Action brought on 4 May 2021 — Luossavaara-Kiirunavaara v Commission

(Case T-244/21)

(2021/C 289/54)

Language of the case: English

Parties

Applicant: Luossavaara-Kiirunavaara AB (Luleå, Sweden) (represented by: A. Bryngelsson, F. Sjövall and A. Johansson, lawyers)

Defendant: European Commission

Form of order sought

The applicant claims that the Court should:

— annul Article 1(3) of the decision of the European Commission of 25 February 2021 concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances in accordance with Article 11(3) of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003; (1)

— order that the Commission pay the costs of the proceedings.

Pleas in law and main arguments

In support of the action, the applicant relies on six pleas in law.

1. First plea in law, alleging that the contested decision infringes the law governing the Emissions Trading System (ETS), in particular Annex 1 to Commission Delegated Regulation (EU) 2019/331 of 19 December 2018 (2) and Article 10a(1) of Directive 2003/87/EC. (3) — The applicant submits that the contested decision, and in particular its recital 13, Article 1(3), and Annex III, infringes Article 10a(1) of Directive 2003/87/EC and Annex 1 to Commission Delegated Regulation (EU) 2019/331. The product benchmark for sintered ore set out in Commission Delegated Regulation (EU) 2019/331 must be interpreted in conformity with Directive 2003/87/EC, the treaties and general principles of EU law. According to that Directive and case-law, substitute products and alternative production methods should be included under the same product benchmark, in order to promote the most climate-efficient technologies. As demonstrated by the evidence submitted, sintered iron ore pellets and sintered iron ore fines are immediate substitutes for each other. By refusing the inclusion of the applicant’s sintered pellets production installations under the benchmark, it is argued that the Commission misapplied Directive 2003/87/EC and Delegated Regulation (EU) 2019/331 and made a manifest error of assessment.

2. Second plea in law, alleging that the contested decision infringes the principles of equal treatment and non-discrimination. — The contested decision, it is argued, infringes the cited principles by discriminating between companies and sectors in such a way as to unduly favour certain undertakings. This concerns both the treatment of sintered fines versus sintered pellets production, and the treatment of the applicant’s pellet production versus other pellet production.

3. Third plea in law, alleging that the contested decision infringes the EU’s international environmental law obligations. — With its third plea in law, the applicant submits that the contested decision is contrary to the explicit commitments made by the EU in its nationally determined contribution under the 2015 Paris Agreement.

4. Fourth plea in law, alleging that the contested decision infringes the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case. — The contested decision reflects a policy position adopted by the European Commission which is, the applicant maintains, not grounded in an objective in-depth technical assessment on the substitutability of the products and techniques in question, but which instead merely relies on the claims by one of the parties affected by the determination, namely a steel industry organisation, without evaluating the technical objections raised by, inter alia, the applicant and the Swedish Environmental Protection Agency, or consulting any neutral third party.

5. Fifth plea in law, alleging that the contested decision infringes the obligation under Article 296 TFEU to state reasons. — The contested decision has, according to the applicant, failed to provide the slightest explanation regarding the technical substitutability between sintered pellets and sintered fines or of the application of the principle of equal treatment, but instead refers merely to the benchmark being ‘tailored to’ exclude (the applicant’s) sintered pellets production. As a result, it is impossible for persons concerned to ascertain the reasons for the determination from the decision itself.

6. Sixth plea in law, alleging, in the alternative, that Delegated Regulation (EU) 2019/331 must be declared invalid insofar as it applies to the contested decision from the date of the judgment, under Article 277 TFEU. — By its sixth plea, which is alternative to the pleas above, the applicant submits that, if Delegated Regulation (EU) 2019/331 must be interpreted to exclude the applicant’s sintered pellets (but not the sintered pellets of a named competing producer), (4) that Regulation itself must be declared invalid, by being in breach of Directive 2003/87/EC and general principles of EU law.

(1) Commission Decision (EU) 2021/355 of 25 February 2021 concerning national implementation measures for the transitional free allocation of greenhouse gas emission allowances in accordance with Article 11(3) of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2021 L 68, p. 221).

(2) Commission Delegated Regulation (EU) 2019/331 of 19 December 2018 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ 2019 L 59, p. 8).

(3) 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 Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32).

(4) Editorial note: the name of that producer has been omitted.