62019TJ0825_RES
Joined cases T‑825/19 and T‑826/19
Tazzetti SpAandTazzetti SA
v
European Commission
Judgment of the General Court (First Chamber, Extended Composition), 22 March 2023
(Environment ‐ Regulation (EU) No 517/2014 ‐ Fluorinated greenhouse gases ‐ Electronic registry for quotas for placing hydrofluorocarbons on the market ‐ Undertakings with the same beneficial owner ‐ Single producer or importer ‐ Act having an adverse effect ‐ Interest in bringing proceedings ‐ Admissibility ‐ Request to modify the application ‐ Inadmissibility ‐ Plea of illegality ‐ Interpretation of an implementing regulation consistent with the basic regulation ‐ Implementing power of the Commission)
Action for annulment – Natural or legal persons – Interest in bringing proceedings – Need for a vested and present interest – Assessment at the time when the action was brought – Action capable of securing a benefit for the applicant
(Art. 263, fourth para., TFEU)
(see paragraphs 45, 49-53, 111-122)
Action for annulment – Actionable measures – Preparatory measures – Precluded – Commission decision granting a company the right to be allocated hydrofluorocarbon quotas and refusing that right to another company with the same beneficial owner – Act producing independent legal effects – Included
(Art. 263, first para., TFEU; European Parliament and Council Regulation No 517/2014)
(see paragraphs 75, 76, 87-92, 96-99, 104, 108)
Environment – Atmospheric pollution – Reduction of fluorinated greenhouse gas emissions – Regulation No 517/2014 – Allocation of quotas for placing hydrofluorocarbons on the market – Allocation mechanism based on the establishment of reference values – Procedure for recalculating reference values – Commission implementing regulation treating undertakings with the same beneficial owner as one single producer or importer for the purposes of that recalculation – Scope
(European Parliament and Council Regulation No 517/2014, Art. 16(2) and (3); Commission Regulation 2019/661, Art. 7(1))
(see paragraphs 138-141)
Environment – Atmospheric pollution – Reduction of fluorinated greenhouse gas emissions – Regulation No 517/2014 – Allocation of quotas for placing hydrofluorocarbons on the market – Implementing power conferred on the Commission – Scope – Adoption of an implementing regulation amending the rights of undertakings to receive an allocation of quotas and to transfer those quotas – Lack of competence
(Art. 291(2) TFEU; European Parliament and Council Regulation No 517/2014, Arts 16(3), 17(2) and 18(1) and Annex VI, para. 1; Commission Regulation 2019/661, Art. 7(1))
(see paragraphs 154-161, 165, 166, 184-207, 210, 211)
Résumé
In the context of the campaign against greenhouse gas emissions, the European Parliament and the Council of the European Union adopted Regulation No 517/2014 on fluorinated greenhouse gases, (
1
) which aims to limit the quantities of hydrofluorocarbons (HFCs) placed on the EU market. In accordance with that regulation, the European Commission is responsible for determining a maximum quantity of HFCs that can be placed on the market each year and for allocating quotas to producers and importers according to an allocation mechanism that is based, inter alia, on the establishment of reference values. In that connection, the regulation states that the reference values are initially attributed to producers and importers who reported having placed HFCs on the market between 2009 and 2012. From 2017 and every three years thereafter, the Commission is to recalculate the reference values on the basis of the annual average of the quantities of HFCs lawfully placed on the market from 1 January 2015.
According to the provisions of Regulation No 517/2014, the Commission is also to set up an electronic registry for quotas for placing HFCs on the market (‘the HFC registry’). In order to ensure the smooth functioning of that registry, the Commission adopted Implementing Regulation 2019/661. (
2
)
In order to prevent any circumvention or abuse of the requirements for allocations of HFC quotas, Article 7(1) of Implementing Regulation 2019/661 provides, inter alia, that all undertakings with the same beneficial owner(s) are to be considered as one single importer or producer for the purpose of recalculating the reference values in accordance with Regulation No 517/2014.
In 2008, Tazzetti SpA, a company incorporated under Italian law that places HFCs on the EU market, acquired a company incorporated under Spanish law that also places HFCs on the market. The Commission informed that company and Tazzetti SpA, by letters of 27 and 30 September 2019 and of 20 November 2019 (together, ‘the contested decisions’), that, because those two undertakings had the same beneficial owner, only Tazzetti SpA could now receive HFC quotas under Article 7(1) of Implementing Regulation 2019/661.
Tazzetti SpA and the acquired company took the view that the Commission had acted ultra vires by adopting Article 7(1) of Implementing Regulation 2019/661 and brought two actions for annulment of the contested decisions before the General Court. In support of those actions, the applicants claim that, while the Commission’s implementing power is limited to the smooth functioning of the HFC registry, Article 7(1), referred to above, altered the very functioning of the HFC quota mechanism established by Regulation No 517/2014.
The First Chamber (Extended Composition) of the General Court upholds those actions and clarifies the scope of the Commission’s implementing power as regards the system for the allocation of HFC quotas established by Regulation No 517/2014.
Findings of the Court
The Court begins by finding that, contrary to the applicants’ arguments, it is clear and unambiguous from the wording of Article 7(1) of Implementing Regulation 2019/661 that that provision applies to all producers and importers subject to the procedure for recalculating the reference values and that no derogation is provided for in favour of incumbent undertakings, namely those that, like the applicants, reported having placed HFCs on the market between 2009 to 2012.
Having made that clarification, the General Court examines whether, by adopting Article 7(1) of Implementing Regulation 2019/661, the Commission exceeded the implementing power conferred on it by Regulation No 517/2014 and Article 291 TFEU. (
3
) In that connection, the General Court examines the applicants’ arguments that the Commission supplemented or amended Regulation No 517/2014 with regard to, first, the rights of undertakings to receive an allocation of HFC quotas and, secondly, the rights of undertakings to transfer HFC quotas.
First of all, the Court points out, first, that it follows from Article 17(2) of Regulation No 517/2014 that the Commission’s implementing power is limited to the smooth functioning of the HFC registry, which is an instrument for managing quotas, placing HFCs on the market and reporting, including reporting on equipment placed on the market. Secondly, when an implementing power is conferred on the Commission on the basis of Article 291(2) TFEU, the provisions of the implementing act adopted by the Commission must comply with the essential general aims pursued by the legislative act and be necessary or appropriate for the implementation of that act without supplementing or amending it, even as to its non-essential elements.
Concerning the rights of undertakings to receive an allocation of HFC quotas, the Court subsequently observes that, under Article 16(3) of Regulation No 517/2014, any undertaking, understood as a natural or legal person taken individually, which lawfully placed HFCs on the market from 1 January 2015 and made the declaration provided for in that regulation is entitled to a reference value upon the triennial recalculation of the reference values. However, by providing that several undertakings having the same beneficial owner are, under certain conditions, to be considered as one single undertaking for the purposes of Regulation No 517/2014, Article 7(1) of Implementing Regulation 2019/661 amended that system established by its basic regulation by adding conditions that are not provided for in the basic regulation for determining the right of undertakings to receive reference values.
In doing so, the Commission has also amended the system for the allocation of HFC quotas established by Regulation No 517/2014, (
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) as a single producer or importer within the meaning of Article 7(1) of Implementing Regulation 2019/661 is allocated, as part of its sole reference value, not only the HFC quotas corresponding to the quantities of HFCs that it previously placed on the market, but also the quotas corresponding to the quantities of HFCs placed on the market by the other undertakings with the same beneficial owner, while those undertakings lose the right to their own reference value and to the quotas in respect of such a value.
Consequently, those same undertakings have finally also lost the right to transfer HFC quotas since Article 7(1) of the Implementing Regulation 2019/661 entered into force, because, under Regulation No 517/2014, (
5
) that right is reserved for undertakings which have received a quota allocation on the basis of a reference value.
Therefore, by adopting Article 7(1) of Implementing Regulation 2019/661, the Commission modified the rights which the undertakings concerned derived from Regulation No 517/2014 with regard to receiving a reference value, the possibility of being allocated their own HFC quotas and the ability to transfer those quotas, thereby reforming the very functioning of the HFC quota system.
In the light of all the foregoing, the Court concludes that the Commission was not competent to adopt Article 7(1) of Implementing Regulation 2019/661 and, consequently, annuls the contested decisions taken on that basis.
(
1
)	Regulation (EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated greenhouse gases and repealing Regulation (EC) No 842/2006 (OJ 2014 L 150, p. 195).
(
2
)	Commission Implementing Regulation (EU) 2019/661 of 25 April 2019 ensuring the smooth functioning of the electronic registry for quotas for placing hydrofluorocarbons on the market (OJ 2019 L 112, p. 11).
(
3
)	Under Article 291(2) TFEU, ‘where uniform conditions for implementing legally binding Union acts are needed, those acts shall confer implementing powers on the Commission …’.
(
4
)	Annex VI, paragraph 1, of Regulation No 517/2014.
(
5
)	Article 18(1) of Regulation No 517/2014.