ORDER OF THE GENERAL COURT (Fifth Chamber)
29 November 2021
(*)
(Action for annulment – State aid – Guidelines on certain State aid measures in the context of the system for greenhouse gas emission allowance trading post-2021 – Eligible sectors – Exclusion of the fertiliser manufacturing sector – Lack of direct concern – Inadmissibility)
In Case T‑726/20,
Grupa Azoty S.A.,
established in Tarnów (Poland),
Azomureș S.A., established in Târgu Mureş (Romania),
Lipasmata Kavalas LTD Ypokatastima Allodapis, established in Palaio Fáliro (Greece),
represented by D. Haverbeke, L. Ruessmann and P. Sellar, lawyers,
applicants,
v
European Commission, represented by A. Bouchagiar and G. Braga da Cruz, acting as Agents,
defendant,
APPLICATION under Article 263 TFEU for the annulment in part of the Communication from the Commission of 25 September 2020 entitled ‘Guidelines on certain State aid measures in the context of the system for greenhouse gas emission allowance trading post-2021’ (OJ 2020 C 317, p. 5),
THE GENERAL COURT (Fifth Chamber),
composed of D. Spielmann, President, U. Öberg and R. Mastroianni (Rapporteur), Judges,
Registrar: E. Coulon,
makes the following
Order
Background to the dispute
1        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 European Union and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32) established a system for greenhouse gas emission allowance trading within the European Union (‘the EU ETS’) in order to promote reductions of those emissions in a cost-effective and economically efficient manner. That directive was amended, inter alia, by Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87 to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814 (OJ 2018 L 76, p. 3), seeking, inter alia, to improve and extend the EU ETS for the 2021-2030 period.
2        Article 10a(6) of Directive 2003/87, as amended, is worded as follows:
‘Member States should adopt financial measures in accordance with the second and fourth subparagraphs in favour of sectors or subsectors which are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred from greenhouse gas emission costs passed on in electricity prices, provided that such financial measures are in accordance with State aid rules, and in particular do not cause undue distortions of competition in the internal market. …’
3        On 25 September 2020, the European Commission adopted the Communication entitled ‘Guidelines on certain State aid measures in the context of the system for greenhouse gas emission allowance trading post-2021’ (OJ 2020 C 317, p. 5; ‘the contested guidelines’), which, from 1 January 2021, replaces the Communication of 5 June 2012 entitled ‘Guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme post-2012’ (OJ 2012 C 158, p. 4, ‘the 2012 guidelines’) (see paragraph 64 of the contested guidelines).
4        The Commission states in paragraph 7 of the contested guidelines that it sets out in those guidelines the conditions under which aid measures in the context of the EU ETS may be considered compatible with the internal market under Article 107(3)(c) TFEU.
5        In paragraph 9 of the contested guidelines, the Commission states that the principles set out in those guidelines ‘apply only to the specific aid measures provided for in Articles 10a(6) and 10b of the Directive 2003/87/EC’.
6        Paragraph 21 of the contested guidelines states:
‘To limit the risk of competition distortion within the internal market, the aid must be limited to sectors that are exposed to a genuine risk of carbon leakage due to significant indirect costs that are actually incurred as a consequence of greenhouse gas emission costs being passed on in electricity prices. For the purpose of these Guidelines, a genuine risk of carbon leakage is considered to exist only if the beneficiary is active in a sector listed in Annex I.’
7        The applicants, Grupa Azoty S.A., Azomureș SA and Lipasmata Kavalas LTD Ypokatastima Allodapis, are undertakings which are active in the sector of the manufacture of nitrogen compounds and fertilisers, currently falling under the NACE code 20.15.
8        That sector is not on the list in Annex I to the contested guidelines (‘Annex I’), although it was included on the list in Annex II to the 2012 guidelines, which were applicable until 31 December 2020.
Procedure and forms of order sought
9        By application lodged at the Court Registry on 15 December 2020, the applicants brought the present action.
10      On 21 December 2020, the applicants, in accordance with Article 66 of the Rules of Procedure of the General Court, submitted a reasoned application for the content of certain documents annexed to the application not to be cited in the documents relating to the present case to which the public has access.
11      By separate document lodged at the Court Registry on 1 March 2021, the Commission raised a plea of inadmissibility under Article 130(1) of the Rules of Procedure.
12      By document lodged at the Court Registry on 24 March 2021, the EFTA Surveillance Authority applied to intervene in the present proceedings in support of the form of order sought by the Commission. Consideration of that application to intervene was suspended in accordance with Article 144(3) of the Rules of Procedure.
13      The applicants submitted their observations on the plea of inadmissibility on 19 April 2021. On the following day, they submitted a reasoned application, in accordance with Article 66 of the Rules of Procedure, for the content of certain documents annexed to those observations not to be cited in the documents relating to the present case to which the public has access.
14      The applicants claim, in essence, that the Court should:
–        declare the action admissible;
–        annul Annex I;
–        in the alternative, order, in accordance with Article 264 TFEU, that the effects of Annex I be continued until such time as the Commission takes the
necessary measures to comply with the Court’s judgment, pursuant to Article 266 TFEU;
–        order the Commission to pay the costs.
15      The Commission contends that the Court should:
–        dismiss the action as inadmissible;
–        order the applicants to pay the costs.
Law
16      Under Article 130(1) and (7) of the Rules of Procedure, the Court may, if the defendant so requests, decide on inadmissibility or lack of competence without going to the substance of the case. In the present case, since the Commission has applied for a decision on inadmissibility, the Court, finding that it has sufficient information from the documents in the case file, has decided to rule on that application without taking further steps in the proceedings.
17      The Commission contends that the present action is inadmissible on the ground that the applicants do not have standing to bring proceedings, for the purposes of the fourth paragraph of Article 263 TFEU, since they are not directly concerned by the contested guidelines. According to the Commission, first, the nature of the contested guidelines is such that none of the applicants could satisfy the requirement that the guidelines be of direct concern to them and, secondly, those guidelines require implementing measures. Given that under EU law the Member States cannot be obliged to grant aid within the meaning of Article 107(1) TFEU and that it is for the Member States to decide on measures they will put in place with a view to granting aid to the sectors at risk of carbon leakage due to indirect emission costs, the applicants cannot be directly concerned by the contested guidelines and, consequently, cannot be entitled to bring proceedings under the second and final limbs of the fourth paragraph of Article 263
TFEU. In addition, the Commission argues that the action is inadmissible in so far as the applicants seek the annulment of one part of the contested guidelines, Annex I, which is not severable from the rest of the guidelines.
18      For their part, the applicants submit that it is common ground that the contested guidelines are a regulatory act, within the meaning of the final limb of the fourth paragraph of Article 263 TFEU. As regards the condition relating to direct concern, they submit that the two cumulative criteria on which that condition is based are satisfied in the present case since the contested guidelines, first, directly affect their legal situation and, secondly, leave no discretion to their addressees.
19      As regards more specifically the first condition determining direct concern, the applicants submit, first, that since from 1 January 2021 the contested guidelines have excluded their sectors from those listed in Annex I, they have lost the lawful opportunity to receive compensation for their indirect emission costs under Article 10a(6) of Directive 2003/87. Secondly, they submit that the contested guidelines put them at a competitive disadvantage compared with competitors using mostly fossil fuels in their production process, which will continue to receive free allowances for the greenhouse gases they emit, with the result that the contested guidelines will affect those competitors only marginally. Thirdly, the entry into force of the contested guidelines, in so far as they have made it impossible for the applicants to obtain aid other than by way of an alleged legal exception to Article 10a(6) of Directive 2003/87 and Annex I, has brought about a change in their legal situation in relation to the period prior to 31 December 2020.
20      As regards the second condition determining direct concern, the applicants submit that the contested guidelines leave no discretion as to the manner in which they should be implemented. Since the Commission is bound by the guidelines which it adopts, which it has moreover recognised, and from which it can depart only in exceptional circumstances, which cannot be envisaged in the present case, the Member States do not, in essence, have any discretion to avoid the provisions of Annex I.
21      In that regard, the applicants submit that the case-law relied on by the Commission in support of the line of argument that the guidelines are not binding on Member States cannot be applied to the present case. In contrast to the communication and guidelines examined in the cases which gave rise, respectively, to the judgment of 19 July 2016, Kotnik and Others (C‑526/14, EU:C:2016:570), and to the orders of 23 November 2015, Milchindustrie-Verband and Deutscher Raiffeisenverband v Commission (T‑670/14, EU:T:2015:906), and of 23 November 2015, EREF v Commission (T‑694/14, not published, EU:T:2015:915), the contested guidelines are essentially normative in nature in that they simply exclude certain sectors from the benefit of Article 10a(6) of Directive 2003/87 and deprive Member States of the possibility to reverse the presumption that certain sectors do not face a risk of carbon leakage due to the indirect costs of emissions. In accordance with Annex I, only the sectors listed therein are eligible for aid, which has the effect of depriving Member States of any discretion to grant compensation to the sectors not on that list.
22      Ultimately, the contested guidelines directly affect the applicants’ legal situation, since, in essence, the Member States are bound to comply with them. Moreover, they distort competition between the applicants and those undertakings within the same sector which are not as dependent on compensation for the costs of their indirect emissions under Article 10a(6) of Directive 2003/87. The contested guidelines are non-binding in name only since the wording of their provisions, the context in which they were adopted and the fact that the Commission is obliged to apply them nullify any discretion that Member States could have enjoyed in other circumstances. Accordingly, no Member State can reasonably notify a compensation mechanism for the post-2021 period in favour of sectors that are ineligible pursuant to Annex I.
23      In addition, the applicants argue that the guidelines do not entail implementing measures. First, since the former compensation regimes were authorised only until 31 December 2020, the Member States do not have to take any action to discontinue those regimes. Secondly, in view of the fact that the Member States will only notify compensation mechanisms that are compatible with Annex I, the Commission will not have to take any decision requiring a Member State to limit the eligible sectors.
24      In the alternative, the applicants also argue that the contested guidelines are of direct and individual concern to them, under the second limb of the fourth paragraph of Article 263 TFEU.
25      Furthermore, as regards the plea of inadmissibility based on the non-severable nature of the contested guidelines, the applicants reply that it is clear from the provisions of Directive 2003/87, as amended, and from the contested guidelines themselves, that Annex I is severable. Thus, the only consequence of the annulment of Annex I would be the removal of a list that pre-determines which sectors are exposed to a risk of carbon leakage due to indirect emission costs and would not relieve the Member States of the requirement to grant aid only to those sectors.
26      First of all, it should be recalled that the admissibility of an action brought by natural or legal persons against an act which is not addressed to them, in accordance with the fourth paragraph of Article 263 TFEU, is subject to the condition that they be accorded standing to bring proceedings, which arises in two situations. First, such proceedings may be instituted if the act is of direct and individual concern to those persons. Secondly, such persons may bring proceedings against a regulatory act not entailing implementing measures if that act is of direct concern to them (see judgment of 15 July 2021, Deutsche Lufthansa v Commission, C‑453/19 P, EU:C:2021:608, paragraph 31 and the case-law cited).
27      It is, therefore, necessary to examine whether the applicants, which are not addressees of the contested guidelines, fall within either of the two situations referred to in paragraph 26 above
with regard to those guidelines. Since both the situations are conditional on the applicants being directly concerned by the contested act, that criterion must be examined first.
28      In that regard, it must be noted at the outset that the terms ‘of direct concern to them’ appear in identical terms in both situations set out in the fourth paragraph of Article 263 TFEU. It has already been held that the concept of direct concern entailed by the second of the two situations cannot be subject to a more restrictive interpretation than that of the first situation. Indeed, in the present case, there is no reason for considering that the condition of being directly concerned should be subject to a less restrictive interpretation in the event that the contested guidelines were, as the applicants claim, to constitute a regulatory act which does not entail implementing measures (see, to that effect, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraph 17 and the case-law cited).
29      It is settled case-law that the condition that a natural or legal person must be directly concerned by the act against which the action is brought, laid down in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met, namely, first, the contested act must directly affect the legal situation of the individual and, secondly, it must leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules (see judgment of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and
Commission v Ferracci, C‑622/16 P to C‑624/16 P, EU:C:2018:873, paragraph 42 and the case-law cited).
30      The same applies where the opportunity for such addressees not to give effect to the EU measure is purely theoretical and their intention to act in conformity with it is not in doubt (see, to that effect, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraph 20 and the case-law cited).
31      It is, therefore, necessary to examine in the present case whether the contested guidelines directly affect the applicants’ legal situation in such a way.
32      As a preliminary point, it must be borne in mind that the Commission may adopt guidelines on the exercise of its powers of assessment, particularly in State aid matters and that, in so far as those guidelines do not contradict Treaty rules, the policy rules which they contain are to be followed by that institution (see judgment of 13 June 2002, Netherlands v Commission, C‑382/99, EU:C:2002:363, paragraph 24 and the case-law cited).
33      In accordance with settled case-law, in adopting such rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of those powers of assessment and, in principle, cannot depart from those rules, without being found, where appropriate, to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see judgment of 3 September 2020, Vereniging tot Behoud van Natuurmonumenten in Nederland and Others v Commission, C‑817/18 P, EU:C:2020:637, paragraph 100 and the case-law cited). That said, the Commission cannot waive, by the adoption of those rules, the exercise of the discretion that Article 107(3)(c) TFEU confers on it, with the result that the adoption of guidelines such as the contested guidelines does not relieve it of its obligation to examine the specific exceptional circumstances relied on by a Member State, in a particular case, for the purpose of requesting the direct application of Article 107(3)(c) TFEU and to provide reasons for its refusal to grant such a request (see, to that effect and by analogy, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 41 and the case-law cited).
34      In the present case, the Commission, by adopting the contested guidelines, has therefore taken on the commitment, which is in principle binding, to exercise the discretion available to it in order to assess the compatibility with the internal market of the aid falling within the scope of those guidelines. More specifically, the Commission has committed itself to consider as compatible with the internal market only an aid measure granted by a Member State to one of the sectors listed in Annex I, in that the Commission considers that there is a genuine risk of carbon leakage due to the costs of indirect emissions for undertakings which are active in those sectors.
35      However, those considerations do not ipso facto mean that the applicants are directly concerned by the contested guidelines.
36      As regards, first of all, undertakings benefiting from aid under Article 10a(6) of Directive 2003/87 notified by a Member State to the Commission, and in respect of which the Commission is yet to adopt a decision on its compatibility with the internal market before the date from which the contested guidelines became applicable, it is true that, in accordance with paragraphs 65 and 66 of those guidelines, the latter apply from 1 January 2021 until 31 December 2030 to all aid measures on which the Commission is called upon to take a decision, even to those that were notified before the first of those dates. However, the Commission may apply the contested guidelines relating to such aid only by means of one of the decisions provided for by Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9). Those are the decisions that could affect the applicants directly by finding that the aid measure in their favour is not compatible with the internal market on the ground that it does not satisfy the criteria and conditions laid down in the contested guidelines. The applicants could thus contest the legality of those decisions before the Court and, inter alia, claim that the measure at issue should be considered compatible with the internal market (see, to that effect and by analogy, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraph 25).
37      Next, with regard to undertakings benefiting from aid under Article 10a(6) of Directive 2003/87, which may be considered by the Commission to be unlawful aid in so far as it was granted before being notified, and which is examined by the Commission after the date from which the contested guidelines become applicable, it must be pointed out that the Commission would not assess the compatibility of such aid under the contested guidelines but, in accordance with the Commission notice on the determination of the applicable rules for the assessment of unlawful State aid (OJ 2002 C 119, p. 22), would do so under the 2012 guidelines (see paragraph 66 of the contested guidelines). Furthermore, as noted in paragraph 36 above, it would still do that by means of one of the decisions provided for by Regulation 2015/1589, with the applicants being capable of being affected directly only by such a decision, which they could, should the case arise, challenge before the Court (see, to that effect and by analogy, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraph 27).
38      Lastly, it should be pointed out, as the Commission has noted, that if a Member State decides not to put in place any aid measure covered by the contested guidelines, the Commission will not be able to take any type of decision under Regulation 2015/1589. In such a situation, it must be held that the contested guidelines cannot have any effect on the applicants’ legal situation.
39      Moreover, it has been held that such a decision would be a sovereign decision of the Member State concerned. The fact that the contested guidelines exist does not preclude a Member State from notifying the Commission of new aid which does not satisfy the criteria and conditions set out in those guidelines (see, to that effect and by analogy, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraphs 28 and 29).
40      In the present case, as the Commission rightly points out, even if a genuine risk of carbon leakage has been regarded in the contested guidelines as existing only where the beneficiary of the aid was active in one of the sectors listed in Annex I, that cannot preclude Member States, from a legal point of view, from notifying the Commission of aid measures in favour of undertakings which are active in sectors or subsectors other than those listed in Annex I.
41      It is true that, as the applicants claim, a Member State may not always be ready to take the risk of notifying the Commission of aid measures not fully in line with the contested guidelines, since, in certain circumstances, a smooth and swift approval of the notified aid may be of particular importance. Nevertheless, those are considerations of expediency which may be relevant for the adoption of policy decisions by a Member State, but cannot affect the nature and effects of an EU act, as stemming from the rules of the Treaties. What is key is that, from a legal point of view, a Member State might be able to show that, despite the non-fulfilment of any of the criteria laid down in the contested guidelines, aid to an undertaking operating in a sector other than those listed in Annex I still meets one of the requirements of Article 107(3)(c) TFEU (see, to that effect and by analogy, Opinion of Advocate General Wahl in Kotnik and Others, C‑526/14, EU:C:2016:102, points 43 and 44).
42      While it is true that it is very probable that, in applying the contested guidelines, the Commission would, on the basis of Article 9(5) of Regulation 2015/1589, adopt a decision finding the intended State aid to be incompatible with the internal market, the fact remains that only that decision, as the case may be, would be capable of having direct legal effects on the undertakings that ought to have benefited from the State aid. Accordingly, those undertakings could, just like the Member State concerned, challenge the merits of such a decision before the Court and, inter alia, claim that the aid at issue should be considered compatible with the internal market (see, to that effect and by analogy, order of 23 November 2015, EREF v Commission, T‑694/14, not published, EU:T:2015:915, paragraph 29).
43      Ultimately, in such situations, it is decisions adopted by the Commission under Regulation 2015/1589 which could directly affect the applicants by finding that the aid from which they would benefit is not compatible with the internal market.
44      The plea of inadmissibility raised by the Commission must, therefore, be upheld.
45      That conclusion cannot be called into question by the applicants’ argument that the principles identified in the case-law on which the Commission has relied (see paragraph 21 above) cannot be applied to the present case since, in contrast to the contested guidelines, the communication and the guidelines at issue in the cases which gave rise to that case-law provide the Commission and the Member States with some leeway. Indeed, irrespective of any alleged difference between those Commission acts and the contested guidelines, it must be pointed out that, as has already been stated in paragraphs 36 to 43 above, the contested guidelines do not have any direct effects with regard to the applicants and are not in themselves capable of preventing Member States from notifying aid measures for undertakings active in sectors or subsectors other than those listed in Annex I.
46      Furthermore, even if, as the applicants claim, the contested guidelines may have led to a distortion of competition in the sectors concerned, that factor, which could, depending on the circumstances, be relevant in assessing the locus standi of a competitor to a recipient of aid seeking to challenge the lawfulness of that aid, is not capable by itself of altering the fact that the contested guidelines do not directly concern the applicants.
47      In the light of the foregoing, given that the Member States cannot be required to grant aid within the meaning of Article 107(1) TFEU and that it is for them to decide what measures they will put in place with a view to granting aid to sectors and subsectors exposed to a risk of carbon leakage due to the costs of indirect emissions, it must be found that the applicants are not directly concerned by the contested guidelines.
48      Since the applicants are not directly affected by the contested guidelines, there is no need to examine whether there are any implementing measures or whether, as claimed in the alternative, the applicants are individually concerned.
49      It must, therefore, be found that the applicants do not have standing to bring proceedings against the contested guidelines under the fourth paragraph of Article 263 TFEU.
50      In the light of all the foregoing considerations, the plea of inadmissibility raised by the Commission must be upheld and, accordingly, the action must be dismissed as inadmissible, and there is no need to rule on the other ground of inadmissibility raised by the Commission.
51      Furthermore, since the action is inadmissible, there is no longer any need to adjudicate on the applications for confidential treatment submitted by the applicants or, pursuant to Article 142(2) of the Rules of Procedure, on the application for leave to intervene submitted by the EFTA Surveillance Authority.
Costs
52      Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
53      Since the applicants have been unsuccessful, they must be ordered, in addition to bearing their own costs, to pay the costs incurred by the Commission, in accordance with the form of order sought by the Commission.
54      In addition, under Article 144(10) of the Rules of Procedure, where the proceedings in the main case are concluded before an application to intervene has been decided, the applicant for leave to intervene and the main parties are each to bear their own costs relating to the application to intervene. Consequently, the EFTA Surveillance Authority must bear its own costs relating to the application for leave to intervene. As is apparent from paragraph 12 above, the applicants and the Commission have not incurred any costs in that regard.
On those grounds,
THE GENERAL COURT (Fifth Chamber)
hereby orders:
1.      The action is dismissed as inadmissible.
2.      There is no longer any need to adjudicate on the application to intervene submitted by the EFTA Surveillance Authority.
3.      Grupa Azoty S.A., Azomureș S.A. and Lipasmata Kavalas LTD Ypokatastima Allodapis shall bear their own costs and pay those incurred by the European Commission.
4.      The EFTA Surveillance Authority shall bear the costs relating to its application to intervene.
Luxembourg, 29 November 2021.
E. Coulon
D. Spielmann
Registrar
President
*      Language of the case: English.