Judgment — ECLI:EU:C:2018:483
Date: 2018-06-21
Language of the case: Polish
Court formation: Second Chamber
Subject matter: Environment
Procedure: Action for annulment - unfounded
Origin: Poland

summary report, available online, or a public information notice. In addition, according to the information available to the Court, matters relating to the setting of thresholds or the start date for the MSR were discussed. The institutions which adopted the contested decision therefore seem to have shown satisfactorily that in adopting the decision they actually exercised their discretion, which presupposes the taking into consideration of all the relevant factors and circumstances of the situation the decision was intended to regulate. (55) I would note, lastly, that the Parliament, the Council or the Commission cannot be criticised for not taking into account the applicant’s alleged particular situation with regard to the carbon market. The Court has already rejected a similar argument on the ground that the measure in question ‘has an impact in all Member States and requires that a balance between the different interests involved is ensured, taking account of the objectives of that [measure]. Therefore, the attempt to strike such a balance, taking into account not the particular situation of a single Member State, but that of all EU Member States, cannot be regarded as being contrary to the principle of proportionality’. (56) 55. As regards the complaint alleging an infringement of the principle of proportionality, it should be noted that that principle ‘is one of the general principles of European Union law and requires that measures implemented through European Union law provisions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them’. (57) The Court has also held that, ‘[w]ith regard to judicial review of those conditions, however, the European Union legislature must be allowed a broad discretion when it is asked to intervene in an area which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. In its judicial review of the exercise of such powers, the Court cannot substitute its own assessment for that of the European Union legislature. It could, at most, find fault with its legislative choice only if it appeared manifestly incorrect or if the resultant disadvantages for certain economic operators were wholly disproportionate to the advantages otherwise offered’. (58) It has further recognised that ‘the introduction of an EU-wide scheme for accounting and trading of carbon dioxide equivalent emission allowances was a legislative choice which translated a political orientation in a context of urgency in addressing serious environmental concerns … That legislative choice was, moreover, based on highly complex and lengthily debated economic and technical considerations … In order to contribute towards the fulfilment of their commitments by the European Union and its Member States under the Kyoto Protocol, the European Union legislature was thus led to consider itself the future, uncertain effects of its action’. (59) As I stated above, (60) the Court has already had occasion to affirm the complexity of the ETS. 56. It therefore seems that the Court could find fault with the disproportionality of the contested decision only if the EU legislature made a manifest error. However, that is not the case here. Once the objective actually pursued has been identified — which has already been done, to a large extent, in the analysis of the first plea in law — I will establish that the contested decision appears to be an appropriate measure for attaining that objective, which does not go beyond what is necessary and does not subject the economic operators concerned to disadvantages disproportionate to the advantages of the decision. 57. As regards the objective pursued, the applicant has focused its arguments on an incorrect analysis. It is very simplistic to claim that the contested decision has no aim other than to ensure that the EU achieves the emissions reduction targets set by international commitments and, in particular, the target fixed for the year 2020. The EU has never hidden its intention to go further than the internationally set targets, as is clearly expressed in Directive 2009/29 in particular. (61) In any event, the objective pursued by the legislature and identified in determining the legal basis for the measure in question may not be different from the objective on the basis of which the examination of observance of the principle of proportionality must be conducted. I would therefore reiterate (62) that, in my view, the contested decision was conceived as a means to stabilise the carbon market which is known to have a surplus of allowances and as an instrument to respond to the various threats preventing the ETS from operating in an efficient manner in the long term. (63) 58. In the light of that objective, and taking into account the data available to the institutions at the time when they took action, I cannot identify any manifest error of assessment, which is the only ground for finding fault. 59. The 2012 Commission report (64) had highlighted the structural imbalance affecting the ETS which necessitated legislative intervention to restore its proper functioning. As I have explained, that legislative intervention resulted in the establishment of a reserve in which surplus allowances will be placed temporarily while the allowance market regains its balance. In the event that this balance is jeopardised not by a surplus of allowances but by a deficit of allowances, the reserve will release onto the market the allowances which have been temporarily placed in it. Such a mechanism therefore proves to be perfectly appropriate for the objective pursued of reducing the volatility of the allowance market. It should also be noted that the withdrawal of allowances is temporary and that the MSR will not start to operate until 2019. The legislature thus allowed operators more than three years to make preparations. 60. Accordingly, the legislative choice made by the legislature does not appear to be manifestly incorrect. Furthermore, the Republic of Poland has not demonstrated that the resultant disadvantages for certain economic operators were disproportionate to the advantages otherwise offered in accordance with the abovementioned case-law (65) because, first, there is no direct link between the MSR and the formation of the price of allowances and, second, the main objective — it should be recalled — is to stabilise the price of allowances. 61. For these reasons, the fourth and fifth pleas in law should be rejected as unfounded. Conclusions of the analysis 62. Having concluded that all the pleas in law raised by the applicant should be rejected, I suggest that the Court dismiss the action in its entirety. Costs 63. Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Parliament and the Council have applied for costs, the Republic of Poland must be ordered to pay the costs incurred by those two institutions. 64. Furthermore, under Article 140(1) of the Rules of Procedure, the Kingdom of Denmark, the Kingdom of Spain, the French Republic, the Kingdom of Sweden and the Commission, as interveners, must bear their own costs. Conclusion 65. In the light of the foregoing considerations, I propose that the Court: (1) dismiss the action; (2) order the Republic of Poland to pay the costs incurred by the European Parliament and the Council of the European Union; (3) order the Kingdom of Denmark, the Kingdom of Spain, the French Republic, the Kingdom of Sweden and the European Commission to bear their own costs. 1 Original language: French. 2 OJ 2015 L 264, p. 1. 3 OJ 2003 L 275, p. 32. Unless otherwise stated, whenever I make reference to Directive 2003/87 in this Opinion, I am referring to the original, unamended version of that directive. 4 OJ 2009 L 140, p. 63. 5 See in particular recital 2 of Directive 2003/87. 6 Recital 3 of Directive 2009/29. 7 See Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87 (OJ 2010 L 302, p. 1), Decision No 377/2013/EU of the European Parliament and of the Council of 24 April 2013 derogating temporarily from Directive 2003/87 (OJ 2013 L 113, p. 1) and Commission Regulation (EU) No 176/2014 of 25 February 2014 amending Regulation No 1031/2010 in particular to determine the volumes of greenhouse gas emission allowances to be auctioned in 2013-20 (OJ 2014 L 56, p. 11). 8 COM(2012) 652 final of 14 November 2012. 9 In the end the Federal Republic of Germany did not lodge a statement in intervention or make submissions during the oral phase of these proceedings. 10 The applicant refers in particular to the Commission Staff Working Document ‘Impact assessment accompanying the document Proposal for a Decision of the European Parliament and of the Council concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC’ (‘the impact assessment’) (SWD/2014/017 final, p. 53). 11 Judgment of 3 October 2013, Commission v Latvia (C‑267/11 P, EU:C:2013:624, paragraph 58). 12 The applicant refers to the judgments of 23 February 1999, Parliament v Council (C‑42/97, EU:C:1999:81), and of 12 December 2002, Commission v Council (C‑281/01, EU:C:2002:761), and the Opinion of Advocate General Kokott in Commission v Latvia (C‑267/11 P, EU:C:2013:46). 13 See Annex C1 of the reply of the Republic of Poland. 14 See, among many others, judgments of 30 January 2001, Spain v Council (C‑36/98, EU:C:2001:64, paragraphs 58 and 59); of 6 September 2012, Parliament v Council (C‑490/10, EU:C:2012:525, paragraphs 44 and 45); and of 11 June 2014, Commission v Council (C‑377/12, EU:C:2014:1903, paragraph 34). 15 The Opinion of Advocate General Kokott in Commission v Latvia (C‑267/11 P, EU:C:2013:46), in particular point 58 thereof, on which the parties rely, does not seem to have carried out an examination other than of the aim and the content of the measure. That point merely states, with regard to the legal basis of Directive 2003/87, that ‘[t]he Commission was not … permitted … to interpret or apply Directive 2003/87 in such a way that the primary result of the application of the directive would be that it had a significant effect on a Member State’s choice between different energy sources and the general structure of its energy supply. By contrast, its legal basis would not be called into question if such an effect, even where it is significant, were only a secondary component or aim, a kind of side-effect of the directive’ (italics added). 16 Judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others (C‑127/07, EU:C:2008:728, paragraphs 31 to 33). See also judgment of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka (C‑203/12, EU:C:2013:664, paragraph 26). 17 See judgment of 22 June 2016, DK Recycling und Roheisen v Commission (C‑540/14 P, EU:C:2016:469, paragraph 49 and the case-law cited). 18 Recital 1 of the contested decision. 19 EUCO/69/14 of 24 December 2014. 20 Paragraph 2.3 of the conclusions of the European Council, reiterated in recital 2 of the contested decision. 21 See page 5 of the 2012 Commission report. 22 See page 6 of the 2012 Commission report. 23 See page 7 of the 2012 Commission report. 24 Article 1(1) of the contested decision. 25 Article 1(2) of the contested decision. 26 Article 1(5) of the contested decision. 27 See also Article 1(5) of the contested decision. 28 Recital 4 of the contested decision. 29 In the words of the first indent of Article 191(1) TFEU. 30 See footnote 19 of this Opinion. 31 The applicant refers to a statement made by itself, the Republic of Bulgaria, the Republic of Croatia, Hungary and Romania at a meeting of the Environment Council held on 18 September 2015. 32 See paragraph 2.3 of the conclusions of the European Council of 23 and 24 October 2014. 33 See Proposal for a decision of the European Parliament and of the Council concerning the establishment and operation of a [MSR] for the Union greenhouse gas [ETS] and amending Directive 2003/87 (COM(2014)20 final of 22 January 2014). 34 At the most it can act, where the treaty so provides, to attempt to unblock the legislative process; see, in particular, Article 48, Article 82(3), Article 86(1) and Article 87(3) TFEU. 35 See Article 1 of Regulation No 176/2014. 36 See, among many others, judgment of 11 June 2015, Berlington Hungary and Others (C‑98/14, EU:C:2015:386, paragraph 77 and the case-law cited). 37 See judgment of 11 June 2015, Berlington Hungary and Others (C‑98/14, EU:C:2015:386, paragraph 79). 38 See Article 1 of the contested decision. 39 See, among many others, judgment of 15 July 2004, Di Lenardo and Dilexport (C‑37/02 and C‑38/02, EU:C:2004:443, paragraph 70), and order of 4 July 2013, Menidzherski biznes reshenia (C‑572/11, not published, EU:C:2013:456, paragraph 29). 40 Judgment of 11 June 2015, Berlington Hungary and Others (C‑98/14, EU:C:2015:386, paragraph 78 and the case-law cited). 41 Judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others (C‑127/07, EU:C:2008:728, paragraph 60). With regard to the complexity of the area of action, see also judgment of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka (C‑203/12, EU:C:2013:664, paragraph 36). 42 See judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others (C‑127/07, EU:C:2008:728, paragraph 57). 43 See judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others (C‑127/07, EU:C:2008:728, paragraph 62). 44 It should also be noted that the linear factor is itself subject to modification; see Article 9 of Directive 2003/87 as amended by Directive 2009/29. 45 See footnote 33 of this Opinion. 46 The title of Regulation No 176/2014 makes reference to the period 2013-2020, while the body of the regulation mentions the 2014-2020 period (see recital 3 of Regulation No 176/2014) then 2014-2016 (see Article 1 of Regulation No 176/2014). If the relevant period is 2013-2020, it must be stated that Regulation No 176/2014, which entered into force immediately (see recital 7 and Article 2 of Regulation No 176/2014), was adopted during that period in order to amend the rules governing its operation. 47 I am thinking in particular of the 2012 Commission report, the various amendments made to Directive 2003/87 by the legislature itself and the more specific action taken by the Commission within the scope of its implementing power. 48 OJ 2003 C 321, p. 1. The applicant also relies on the Interinstitutional Agreement on impact assessment in law-making (Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Better regulation for better results — An EU agenda, COM(2015) 215 final). 49 Commission Staff Working Document ‘Better Regulation Guidelines’ (SWD(2015) 111 final of 19 May 2015). 50 See judgment of 7 September 2006, Spain v Council (C‑310/04, EU:C:2006:521, paragraph 122). 51 Judgment of 4 May 2016, Pillbox 38 (C‑477/14, EU:C:2016:324, paragraph 65 and the case-law cited). 52 Judgment of 4 May 2016, Pillbox 38 (C‑477/14, EU:C:2016:324, paragraph 66). 53 See paragraphs 7.2, 7.4, 7.4.1, 7.4.2 and 7.5 of the impact assessment. 54 The study conducted by the UK representation was published. 55 See, by analogy, judgment of 7 September 2006, Spain v Council (C‑310/04, EU:C:2006:521, paragraph 122). 56 Judgment of 18 June 2015, Estonia v Parliament and Council (C‑508/13, EU:C:2015:403, paragraph 39). 57 Judgment of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka (C‑203/12, EU:C:2013:664, paragraph 34 and the case-law cited). 58 Judgment of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka (C‑203/12, EU:C:2013:664, paragraph 35 and the case-law cited). 59 Judgment of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka (C‑203/12, EU:C:2013:664, paragraph 36). 60 See point 40 of this Opinion. 61 See, in particular, recitals 4 to 6 of Directive 2009/29. The European Council considers that the reduction targets set internationally may be exceeded; see its conclusions of 23 and 24 October 2014, cited in point 22 of this Opinion. 62 See point 19 et seq. of this Opinion. 63 See again recital 5 of the contested decision. 64 See point 22 of this Opinion. 65 See point 55 of this Opinion.