline network (as occurs in this case) and used for the operation of vehicles. 3 Production plants have a fermenter or biodigester which uses the anaerobic digestion of certain bacteria to transform hydrates and fats into biogas. The raw materials used for that purpose are, basically, biomass; in other words, animal, vegetable, forestry, aquaculture and agri-food industry waste and biodegradable urban waste. The activities of those industrial facilities enable the disposal of that waste and the simultaneous production of biogas and bio-fertilisers. 4 On the technical details of biogas production, see Varnero Moreno, M.T., Manual del biogás, FAO, 2011. 5 Directive of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L 140, p. 16). 6 Biogas is produced in 15 EU Member States, according to data from the European Biogas Association, EBA's Biomethane fact sheet, 2015. 7 On the Court’s ability to reformulate the questions referred for a preliminary ruling in order to provide the national court with a helpful reply, see judgment of 13 October 2016, M. and S. (C‑303/15, EU:C:2016:17, paragraph 16 and the case-law cited therein). 8 Lagen (2010:598) om hållbarhetskriterier för biodrivmedel och flytande biobränsle (‘Law 2010/598’). 9 Förordning (2011:1088) om hållbarhetskriterier för biodrivmedel och flytande biobränslen (‘Rules 2011/1088’). 10 Statens energimyndighets föreskrifter om hållbarhetskriterier för biodrivmedel och flytande biobränslen (‘STEMFS 2011/2’). 11 The imported biogas therefore ceased to be classified as sustainable under Swedish law and was no longer eligible for the tax advantages laid down in the Law (1994:1776) on tax on energy (Lagen (1994:1776) om skatt på energi), which allows the sale of biogas at a price competitive with that of gas extracted from fossil fuels. 12 For example, land of high biodiversity value (primary forest and forested areas; areas designated for nature protection purposes or for the protection of rare, threatened or endangered ecosystems or species; highly diverse grasslands) or land with high stocks of carbon (wetlands, forested areas or areas with very tall trees) and peatlands. 13 Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ 2009 L 30, p. 16). 14 That is the view expressed by the Commission in its Communication on the practical implementation of the EU biofuels and bioliquids sustainability scheme and on counting rules for biofuels (OJ 2010 L 160, p. 8). 15 A comparative analysis of the advantages and disadvantages of those three methods may be found in the Final report for Task 1 in the context of the project ENER/C1/2010-431, Jasper Van de Staaij, J.; Van den Bos, A.; Toop, G.; Alberici, S.; Yildiz, I., Analysis of the operation of the mass balance system and alternatives, 2012. 16 See SEC/2008/0085 final of 23 January 2008, Commission staff working document — Impact assessment — Document accompanying the package of implementation measures for the EU’s objectives on climate change and renewable energy for 2020, p. 143. 17 In that connection, recital 76 in the preamble to Directive 2009/28 states that changes in [the behaviour of] market actors ‘will occur only if biofuels and bioliquids meeting those criteria command a price premium compared to those that do not. According to the mass balance method of verifying compliance, there is a physical link between the production of biofuels and bioliquids meeting the sustainability criteria and the consumption of biofuels and bioliquids in the Community, providing an appropriate balance between supply and demand and ensuring a price premium that is greater than in systems where there is no such link. To ensure that biofuels and bioliquids meeting the sustainability criteria can be sold at a higher price, the mass balance method should therefore be used to verify compliance. This should maintain the integrity of the system while at the same time avoiding the imposition of an unreasonable burden on industry.’ 18 See SEC/2010/0129 final of 31 January 2011, Commission Staff Working Document Report on the operation of the mass balance verification method for the biofuels and bioliquids sustainability scheme in accordance with Article 18(2) of Directive 2009/28/EC. 19 The Communication from the Commission on voluntary schemes and default values in the EU biofuels and bioliquids sustainability scheme (OJ 2010 C 160, p. 1) provides further details of the manner in which the MB method should be used as a procedure for ensuring the chain of custody of biofuels which is capable of guaranteeing traceability of compliance with the sustainability criteria from the production stage until final consumption. The Commission observed that mass balance is a system in which ‘sustainability characteristics’ remain assigned to ‘consignments’ and when consignments with different sustainability characteristics are mixed, the separate sizes and sustainability characteristics of each consignment remain assigned to the mixture. If a mixture is split up, any consignment taken out of it can be assigned any of the sets of sustainability characteristics accompanied with sizes as long as the combination of all consignments taken out of the mixture has the same sizes for each of the sets of sustainability characteristics that were in the mixture. 20 These can be viewed at https://ec.europa.eu/energy/en/topics/renewable-energy/biofuels/voluntary-schemes. 21 The Communication from the Commission cited in footnote 19, point 2.2.3. 22 See point 48 of this Opinion. 23 Points 30 to 32 of its written observations. 24 Commission Implementing Decision (EU) 2016/1361 of 9 August 2016 on recognition of the ‘International Sustainability and Carbon Certification system’ for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC of the European Parliament and of the Council (OJ 2016 L 215, p. 33); Commission Implementing Decision 2012/432/EU of 24 July 2012 on recognition of the ‘REDcert’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC of the European Parliament and of the Council (OJ 2012 L 199, p. 24); and Commission Implementing Decision 2012/452/EU of 31 July 2012 on recognition of the ‘NTA 8080’ scheme for demonstrating compliance with the sustainability criteria under Directives 98/70/EC and 2009/28/EC of the European Parliament and of the Council (OJ 2012 L 205, p. 17). 25 Judgments of 17 May 1984, Denkavit Nederland (15/83, EU:C:1984:183, paragraph 15); of 12 July 2005, Alliance for Natural Health and Others (Joined Cases C‑154/04 and C‑155/04, EU:C:2005:449, paragraph 47); and of 12 July 2012, Association Kokopelli (C‑59/11, EU:C:2012:447, paragraph 80). See also the Opinion of Advocate General Bot in Ålands Vindkraft (C‑573/12, EU:C:2014:37), which proposed that Article 3(3) of Directive 2009/28 should be declared invalid on the grounds that it conferred on Member States the power to prohibit, or to restrict, access to their support schemes on the part of producers of green electricity whose sites were located in another Member State. 26 For example, in the judgment of 14 December 2004, Arnold André (C‑434/02, EU:C:2004:800, paragraph 59), the Court stated: ‘While the prohibition of marketing tobacco products for oral use under Article 8 of Directive 2001/37 constitutes one of the restrictions referred to in Article 28 EC, it is nevertheless justified, as indicated in paragraph 56 above, on grounds of the protection of human health. It cannot therefore, in any event, be regarded as having been adopted in breach of the provisions of Article 28 EC [now Article 34 TFEU].’ 27 According to settled case-law, ‘the EU legislature must be allowed broad discretion in an area such as that involved in the main proceedings, which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. Consequently, the legality of a measure adopted in that area can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institutions are seeking to pursue’. See, inter alia, judgments of 4 May 2016, Philip Morris Brand and Others (C‑547/14, EU:C:2016:325, paragraph 166), and of 10 December 2002, British American Tobacco (Investments) and Imperial Tobacco (C‑491/01, EU:C:2002:741, paragraph 123). 28 See points 45 and 46 of this Opinion. 29 It should be recalled that, in accordance with that provision: ‘When an economic operator provides proof or data obtained in accordance with an agreement or scheme that has been the subject of a decision pursuant to paragraph 4, to the extent covered by that decision, a Member State shall not require the supplier to provide further evidence of compliance with the sustainability criteria set out in Article 17(2) to (5) nor information on measures referred to in the second subparagraph of paragraph 3 of this Article.’ 30 Judgment of 1 July 2014, Ålands Vindkraft (C‑573/12, EU:C:2014:2037, paragraph 57 and the case-law cited). 31 Judgments of 12 October 2000, Ruwet (C‑3/99, EU:C:2000:560, paragraph 47), and of 18 September 2003, Bosal (C‑168/01, EU:C:2003:479, paragraphs 25 and 26). In the case of exhaustive harmonisation by directives which permit national measures providing for greater protection, the Court has also held that those measures must be compatible with the prohibition in Articles 34 TFEU to 36 TFEU (judgment of 16 December 2008, Gysbrechts and Santurel Inter, C‑205/07, EU:C:2008:730, paragraphs 33 to 35). 32 See, in particular, judgments of 11 July 1974, Dassonville (8/74, EU:C:1974:82, paragraph 5); of 1 July 2014, Ålands Vindkraft (C‑573/12, EU:C:2014:2037, paragraph 66); of 11 September 2014, Essent Belgium (C‑204/12 to C‑208/12, EU:C:2014:2192, paragraph 77); and of 29 September 2016, Essent Belgium (C‑492/14, EU:C:2016:732, paragraph 93). 33 See point 69 of this Opinion. 34 According to EO.N Biofor’s calculations, importing biogas by road from Germany to Sweden would be between 25 and 50 times more expensive than importing that sustainable biogas via pipeline. 35 See, inter alia, judgments of 1 July 2014, Ålands Vindkraft (C‑573/12, EU:C:2014:2037, paragraph 76), and of 11 December 2008, Commission v Austria (C‑524/07, EU:C:2008:717, paragraph 54). 36 According to the data provided by the parties, biogas for transport is a much less polluting fuel than petrol or diesel, since it emits up to 93% less carbon dioxide per unit of energy. 37 See judgments of 13 March 2001, PreussenElektra (C‑379/98, EU:C:2001:160, paragraph 73); of 11 September 2014, Essent Belgium (C‑204/12 to C‑208/12, EU:C:2014:2192, paragraph 91); and of 29 September 2016, Essent Belgium (C‑492/14, EU:C:2016:732, paragraph 84). 38 As expressly stated in recital 1 in the preamble to Directive 2009/28, increased use of renewable energy is an important part of the set of measures for reducing such emissions, complying with the Kyoto Protocol and making it possible to meet its targets more quickly. See judgments of 26 September 2013, IBV & Cie (C‑195/12, EU:C:2013:598, paragraph 56), and of 11 September 2014, Essent Belgium (C‑204/12 to C‑208/12, EU:C:2014:2192, paragraph 92). 39 Judgments of 13 March 2001, PreussenElektra (C‑379/98, EU:C:2001:160, paragraph 75), and of 1 July 2014, Ålands Vindkraft (C‑573/12, EU:C:2014:2037, paragraph 80). 40 Commission Implementing Decision (EU) 2016/708 of 11 May 2016 on the compliance of the ‘Austrian Agricultural Certification Scheme’ with the conditions set out in Directives 98/70/EC and 2009/28/EC of the European Parliament and of the Council (OJ 2016 L 122, p. 60). 41 Judgment of 1 July 2014 (C‑573/12, EU:C:2014:2037). 42 The national court did not include in its request for a preliminary ruling any questions on the interpretation of EU law applicable to the Swedish provision providing for favourable tax treatment for sustainable biogas to make its consumption competitive vis-à-vis that of gas from fossil fuels. 43 According to Sweden’s third progress report on the development of renewable energy pursuant to Article 22 of Directive 2009/28/EC, 22.12.2015, p. 77: ‘Of the proportion of biofuels sold in Sweden in 2014, more than 90% were certified as coming from one of the voluntary certification schemes that have been approved by the Commission. The biofuels that are not covered by certification include nationally produced biogas, for example’. 44 Judgment of 1 July 2014, Ålands Vindkraft (C‑573/12, EU:C:2014:2037, paragraphs 94 to 104). 45 See the Opinion of Advocate General Bot in Essent Belgium (C‑492/14, EU:C:2016:257, point 4), and the comments by Michel, V., ‘Marché intérieur et politiques de l’Union: brèves réflexions sur une quête d’unité’, L’identité du droit de l’Union européenne — Mélanges en l’honneur de Claude Blumann, Bruylant, Brussels, 2015, p. 229. 46 Judgment of 29 September 2016, Essent Belgium (C‑492/14, EU:C:2016:732).