JUDGMENT OF THE GENERAL COURT (Third Chamber)

2 March 2010 ( )

(Environment – Directive 2003/87/EC – Scheme for greenhouse gas emission allowance trading – Action for annulment – Lack of direct and individual concern – Action for damages – Admissibility – Sufficiently serious breach of a higher-ranking rule of law conferring rights on individuals – Right to property – Freedom to pursue a trade or profession – Proportionality – Equal treatment – Freedom of establishment – Legal certainty)

In Case T‑16/04,

Arcelor SA, established in Luxembourg (Luxembourg), represented initially by W. Deselaers, B. Meyring and B. Schmitt-Rady, and subsequently by W. Deselaers and B. Meyring, lawyers,

applicant,

v

European Parliament, represented initially by K. Bradley and M. Moore, and subsequently by L. Visaggio and I. Anagnostopoulou, acting as Agents,

and

Council of the European Union, represented initially by B. Hoff-Nielsen and M. Bishop, subsequently by E. Karlsson and A. Westerhof Löfflerova, and subsequently by A. Westerhof Löfflerova and K. Michoel, acting as Agents,

defendants,

supported by

European Commission, represented by U. Wölker, acting as Agent,

intervener,

APPLICATION for partial annulment of 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), on the one hand, and application for compensation for the damage suffered by the applicant following the adoption of that directive, on the other,

THE GENERAL COURT (Third Chamber),

composed of J. Azizi (Rapporteur), President, E. Cremona and S. Frimodt Nielsen, Judges,

Registrar: K. Pocheć, Administrator,

having regard to the written procedure and further to the hearing on 15 April 2008,

gives the following

Judgment

Legal context

I – Rules of the EC Treaty

1 Article 174 EC provides inter alia:

‘1. Community policy on the environment shall contribute to pursuit of the following objectives:

– preserving, protecting and improving the quality of the environment,

– protecting human health,

– prudent and rational utilisation of natural resources,

– promoting measures at international level to deal with regional or worldwide environmental problems.

2. Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.

…

3. In preparing its policy on the environment, the Community shall take account of:

– available scientific and technical data,

– environmental conditions in the various regions of the Community,

– the potential benefits and costs of action or lack of action,

– the economic and social development of the Community as a whole and the balanced development of its regions.

…’

2 Article 175(1) EC provides:

‘The Council, acting in accordance with the procedure referred to in Article 251 [EC] and after consulting the Economic and Social Committee and the Committee of the Regions, shall decide what action is to be taken by the Community in order to achieve the objectives referred to in Article 174 [EC].’

II – The contested directive

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; ‘the contested directive’), which came into force on 25 October 2003, establishes a scheme for greenhouse gas emission allowance trading within the European Community (‘allowance trading scheme’), in order to promote reductions of greenhouse gas emissions, in particular carbon dioxide (‘CO 2 ’) in a cost-effective and economically efficient manner (Article 1 of the contested directive). It is based on the Community’s obligations under the United Nations Framework Convention on Climate Change and the Kyoto Protocol. The Protocol was approved by Council Decision 2002/358/EC of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfilment of commitments thereunder (OJ 2002 L 130, p. 1). The Kyoto Protocol came into force on 16 February 2005.

4 The Community and its Member States entered into commitments to reduce their aggregate anthropogenic emissions of greenhouse gases listed in Annex A to the Kyoto Protocol by 8% compared with 1990 levels in the period from 2008 to 2012 (recital 4 in the preamble to the contested directive). To that end, they agreed to fulfil their commitments to reduce emissions jointly, in accordance with Article 4 of the Kyoto Protocol, under what is known as the ‘Burden Sharing’ Agreement; the table of contributions for each Member State appears in Annex II to Decision 2002/358.

5 The Kyoto Protocol sets out three mechanisms to permit the participating countries to achieve their objectives to reduce greenhouse gas emissions, namely, first, the international trade in emission allowances, second, the joint implementation of reduction projects and, third, the ‘clean’ development mechanism, the last two mechanisms also being known as ‘flexible mechanisms’. While the joint implementation of reduction projects is designed to reduce greenhouse gas emissions in the countries participating in the Kyoto Protocol, the ‘clean’ development mechanism relates to emission reduction projects to be implemented in those developing countries which have not subscribed to the objectives of the Kyoto Protocol.

6 For the purposes of implementing within the Community the reduction objectives set out in the Kyoto Protocol and Decision 2002/358, the contested directive provides that, within the framework of the allowance trading scheme, the operators of the installations set out in Annex I to the directive must cover their greenhouse gas emissions by allowances which are allocated to them in accordance with national allocation plans (‘NAPs’). If an operator succeeds in reducing its emissions, it may sell the excess allowances to other operators. Conversely, the operator of an installation from which the emissions are excessive may buy the necessary allowances from an operator with a surplus.

7 Under Annex I to the contested directive, certain combustion installations in particular fall within its scope, namely those for the production of energy and for the production and processing of ferrous metals such as ‘[i]nstallations for the production of pig iron or steel (primary or secondary fusion) including continuous casting, with a capacity exceeding 2.5 tonnes per hour’.

8 The contested directive provides for an initial phase running from 2005 to 2007 (‘the first allocation period’), which precedes the first period of commitments laid down by the Kyoto Protocol, then a second phase running from 2008 to 2012 (‘the second allocation period’), which corresponds to that first period of commitments (Article 11 of the contested directive). During the first allocation period, the contested directive applies to only one of the greenhouse gases listed in Annex II, namely CO 2 , and only to emissions from the activities listed in Annex I (Article 2 of the contested directive), including the production and processing of ferrous metals.

9 More specifically, the allowance trading scheme is founded, first, on the requirement to hold a permit before emitting greenhouse gases (Articles 4 to 8 of the contested directive), and, second, on the principle of allowances authorising the permit-holding operator to emit a certain quantity of those gases, with an obligation on that operator to surrender each year the amount of allowances equal to the total emissions from that installation (Article 12(3) of the contested directive).

10 Thus, any installation referred to in Annex I to the contested directive must hold a permit issued by the competent national authority. Under Article 4 of the contested directive, ‘Member States shall ensure that, from 1 January 2005, no installation undertakes any activity listed in Annex I resulting in emissions specified in relation to that activity unless its operator holds a permit issued by a competent authority in accordance with Articles 5 and 6, or the installation is temporarily excluded from the Community [allowance trading] scheme pursuant to Article 27’ of that directive.

11 Moreover, Article 6(2) of the contested directive provides:

‘Greenhouse gas emissions permits shall contain the following:

…

(c) monitoring requirements, specifying monitoring methodology and frequency;

(d) reporting requirements; and

(e) an obligation to surrender allowances equal to the total emissions of the installation in each calendar year, as verified in accordance with Article 15 [of the contested directive], within four months following the end of that year.’

12 The conditions and procedures under which the competent national authorities allocate allowances to operators of installations on the basis of a NAP are set out in Articles 9 to 11 of the contested directive.

13 The first subparagraph of Article 9(1) of the contested directive stipulates:

‘For each period referred to in Article 11(1) and (2) [of the contested directive], each Member State shall develop a [NAP] stating the total quantity of allowances that it intends to allocate for that period and how it proposes to allocate them. The [NAP] shall be based on objective and transparent criteria, including those listed in Annex III, taking due account of comments from the public. The Commission shall, without prejudice to the [EC] Treaty, by 31 December 2003 at the latest develop guidance on the implementation of the criteria listed in Annex III.’

14 The Commission of the European Communities issued the initial guidance in its Communication COM(2003) 830 final of 7 January 2004 on guidance to assist Member States in the implementation of the criteria listed in Annex III to the contested directive and on the circumstances under which force majeure is demonstrated. In its Communication COM(2005) 703 final of 22 December 2005 the Commission issued further guidance on NAPs for the second allocation period (‘the Commission further guidance’).

15 Under the second subparagraph of Article 9(1) of the contested directive:

‘For the period referred to in Article 11(1) [of the contested directive], the [NAP] shall be published and notified to the Commission and to the other Member States by 31 March 2004 at the latest. For subsequent periods, the [NAP] shall be published and notified to the Commission and to the other Member States at least 18 months before the beginning of the relevant period.’

16 Article 9(3) of the contested directive provides:

‘Within three months of notification of a [NAP] by a Member State under paragraph 1, the Commission may reject that [NAP], or any aspect thereof, on the basis that it is incompatible with the criteria listed in Annex III or with Article 10 [of the contested directive]. The Member State shall only take a decision under Article 11(1) or (2) [of the contested directive] if proposed amendments are accepted by the Commission. Reasons shall be given for any rejection decision by the Commission.’

17 Article 10 of the contested directive states that the Member States are to allocate free of charge at least 95% of the allowances for the first allocation period, and at least 90% for the second allocation period.

18 Article 11 of the contested directive, which deals with the allocation and issue of allowances, provides:

‘1. For the three-year period beginning 1 January 2005, each Member State shall decide upon the total quantity of allowances it will allocate for that period and the allocation of those allowances to the operator of each installation. This decision shall be taken at least three months before the beginning of the period and be based on its [NAP] developed pursuant to Article 9 and in accordance with Article 10 [of the contested directive], taking due account of comments from the public.

2. For the five-year period beginning 1 January 2008, and for each subsequent five-year period, each Member State shall decide upon the total quantity of allowances it will allocate for that period and initiate the process for the allocation of those allowances to the operator of each installation. This decision shall be taken at least 12 months before the beginning of the relevant period and be based on the Member State’s [NAP] developed pursuant to Article 9 and in accordance with Article 10 [of the contested directive], taking due account of comments from the public.

3. Decisions taken pursuant to paragraph 1 or 2 shall be in accordance with the requirements of the Treaty, in particular Articles 87 and 88 thereof. When deciding upon allocation, Member States shall take into account the need to provide access to allowances for new entrants.

…’

19 Annex III to the contested directive lists 11 criteria applicable to NAPs.

20 Criterion 1 of Annex III to the contested directive states:

‘The total quantity of allowances to be allocated for the relevant period shall be consistent with the Member State’s obligation to limit its emissions pursuant to Decision 2002/358 … and the Kyoto Protocol, taking into account, on the one hand, the proportion of overall emissions that these allowances represent in comparison with emissions from sources not covered by this Directive and, on the other hand, national energy policies, and should be consistent with the national climate change programme. The total quantity of allowances to be allocated shall not be more than is likely to be needed for the strict application of the criteria of this Annex. Prior to 2008, the quantity shall be consistent with a path towards achieving or over-achieving each Member State’s target under Decision 2002/358 … and the Kyoto Protocol.’

21 Criterion 3 of Annex III to the contested directive stipulates:

‘Quantities of allowances to be allocated shall be consistent with the potential, including the technological potential, of activities covered by this [allowance trading] scheme to reduce emissions. Member States may base their distribution of allowances on average emissions of greenhouse gases by product in each activity and achievable progress in each activity.’

22 Under criterion 6 of Annex III to the contested directive, ‘[t]he [NAP] shall contain information on the manner in which new entrants will be able to begin participating in the [allowance trading] scheme in the Member State concerned’.

23 Under criterion 7 of Annex III to the contested directive, ‘[t]he [NAP] may accommodate early action [to reduce emissions] and shall contain information on the manner in which early action is taken into account’. Also under that criterion, ‘[b]enchmarks derived from reference documents concerning the best available technologies may be employed by Member States in developing their [NAPs], and these benchmarks can incorporate an element of accommodating early action [to reduce emissions]’.

24 Article 12(1) of the contested directive provides that allowances may be transferred between natural or legal persons within the Community or to natural or legal persons in third countries, where an agreement has been concluded between those countries and the Community in accordance with Article 25 of the contested directive and those allowances have been mutually recognised by the competent authority of each Member State. Under Article 12(3) of the contested directive, by 30 April each year, the operator of each installation is to surrender to the competent authority a number of allowances equal to the total emissions from that installation during the preceding calendar year, in order that those allowances can subsequently be cancelled.

25 Article 13(1) of the contested directive provides that allowances are to be valid only for emissions during the period for which they are issued.

26 Under Article 16(2) of the contested directive, Member States are required to ensure publication of the names of operators which are in breach of requirements to surrender sufficient allowances under Article 12(3) of the contested directive. Under Article 16(3) and (4) of the contested directive, any operator which does not surrender sufficient allowances to cover its emissions during the preceding year is to be held liable for the payment of an excess emissions penalty amounting to EUR 40 in the first period and EUR 100 in subsequent periods for each excess tonne of CO 2 equivalent emitted but not covered by a surrendered allowance. Moreover, payment of the excess emissions penalty does not release the operator from the obligation to surrender an amount of allowances equal to its total emissions.

27 Under Article 24 of the contested directive, subject to approval by the Commission in accordance with the procedure referred to in Article 23(2) of that directive, read in conjunction with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ 1999 L 184, p. 23), Member States may apply emission allowance trading to additional activities, installations and greenhouse gases, taking into account all relevant criteria, in particular effects on the internal market, potential distortions of competition, the environmental integrity of the allowance trading scheme and the reliability of the planned monitoring and reporting system.

28 Article 27 of the contested directive provides that Member States may also apply to the Commission for certain installations to be temporarily excluded from the allowance trading scheme, and the Commission may respond to that application by way of a decision. Furthermore, under Article 28 of the contested directive, Member States may, with the agreement of the Commission, allow operators of installations which so request to form a pool of installations from the same sector of activity. Finally, Article 29 of the contested directive provides that Member States may apply to the Commission for certain installations to be issued with additional allowances in cases of force majeure.

29 Article 30 of the contested directive, under the heading ‘Review and further development’, provides:

‘…

2. On the basis of experience of the application of this Directive and of progress achieved in the monitoring of emissions of greenhouse gases and in the light of developments in the international context, the Commission shall draw up a report on the application of this Directive, considering:

(a) how and whether Annex I should be amended to include other relevant sectors, inter alia the chemicals, aluminium and transport sectors, activities and emissions of other greenhouse gases listed in Annex II, with a view to further improving the economic efficiency of the [allowance trading] scheme;

…’

Facts and procedure

30 The applicant, Arcelor SA, was formed following a merger between ARBED, Aceralia and Usinor in 2001. Since its merger with Mittal in 2006, the applicant has been known as ArcelorMittal and has become the world’s largest steel producer. However, at the time when the present action was brought, with a production volume of 44 million tonnes per year, more than 90% of which was produced in the European Union, the applicant accounted for less than 5% of the world’s steel production. It has 17 installations in the European Union for the production of pig iron and steel, which are located in France (Fos-sur-Mer, Florange and Dunkirk), Belgium (Liège and Ghent), Spain (Gijón-Avilés) and Germany (Bremen and Eisenhüttenstadt).

31 By application lodged at the Registry of the Court on 15 January 2004, the applicant brought the present action.

32 In its application, the applicant claims that the Court should:

– declare Articles 4, 6(2)(e), 9, 12(3) and 16(2), (3) and (4), in conjunction with Article 2, Annex I and Annex III, criterion 1, of the contested directive void to the extent that those provisions (‘the contested provisions’) apply to installations for the production of pig iron or steel, including continuous casting, with a capacity exceeding 2.5 tonnes per hour;

– declare that the European Parliament and the Council of the European Union are bound to make good the damage that the applicant has suffered as a result of the adoption of the contested provisions;

– order the Parliament and the Council to bear the costs.

33 In its reply, the applicant further claims that the Court should, in the alternative, annul the contested directive in its entirety.

34 By separate documents lodged at the Court Registry on 1 and 6 April 2004, the Parliament and the Council respectively submitted a plea of inadmissibility under Article 114 of the Rules of Procedure of the Court. The applicant submitted its observations on those pleas on 25 June 2004.

35 By document lodged at the Court Registry on 5 May 2004, the Commission applied, in accordance with Article 115(1) of the Rules of Procedure, for leave to intervene in the present proceedings in support of the Parliament and Council. By order of 24 June 2004, the President of the Third Chamber of the Court granted the Commission leave to intervene. In accordance with Article 116(4) of the Rules of Procedure, the Commission lodged its statement in intervention, limited to the issue of admissibility, on 2 September 2004.

36 The Parliament and the Council, in their pleas of inadmissibility, and the Commission, in its statement in intervention on admissibility, claim that the Court should:

– dismiss the action as inadmissible; and

– order the applicant to pay the costs.

37 By order of the Court of 26 September 2005, the decision on the pleas of inadmissibility were reserved for final judgment and the costs were reserved.

38 The Council, in its defence, the Parliament, in its rejoinder, and the Commission, in its statement in intervention on the substance of the case, further claim that the Court should, in the alternative, dismiss the action as unfounded.

39 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure and, by way of the measures of organisation of procedure laid down in Article 64 of the Rules of Procedure, invited the Parliament, the Council and the Commission to reply to certain questions in writing before the hearing. The Parliament, the Council and the Commission replied to those questions within the period prescribed.

40 The parties presented oral argument and replied to the questions put by the Court at the hearing on 15 April 2008.

41 At the hearing, after the parties had been heard, the President of the Third Chamber of the Court ordered the proceedings to be stayed, pursuant to Article 77(a) of the Rules of Procedure, read in conjunction with the third paragraph of Article 54 of the Statute of the Court of Justice, until the Court of Justice had delivered its judgment in Case C‑127/07, which was duly noted in the minutes of the hearing.

42 Given that the Court of Justice delivered judgment on 16 December 2008 in Case C‑127/07 ArcelorAtlantique et Lorraine and Others [2008] ECR I‑9895, the parties were invited to submit their observations regarding the possible consequences to be drawn from that judgment in the context of the present proceedings. The parties submitted their observations within the period prescribed and the oral procedure was then closed.

43 Following the entry into force of the Treaty of Lisbon on 1 December 2009, the Court decided to reopen the oral procedure and called on the parties to set out their views on the possible consequences to be drawn from that fact and, in particular, from the entry into force of the fourth paragraph of Article 263 TFEU in the context of the present proceedings. The parties submitted their observations and the oral procedure was then closed.

Law

I – Admissibility of the application for annulment

A – Arguments of the parties

1. Arguments of the Parliament, the Council and the Commission

44 The Parliament and the Council, supported by the Commission, take the view that the application for partial annulment of the contested directive is inadmissible.

45 According to the Parliament and Council, the contested directive constitutes a ‘true directive’ for the purposes of the third paragraph of Article 249 EC, that is, an act of general application which has to be transposed by the Member States into domestic law and which applies in the abstract to situations determined objectively. The fourth paragraph of Article 230 EC makes no provision, for the benefit of individuals, for a direct action challenging such a directive.

46 The Parliament and the Council, supported by the Commission, further contend that the applicant is neither directly nor individually concerned by the contested provisions within the meaning of the fourth paragraph of Article 230 EC.

47 As regards the criterion of direct concern, the Parliament and the Council essentially submit that, unlike a regulation, a ‘true directive’ cannot, before implementing measures at national or Community level have been adopted or before the period allowed for adopting such measures has expired, directly produce binding legal effects on the legal position of individuals, or impose legal obligations on them. Consequently, such a directive cannot, of itself, directly concern such individuals within the meaning of the fourth paragraph of Article 230 EC. Thus, the contested provisions, which relate, in particular, to the issuing of emission permits, adoption of reporting and monitoring requirements, adoption of a NAP, and allocation and issue of emission allowances, do not impose any obligations on the applicant and do not change its legal position as long as they have not been transposed into domestic law.

48 In addition, the Parliament and the Council, supported by the Commission, consider that the contested directive leaves a very wide discretion to the Member States in their implementation and adoption of national measures, in particular in the elaboration of the NAP in accordance with Article 9, the determination of the minimum percentage of allowances to be allocated free of charge under Article 10, the establishment, under Article 11, of the total quantity of allowances for the allocation period in question, and their individual allocation to the operators of installations in accordance with the criteria set out in Annex III to the contested directive.

49 The Council, supported by the Commission, disputes the argument that the contested directive deprives the applicant of the benefit of existing permits obtained under Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control (OJ 1996 L 257, p. 26). Directive 96/61 is merely a coordinating instrument which establishes a general framework for sectoral pieces of legislation and which lays down, inter alia, general operator obligations and permit conditions (recital 9 in the preamble to Directive 96/61). However, that directive does not grant any emission rights, nor are such rights granted directly on its basis. In particular, no emission limit values are fixed in Directive 96/61 itself (Article 18 of Directive 96/61).

50 The Parliament and the Council conclude from all of the foregoing that the applicant is not directly concerned by the contested provisions.

51 As regards the criterion of individual concern, the Council points out that the contested directive applies in a general and abstract manner to all operators engaged in the activities listed in Annex I to that directive and to all large industrial installations emitting CO 2 , including installations which produce pig iron and steel. The applicant has not proved that its situation is different to that of the other pig iron and steel producers. The Council adds that, under the terms of criterion 6 of Annex III to the contested directive and Article 11(3) thereof, the Member States must take into account the need for allowances to new entrants. Furthermore, the contested directive has been applicable from 1 May 2004 to pig iron or steel producers established in the 10 Member States which joined the Union on that date and whose activities are also covered by Annex I to that directive.

52 The Parliament and the Council take the view that neither Article 175(1) EC, which constitutes the legal basis for actions to be taken by the Community on environmental matters, nor Article 174 EC imposes on the Community legislature any obligation, when adopting measures of general application, to take account of the particular situation of individual operators. Nor can such an obligation flow from a higher-ranking rule of law such as the principles of proportionality and equal treatment or fundamental rights. According to the Parliament and the Council, those provisions cannot establish the locus standi of an individual before the Community Courts, as the prerequisites for locus standi laid down in the fourth paragraph of Article 230 EC would otherwise be emptied of their substance. In any event, the applicant has not shown that the contested provisions produced ‘dramatic consequences’ for its particular situation to such an extent that they could be regarded as being contrary to the higher-ranking rules of law invoked.

53 On that point, the Council disputes the applicant’s arguments that it is in a particular situation and, as the largest steel producer in Europe, involved in a restructuring process, with a limited profit margin, and having already achieved significant CO 2 emission reductions, it is particularly seriously affected. It is not sufficient that certain operators are economically more affected by a measure than their competitors for that measure to be of individual concern to them. In the Council’s opinion, the applicant is affected only by reason of its objective status as a producer of pig iron and steel, in the same way as any other operator in the same situation. Similarly, the fact that a measure of general scope may have specific effects which differ according to the various persons to which it applies is not such as to differentiate the applicant from all the other operators concerned, where that measure, like the contested directive in the present case, is applied on the basis of an objectively determined situation.

54 As regards the applicant’s claim that the contested directive impedes the restructuring of its group in that it does not permit the cross-border transfer of allowances linked to the production capacity of installations established in different Member States, the Council contends that the applicant has failed to explain why it is the only company affected, even though it itself refers to the example of the ongoing restructuring of Corus. In any event, the possibility of using the allowances allocated to closed installations is largely dependent on the discretion of the Member States. Thus, almost half of the Member States allow for a transfer of allowances from a closed installation to a replacement installation, even if in several instances such transfers are allowed only within a Member State’s territory. The Council, supported by the Commission, also submits that, in exercising their powers of discretion, all Member States have chosen, pursuant to Article 11(3), in conjunction with criterion 6 of Annex III to the contested directive, to provide for free-of-charge access to reserve allowances for new entrants. In addition, even if the applicant were unable to transfer the allowances of its closed-down installations to other installations of its group, it will none the less be entitled to receive allocations in connection with the extension of the capacity of such other installations free of charge, given that, in accordance with Article 3(h) of the contested directive, ‘new entrant’ includes an extension of an existing installation. Finally, as regards early action on emissions reductions, the Council observes that, under criterion 7 of Annex III to the contested directive, a NAP may accommodate such measures and that, on that basis, Member States have a degree of freedom.

55 According to the Parliament and the Council, the applicant has failed to demonstrate that, with regard to the contested directive, it was in a similar situation to the applicants in the case-law which it invokes (judgments in Case 11/82 Piraiki-Patraiki and Others v Commission [1985] ECR 207; Case C‑152/88 Sofrimport v Commission [1990] ECR I-2477, paragraph 28; Case C‑309/89 Codorníu v Council [1994] ECR I-1853; Joined Cases T‑480/93 and T‑483/93 Antillean Rice Mills and Others v Commission [1995] ECR II-2305, paragraph 67; and Case T‑135/96 UEAPME v Council [1998] ECR II-2335). As regards the applicant’s argument founded on the existence of long-term agreements for the supply of gas which it concluded with power stations prior to the adoption of the contested directive, the Council takes the view that the two cumulative conditions laid down in the case‑law cited above for determining the existence of individual concern within the meaning of the fourth paragraph of Article 230 EC are not met in the present case. The first of those conditions is that a higher-ranking rule of law must require the Community institutions to take account of the specific situation of the applicant as compared with that of any other person concerned by the contested measure, while the second is that the execution of the contracts concluded must be prevented wholly or in part during the period of application of that measure. The applicant itself states that the gas referred to by the agreements in question is delivered both to its own power plants and to third parties. Consequently, the applicant can benefit from the allowances allocated to the power plants belonging to its group or transfer them between its various production installations. The Council notes that, under the terms of point 92 of the Commission further guidance (see paragraph 14 above), where a waste gas from a production process at one installation is used as a fuel at another installation, the distribution of allowances between those two installations is a matter for Member States to decide. The Member State may thus choose to allocate allowances to the operator of the installation transferring the waste gas, in this case to a pig iron or steel producer, even though the emissions from the combustion of that gas are not generated by the steel-producing installation as such, but by the central power station. Consequently, the applicant has failed to demonstrate that the contested directive would prevent it from performing the contracts for the supply of gas at issue. In any event, the mere fact that the contested directive might, through national implementing measures, render the performance of such contracts more difficult cannot lead to establishing that the applicant is individually concerned.

56 The Parliament and the Council, supported by the Commission, submit that the applicant has also failed to demonstrate that it belonged to a closed group of operators. As the contested directive is a measure of general scope which applies to all operators carrying out the activities listed in Annex I thereto, the applicant is differentiated only in its objective capacity as an entity which produces pig iron and steel, in the same way as any other operator in the same situation. Therefore, the possible existence of only 15 pig iron and steel producers at the time when the contested directive was adopted is not sufficient to differentiate the applicant individually. The Parliament states that, even if the applicant belongs to a ‘closed and identifiable group’ known at the time when the contested directive was adopted or is economically more affected by a measure than its competitors, that would not suffice for it to be differentiated as an addressee.

57 The Council disputes that the applicant is likely to become a ‘net buyer of allowances’ because of its particular situation. On that point, it recalls, first, that, during the first allocation period, the Member States are obliged to allocate at least 95% of their allowances under the NAP free of charge and at least 90% of allowances during the second allocation period. Second, under Article 12(1) and (2) of the contested directive, the allowances are transferable without restrictions within the same group of undertakings, with persons within the Community and with persons in third countries. Third, the number of allowances initially allocated is determined, in a discretionary manner, by each Member State, having regard to a range of factors and criteria (see paragraph 48 et seq. above). Finally, the availability of the Kyoto Protocol flexible mechanisms (see paragraph 5 above) opens a possibility for pig iron or steel producers to convert the emissions credits they earn from the relevant projects into allowances that can be used for compliance under the emissions trading scheme. Consequently, it may very well be that the applicant is allocated allowances for 100% of its emissions free of charge.

58 On the basis of studies, the Council, supported by the Commission, rejects the claim with regard to the creation of a ‘unique lock-in situation’ for pig iron and steel producers in that the option of further reducing CO 2 emissions is not technically available to the iron and steel industry. In that regard, the Council essentially submits that there is technical potential to reduce such emissions in the iron and steel sector, from both a short-term and a long-term perspective, that the Community provides extensive funding for research in that sector and that the allowance trading scheme provides economic incentives for pig iron and steel producers to further reduce their CO 2 emissions.

59 As regards the applicant’s claim that pig iron and steel producers will not be able to pass on to their customers any increase in production costs resulting from the need to purchase emission allowances, the Council, supported by the Commission, contends that whether such a producer will be obliged to purchase any allowances will depend on the initial amount of allowances allocated to it under the NAP and on its efforts to decrease emissions. The applicant itself makes reference to its group restructuring process and to the reduction in the number of its blast furnaces by 2012, which is likely to bring emission reductions in itself, especially when, as stated in the applicant’s press release, its blast furnaces are replaced by electric arc furnaces which have lower CO 2 emissions per tonne of steel produced. Even assuming that the applicant had to purchase additional allowances, the associated costs could always be passed on, at least to some extent, to consumers, given the substantial increase in prices in the expanding steel sector.

60 The Parliament and the Council, supported by the Commission, submit, for all the reasons presented above, that the contested directive is not of individual concern to the applicant and that the action for annulment must therefore be declared inadmissible.

61 In addition, the Parliament, supported by the Commission, argues that the application for annulment is inadmissible on the ground that the contested provisions cannot be severed from the rest of the contested directive without the latter being emptied of its substance. According to the Parliament, if, for example, the obligations as to permits to emit greenhouse gases (Articles 4 and 6) and in respect of NAPs (Article 9) were removed, the result would be an act the substance of which would be completely ‘inverted’.

62 On that point, the Parliament disputes the applicant’s assertion that the allowance trading scheme would remain ‘substantially intact’ if steel and pig iron producers were to be excluded from its scope, as that aspect bears no relation to the relevant question of whether or not the annulment of the contested provisions would have the effect of altering the substance of the remainder of the contested directive. Moreover, according to the Parliament and the Council, the applicant’s relatively late attempt, at the stage of its reply and therefore contrary to the requirements of Article 48(2) of the Rules of Procedure, to amend its submissions to the effect that its action is to be interpreted ‘as including a request for complete annulment of the [contested] directive if partial annulment should not be possible’ cannot succeed. That approach would amount to an extension, rather than a reduction, of the applicant’s initial plea, which was aimed solely at a ‘partial annulment’ of the contested directive. However, the applicant has not claimed that any new matters of fact or law such as to justify the introduction of a new plea within the meaning of Article 48(2) of the Rules of Procedure have come to light during the course of the proceedings.

63 Consequently, the Parliament and the Council take the view that the application for annulment should be declared inadmissible on that ground also.

64 In their observations on the consequences to be drawn from the entry into force of the fourth paragraph of Article 263 TFEU, the Parliament and the Council, supported by the Commission, submit that that circumstance is not such as to alter that assessment, as that article is not applicable to the present proceedings and the contested directive is not a regulatory act within the terms of that provision.

2. Arguments of the applicant

65 The applicant submits, first, that, according to established case‑law in relation to the fourth paragraph of Article 230 EC, the mere fact that the contested measure is a directive is not sufficient to render an action for annulment inadmissible. Therefore, an action which seeks the annulment of certain provisions of a directive is admissible if those provisions are of direct and individual concern to the applicant.

66 As regards the criterion of direct concern, the applicant submits that, although, in accordance with the third paragraph of Article 249 EC, directives require implementing measures by the Member States in order to produce direct effects on the legal situation of economic operators, that requirement does not of itself suffice to justify the conclusion that there is no direct concern to the applicant within the meaning of the fourth paragraph of Article 230 EC. If that were the case, directives could never be challenged by such operators, which would be at variance with the case-law and with the principle of effective judicial protection. Where a Community measure, including a directive, does not leave the Member States with any discretion as to the obligation to be imposed on an applicant, that is to say, where implementation is purely automatic, such an applicant is directly concerned. The Community institutions cannot, solely by their choice of legal instrument, deprive that applicant of the judicial protection offered by the fourth paragraph of Article 230 EC.

67 In the present case, the contested provisions leave no discretion to the Member States to impose certain obligations on the applicant.

68 In that regard the applicant submits, first, that, according to Article 4 of the contested directive, Member States have been required to ensure that, from 1 January 2005, no pig iron or steel producers would undertake any activity in their installations without an emissions permit. Member States have no discretion in the matter. Article 27(1) of the contested directive provided for the possibility of a temporary exclusion of certain installations from the allowance trading scheme only up to 31 December 2007, with the consequence that the obligation was to take effect as of 1 January 2008 at the very latest. Similarly, under Article 27(2) of the contested directive, Member States could provide for a temporary exclusion from 2005 to 2007 but that did not imply that Member States had a discretion and, because the conditions laid down therein were so restrictive, such exclusion had no relevance in practice.

69 Second, the argument concerning the Member States’ alleged considerable discretion in the elaboration of the NAPs is, in the view of the applicant, without relevance, given that the contested directive distinguishes clearly between, on the one hand, the permit (Article 4) and, on the other, the allowances (Article 9). The requirement of a CO 2 emissions permit as such affects the legal position of the applicant because it partly invalidates the applicant’s existing operating permits and CO 2 emission rights under Directive 96/61 which it had previously obtained for its production installations. According to Article 6(2) of the contested directive, this permit imposes additional obligations in respect of monitoring and reporting and the obligation to surrender the number of allowances required to cover the CO 2 emissions of the installation concerned in each calendar year. In the applicant’s opinion, Member States have no discretion as to the obligations to be imposed on the applicant in this respect.

70 Third, according to Article 9 of the contested directive, read in conjunction with criterion 1 of Annex III thereto, the total allowances to be allocated for the relevant allocation period must, on the one hand, be consistent with the Member State’s obligation to limit its emissions pursuant to Decision 2002/358 and the Kyoto Protocol and, on the other, not go beyond what is likely to be needed for the strict application of the criteria of Annex III to the contested directive. That results in the establishment of an ‘absolute cap on allowances’ which Member States are required to observe, with no margin for discretion, when setting the total quantity of allowances to be allocated. This interpretation, it contends, is confirmed by paragraph 10 of the Commission further guidance on criterion 3 of Annex III to the contested directive (see paragraph 14 above).

71 Fourth, and finally, under Articles 12(3) and 16 of the contested directive, Member States, without having any discretion in that regard, are required, first, to ensure that, by 30 April each year at the latest, the operator of each installation surrenders an amount of allowances equal to the total emissions from that installation during the preceding calendar year and, second, to impose sanctions on it if it fails to comply with that obligation.

72 The applicant concludes from this that the contested provisions leave the Member States no discretion with regard to the obligations to be imposed on it and, consequently, that those provisions are of direct concern to it within the meaning of the fourth paragraph of Article 230 EC.

73 The applicant considers that the contested provisions are also of individual concern to it. First, the Community legislature is under a duty to take into account the serious consequences of the contested provisions for the particular situation of the applicant and, second, the applicant forms part of a closed category consisting of a limited number of pig iron and steel producers affected by those provisions.

74 First, in the applicant’s opinion, the duty of the Community legislature to take account of the consequences for the situation of certain persons of a measure which it envisages adopting distinguishes those persons individually (Piraiki-Patraikiand Others v Commission, cited in paragraph 55 above, paragraph 19; Sofrimport v Commission, cited in paragraph 55 above, paragraph 11; and Codorníu v Council, cited in paragraph 55 above, paragraph 20); that duty may arise under a specific provision of the EC Treaty (Antillean Rice Mills and Others v Commission, cited in paragraph 55 above, paragraph 67) or any other higher-ranking rule of law (UEAPME v Council, cited in paragraph 55 above, paragraph 90), such as the principles of proportionality and equality or fundamental rights.

75 On that point, the applicant essentially submits that the Community legislature was under a duty, pursuant to the principles of proportionality and equal treatment and in view of its property rights and its right to pursue an economic activity, to take into account the very serious consequences of the contested directive for its particular situation. Thus, by failing, contrary to the initial proposals of the Parliament and the Commission, to include other sectors in Annex I to the contested directive – in particular the competing non-ferrous metals and chemicals sectors – the Community legislature infringed the principles of equal treatment and undistorted competition. Similarly, it infringed the applicant’s rights of property, its freedom of establishment and its freedom to pursue an economic activity as well as the principle of proportionality by failing to take account of the technical and economic impossibility for steel producers to reduce CO 2 emissions any further. In doing so, the Community legislature placed a disproportionate burden on the applicant which put its existence at risk in so far as it would necessarily become a ‘net buyer of allowances’ with no possibility of passing on the associated costs to its customers. The contested provisions are, moreover, disproportionate to the extent that they are not coupled with measures which would at the very least alleviate their drastic consequences for the applicant, such as a control mechanism concerning the price of the allowances or the cross-border transfer of allowances within the same group of companies. In the absence of such a transfer option, which impacts seriously on the applicant’s restructuring efforts and its competitiveness, the contested directive also affects the applicant’s right of property and its freedom of establishment. The applicant states that the unacceptable restriction on its freedom of establishment which results from the lack of a rule in the contested directive permitting the cross-border transfer of emission allowances between different production installations in the same group of companies cannot be offset by the argument that an extension of the production capacities of an installation is likely to benefit from the allowance rules for ‘new entrants’, which are subject to the discretion of the destination Member State concerned.

76 Second, the applicant submits that it belongs to a closed category of companies particularly affected by the contested directive. In the European Union of 15 Member States there were only 15 companies or groups of companies which operated installations for the production of pig iron and steel, namely the applicant, Corus, ThyssenKrupp, HKM, Riva, Lucchini, SSAB, Voest Alpine, Salzgitter, Duferco, Rauttaruukki, Fundia, Saint Gobain, DHS and Neue Maxhütte, to which may be added, since 1 May 2004, 5 producers of pig iron or steel in the 10 new Member States, namely Ispat Polska, Czech Steel Company, Moravia Steel, Dunaferr Dunai and US Steel Košice. However, the enlargement of the European Union as such cannot deprive this group of its categorisation as a closed group within the meaning of the case-law, given that that enlargement was fixed by Article 2 of the Act concerning the conditions of accession to the European Union of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 33) before the contested directive entered into force. Moreover, new entrants are de facto excluded, given that market entry by way of setting up new blast furnace operations is not an economically viable option. Since the entry into force of the contested directive, and having regard to the decrease in the number of blast furnaces in the European Union since 1975, a new entrant can establish itself on the market only by way of an acquisition.

77 According to the applicant, the ‘unique lock-in situation’ of that group of producers, which distinguishes them from all other persons, results from the fact that, in the foreseeable future, for technical reasons, pig iron and steel producers, unlike the other economic sectors affected, such as the cement, electricity, paper and glass sectors, will not be in a position to reduce CO 2 emissions to any significant extent in accordance with the targets in the contested directive. Therefore, the choice between emissions reduction and the purchase of additional allowances is essentially not available to producers in that group, thereby placing them necessarily in the position of ‘net buyers of allowances’. In the steel production process, the emission of CO 2 is inevitable because coal is used as a raw material, and not as a fuel. Thus, economically efficient alternatives for CO 2 reduction, such as switching to natural gas as a fuel, for example, are not available. Blast furnace technology has been perfected in terms of energy output and is now approaching its theoretical optimum, which still results in two tonnes of CO 2 being emitted for each tonne of steel produced. A further reduction of emissions would be possible only through a technological breakthrough, the development of which will take at least 20 to 30 years. A decrease in production, however, is no option, given that blast furnaces must, for technological reasons, always operate at near to full capacity.

78 On the basis of studies which have been carried out, the applicant submits that, for the coming 25 years or so, blast furnace operators will have to work with the existing technologies, which have very limited margins of progress since, so far, all attempts at replacement have failed for technical and/or economic reasons. It also adds that, contrary to the Council’s assertions, the emissions reductions which it achieved by 2002 were not a result of technological improvements but were mainly due to the closure of five blast furnaces, the capacity increase in other ones and a raw-material switch from Lorraine ore to Brazilian ore, which has a better energy output. Similarly, the applicant’s reduction target for 2008 to 2012 should be achieved mainly by closures of plants along with a transfer of production to facilities in other Member States.

79 The applicant further submits that steel is the only one of the four sectors in Annex I to the contested directive which is faced with competition from other sectors not covered by that directive, namely non-ferrous metals and plastics. That situation places pig iron and steel producers at an even more serious competitive disadvantage, on the one hand, because of a ‘very concentrated’ demand, namely from the automotive industry and, on the other, because of intensified competition from sectors not covered by the contested directive and steel producers from third countries, such as the United States of America, with no corresponding obligations under the Kyoto Protocol and accounting for 65% of world production. Thus, European steel producers will not be able to pass on to their customers any increase in the production costs resulting from the need to purchase CO 2 allowances, which will further affect their already low profitability. In that regard, the competitive situation for the other sectors referred to in Annex I to the contested directive is different. For example, in view of the expected substantial rise in electricity prices, energy suppliers will be able to pass on to their customers any increase in production costs and to improve their profitability appreciably.

80 The applicant states that, by contrast, even the recent price increase in steel will not enable it to pass on to its customers the part of the increase in its production costs which results from the need to buy emission allowances. That price increase is merely the result of the increase in the costs of raw materials and transportation at a worldwide level. Globally, European pig iron and steel producers face severe competition from producers from third countries which have not ratified the Kyoto Protocol, such as the United States of America, the Commonwealth of Australia and the Republic of Turkey, or from third countries which have ratified the Kyoto Protocol but are not initially required to reduce their CO 2 emissions, such as the Republic of India, the People’s Republic of China and the Federative Republic of Brazil (Annex B to the Kyoto Protocol), or countries which, under the Kyoto Protocol, are only under the obligation not to increase their emissions, such as the Russian Federation and Ukraine. Therefore, the European pig iron and steel producers are the only companies which have additional production costs resulting from the implementation of the Kyoto Protocol, while they are exposed to increasingly vigorous competitive pressure from third country imports, the scale of which is dependent on price levels on the European market. The applicant adds that, as the costs for emission allowances are currently EUR 26 per tonne of CO 2 emitted, the extra costs per tonne of steel produced, which implies the emission of approximately two tonnes of CO 2 , are approximately EUR 52, whereas the global transport price for one tonne of steel is normally no more than EUR 20. The applicant also states that, unlike pig iron or steel producers, energy suppliers, in particular those established in Germany and the United Kingdom, are presumed to include in their electricity prices the value of emission allowances received free of charge in order to make significant windfall profits from them.

81 The applicant concludes from the foregoing that the pig iron and steel producers in the European Union are in a ‘unique lock-in situation’ which distinguishes them from all other persons. That situation is aggravated by the fact that the contested directive does not provide for any cap or control mechanism concerning the price of allowances. Pig iron and steel producers are thus exposed, according to recent studies, to prices ranging from EUR 20 to EUR 60 or more for one allowance to emit one tonne of CO 2 , when even a price of EUR 20 per tonne would destroy the gross profit in the steel sector.

82 Third, the applicant submits that, as by far the largest pig iron and steel producer in Europe – with a production of 40 million tonnes of steel, followed by Thyssen-Krupp (17 million tonnes) and Corus (16 million tonnes) – it is particularly seriously affected by the contested directive. By using its highly advanced blast furnace technology, the applicant has already reduced its greenhouse gas emissions, including its CO 2 emissions, clearly beyond the 8% target of the Kyoto Protocol, namely by 19% in absolute terms and 24% in relative terms (per tonne of steel produced) since 1990 and cannot, for the technical reasons set out in paragraphs 77 and 78 above, further reduce CO 2 emissions to any significant extent. Moreover, in 2002 the applicant achieved a gross profit of EUR 16, and a net profit of EUR 4, per tonne of CO 2 emitted for its blast furnace operations. Consequently, even at the lowest price of an allowance as currently estimated (EUR 20), which would correspond for the applicant to an extra cost of EUR 40 per tonne of steel, production would become unprofitable to such an extent that continued operation of its installations in Europe would no longer be viable.

83 Fourth, the applicant is the only European pig iron and steel producer faced with a particular problem created by the contested directive because of the ongoing restructuring process within its group aimed at increasing its competitiveness. That restructuring, initiated by the 2001 concentration (see paragraph 30 above), that is to say, before the contested directive was adopted, concerned the closure of, or a capacity reduction at, less efficient installations in one Member State and compensating increases in production at more efficient installations in other Member States. That situation is particular to the applicant and distinguishes it from all other European pig iron or steel producers, which have concentrated their production in one Member State. The only exception is Corus, which has installations in the United Kingdom and the Netherlands but which has already optimised its production. The contested directive seriously compromises that restructuring process, by not requiring the Member States to allow for a cross-border transfer of allowances from an installation earmarked for closure to other installations established in other Member States. Hence, the Belgian and German Governments have already indicated that the applicant would lose its emission allowances for the installations established in Wallonia (Belgium) and in Bremen (Germany) in the event of closure, with the result that it would not be in a position to transfer those allowances to its installations established in Spain or France, where a corresponding increase in production capacity is planned. Similarly, the German NAP and the first sentence of Article 10(1) of the German draft Law on the national allocation plan during the first allocation period provide for the cancellation of allowances in the event of the closure of an installation unless the operator commissions a new installation in Germany (and not in another Member State). Similarly, the French NAP provides that an operator may keep the allowances for an installation which is terminated only if the activity is transferred to another installation established in French territory. The applicant is thus forced to act counter to its objective of restructuring and increased competitiveness. It has to purchase additional emission allowances to cover the production capacity of the installations which it initially intended to close and transfer to installations established in other Member States and to continue to operate less profitable installations for the sole purpose of not losing the allowances which have already been allocated.

84 The applicant adds that it is also the only operator in all of the sectors covered by Annex I to the contested directive which faces the problem of cross-border transfer of production capacity between installations established in different Member States. That problem is unknown in the cement, glass, energy and paper sectors, in which installations, unlike steel production installations, are located either close to customers or in areas with sufficient quantities of raw materials. Consequently, for producers operating in those sectors, the closure of an installation in one Member State and the transfer of production to another Member State is normally not a viable option.

85 However, in the light of the freedom of establishment, there is no justification for leaving to the discretion of the Member States the question of the extent to which cross-border transfers of production capacities remain possible. That is all the more so the case since there are important economic and political incentives for Member States not to permit such a transfer of production capacity, including the incentive of the emission allowances associated with those production capacities. On the one hand, from the point of view of the Member State which initially allocated those allowances, there is no interest in facilitating such a transfer and losing both the production capacity concerned and the associated jobs in its territory, and also the allowances which have already been allocated. On the other hand, the Member State which is the destination of such a transfer, in particular if it is a small State, would not necessarily have any interest in allocating allowances free of charge to the new entrant, given the risk of breaching its national cap and, consequently, failing to meet its reduction obligations under Decision 2002/358 and the Kyoto Protocol. As is apparent from point 5 in Annex 4 to the Commission further guidance (see paragraph 14 above), these reservations are confirmed by the fact that the majority of the Member States do not allow cross-border transfers of allowances. In its further guidance, the Commission itself draws attention to the problems described above, noting that, in the first allocation period, the Member States adopted a multitude of detailed provisions governing reserves for new entrants and closures, including transfer rule arrangements, and that this contributes to a high degree of complexity and lack of transparency in the internal market and may result in distortions of competition. The Commission concluded that it is necessary to consider the set-up of a Community new entrant reserve, accompanied by a harmonisation of the administrative rules applicable to new entrants, closures and cross-border transfers within the internal market (Annex 7 to the Commission further guidance). The applicant also invokes a study according to which, under the allowance trading scheme and regard being had to the Member States’ interest in keeping the tax base and the job opportunities that installations established in their territory provide, it is rational at present for Member States to take allowances away from installations that close, or at least to make the retention of those allowances subject to the opening of a new installation in their territory in order to prevent the operator from leaving the country. This could result in an economically inefficient and politically undesirable regulatory contest between Member States to retain and attract investment. For those reasons, that study concludes that there is a need for harmonisation, at Community level, of the rules permitting installations to keep their allocation even in the event of closure. Consequently, in the applicant’s opinion, the effectiveness of the freedom of establishment can be safeguarded only by the intervention of the Community legislature itself.

86 Fifth, the applicant submits that it is particularly affected by the contested directive by reason of long-standing long-term agreements with power stations, some of which do not belong to the applicant’s group, concerning the transfer of blast furnace gas containing carbon monoxide, CO 2 and nitrogen for purposes of electricity generation. The applicant raises the question whether, in the light of Article 3(b) and (e) of the contested directive, the emission allowances at issue must be allocated to it or to the power plants. If the allowances were to be allocated to the power plants, the applicant’s situation would be further worsened since, as appropriate, it would be forced to purchase the necessary allowances on the trading market or, if deliveries were no longer to be made to the power stations, it would have to flare its blast furnace gas but without having the corresponding number of allowances. This would place the applicant at a serious competitive disadvantage compared with competitors which happen to use their own power plants.

87 Sixth, and finally, the applicant observes that, because it is particularly affected by the contested provisions, it has been very closely and actively involved in the legislative process, in particular in various meetings with representatives of the Commission, the Parliament and the Council. Within that context, in a number of cases, concerns expressed by the applicant were initially taken up but were finally rejected without any reasons being given.

88 In the light of the foregoing, the applicant submits that it has established the existence of a set of factors which is peculiar to it and which differentiates it from all other persons, thereby rendering the present application for annulment admissible under the fourth paragraph of Article 230 EC.

89 As regards the plea of inadmissibility raised by the Parliament in respect of the application for the partial annulment of the contested directive, the applicant emphasises that it does not seek complete removal of the contested provisions, but only that they be declared inapplicable to installations for the production of pig iron or steel. Therefore, that application does not require any alteration of the emissions trading scheme in relation to the other sectors listed in Annex I to the contested directive. The scope of the contested directive can be extended to other sectors, as has been proposed in respect of the non-ferrous metals and chemicals sectors, or reduced without affecting the functioning and very substance of the allowance trading scheme. Thus, the partial annulment sought would have the effect only of removing the – distinct and clearly defined – part of Annex I to the contested directive which refers to installations for the production of pig iron or steel.

90 According to the applicant, even assuming that the contested provisions were not severable from the contested directive as a whole, the application for annulment would be admissible in any case. That application must be interpreted as including a request for annulment of the contested directive in its entirety if partial annulment should not be possible. That can be inferred from the need to interpret the form of order sought in context and in the light of the purpose of the application, which is to end the infringement of fundamental rights of the applicant. Should the Court not follow the approach set out in paragraph 89 above, the applicant requests, in the alternative, the complete annulment of the contested directive. Such a request can, it argues, still be made after submission of the application.

91 For all of these reasons, the applicant submits that the application for annulment is admissible.

92 In its observations on the consequences to be drawn from the entry into force of the fourth paragraph of Article 263 TFEU, the applicant submits, in essence, first, that that provision is applicable to the present proceedings and, second, that, by reason of its content, the contested directive is a regulatory act within the meaning of that provision on the ground that the contested provisions do not leave any scope to the Member States as regards their implementation, thereby releasing the applicant from having to demonstrate that it is individually concerned by that directive.

B – Findings of the Court

93 Under the fourth paragraph of Article 230 EC, any natural or legal person may institute proceedings against a decision addressed to that person or against a decision which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern to the former.

94 It is settled case‑law that the fact that that Treaty provision does not expressly recognise the admissibility of actions brought by private persons for annulment of a directive within the meaning of the third paragraph of Article 249 EC is not of itself sufficient to render such actions inadmissible. The Community institutions cannot, merely by means of their choice of legal instrument, deprive individuals of the judicial protection which is afforded to them by the Treaty, even if that legal instrument is a directive (orders in Case T‑223/01 Japan Tobacco and JT International v Parliament and Council [2002] ECR II‑3529, paragraph 28; Case T‑154/02 Villiger Söhne v Council [2003] ECR II‑1921, paragraph 39; Case T‑213/02 SNF v Commission [2004] ECR II‑3047, paragraph 54; and the order of 25 April 2006 in Case T‑310/03 Kreuzer Medien v Parliament and Council, not published in the ECR, paragraphs 40 and 41). Similarly, the mere fact that the contested provisions form part of a measure of general application which constitutes a real directive and not a decision, within the meaning of the fourth paragraph of Article 249 EC, taken in the form of a directive is not of itself sufficient to exclude the possibility that those provisions may be of direct and individual concern to an applicant (see, to that effect, the orders in Japan Tobacco and JT International v Parliament and Council, paragraph 30, and in Case T‑321/02 Vannieuwenhuyze-Morin v Parliament and Council [2003] ECR II‑1997, paragraph 21).

95 It must be noted, in the present case, that the contested directive, by means of both its form and its substance, is a measure of general application which applies to objectively defined situations and gives rise to legal effects in respect of categories of persons defined in general or abstract terms, namely, all operators of installations which pursue one of the activities listed in Annex I to the contested directive, including the production of pig iron and steel undertaken by the applicant.

96 However, it cannot be excluded that, in certain circumstances, the provisions of such a measure of general application may concern certain individuals directly and individually (see, to that effect, Case C‑358/89 Extramet Industrie v Council [1991] ECR I‑2501, paragraph 13; Codorníu v Council, cited in paragraph 55 above, paragraph 19; and Case C‑50/00 P Unión de Pequeños Agricultores v Council [2002] ECR I‑6677, paragraph 36).

97 In addition, it is settled case‑law that the condition that the measure forming the subject-matter of the proceedings must be of direct concern to a natural or legal person, within the meaning of the fourth paragraph of Article 230 EC, requires that that measure should affect directly the legal situation of the individual and leave no discretion to its addressees, who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from Community rules without the application of other intermediate rules (Case C‑486/01 P Front national v Parliament [2004] ECR I‑6289, paragraph 34, and Case C‑15/06 P Regione Siciliana v Commission [2007] ECR I‑2591, paragraph 31).

98 The Court considers it appropriate to examine, in the first place, whether the applicant is individually concerned by the contested provisions. Only then, if necessary, will the Court also examine whether the applicant is directly concerned by those provisions.

99 As has been held in the settled case‑law, natural or legal persons other than those to whom a measure is addressed may claim to be individually concerned, for the purposes of the fourth paragraph of Article 230 EC, only if that measure affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of these factors distinguishes them individually just as in the case of the person to whom the measure is addressed (Case 25/62 Plaumann v Commission [1963] ECR 95, at 107; Unión de Pequeños Agricultores v Council, cited in paragraph 96 above, paragraph 36; and Case C‑263/02 P Commission v Jégo‑Quéré [2004] ECR I‑3425, paragraph 45).

100 In the light of the foregoing, it is necessary to examine whether the obligations which may result from the contested provisions are capable of distinguishing the applicant individually as an addressee. In that regard, it should be noted that the applicant seeks the annulment, first, of Article 4 of the contested directive, which establishes the requirement to hold an emissions permit, second, of Article 6(2)(e) and Article 12(3) of that directive, which provide for the obligation to surrender a number of allowances equal to the total emissions from the installation during the preceding calendar year, third, of Article 9, in conjunction with criterion 1 of Annex III to the contested directive, concerning the establishment of NAPs and the alleged obligation on Member States to issue installation operators with a maximum quantity of emission allowances, and, fourth, of Article 16(2), (3) and (4) of the contested directive, concerning penalties for failure to comply with the obligation to surrender, in so far as all those provisions apply to pig iron and steel producers by virtue of Article 2 of the contested directive, in conjunction with Annex I thereto.

101 In support of its claim that it is individually concerned by the contested provisions, the applicant essentially submits, first, that the Community legislature was required, by virtue of numerous higher-ranking rules of law, including its fundamental rights, to take account of the particular situation of the pig iron and steel producers established in the internal market, and especially of the applicant’s particular situation (Piraiki-Patraiki and Others v Commission, cited in paragraph 55 above, paragraph 19; Sofrimport v Commission, cited in paragraph 55 above, paragraph 11; and UEAPME v Council, cited in paragraph 55 above, paragraph 90).

102 It should be noted, in this regard, that there is no express or specific provision which is either higher-ranking or of secondary legislation which would have required the Community legislature, when adopting the contested directive, to take any particular account of the situation of pig iron and steel producers, let alone of the applicant’s situation, vis-à-vis the situation of operators in the other industrial sectors referred to in Annex I to that directive (see, to that effect, Case T‑47/00 Rica Foods v Commission [2002] ECR II‑113, paragraphs 41 and 42; see also the orders in Case T-45/02 DOW AgroSciences v Parliament and Council [2003] ECR II‑1973, paragraph 47; Case T‑264/03 Schmoldt and Others v Commission [2004] ECR II‑1515, paragraph 117; and Case T‑142/03 Fost Plus v Commission [2005] ECR II‑589, paragraphs 61 to 65). Thus, Article 174 EC and Article 175(1) EC in particular, as legal bases for the regulatory activity of the Community on environmental issues, do not provide for such an obligation. In addition, apart from the reference to its fundamental rights and to certain general principles of law which protect it, the applicant does not put forward any concrete higher-ranking rule which concerns it specifically or, at the very least, the pig iron and steel producers, which is capable of creating such an obligation in its favour.

103 Although it is true that, when adopting a measure of general application, the Community institutions are required to respect higher-ranking rules of law, including fundamental rights, the claim that such a measure infringes those rules or rights is not sufficient in itself to establish that the action brought by an individual is admissible, without running the risk of rendering the requirements of the fourth paragraph of Article 230 EC meaningless, as long as that alleged infringement does not distinguish the applicant individually just as in the case of the addressee of a measure (see, in relation to the right to property, the order in Case T‑94/04 EEB and Others v Commission [2005] ECR II‑4919, paragraphs 53 to 55; see also, to that effect, the order of 29 June 2006 in Case T‑311/03 Nürburgring v Parliament and Council, not published in the ECR, paragraphs 65 and 66). In that regard, the applicant cannot reasonably invoke the judgment in Codorníu (cited in paragraph 55 above, paragraphs 20 to 22), in which the action against the contested regulation was deemed admissible as a result solely of the differentiating nature, in relation to the contested provisions, of the denomination at issue, on the basis of which the applicant had been the only trade mark proprietor for a very long time.

104 In any event, the applicant has not established that the contested provisions, in particular the requirement of an emissions permit in Article 4 of the contested directive, the obligation to surrender in Article 12(3), in conjunction with Article 6(2)(e), and the penalties laid down in Article 16(2), (3) and (4) of that directive infringed its fundamental rights and caused it serious harm in such a way as to distinguish it individually as an addressee from any other operator concerned by those provisions (see, to that effect, the order in Nürburgring v Parliament and Council, cited in paragraph 103 above, paragraph 66). Those provisions apply, in a general and abstract manner, to all operators listed in Annex I to the contested directive and to objectively determined situations. They are therefore capable of affecting the legal position of all those operators in the same way.

105 Consequently, the applicant’s arguments based on the Community legislature’s obligation to respect certain general principles of law and fundamental rights do not lead to the conclusion that the applicant is individually concerned by the contested provisions and it is, therefore, not necessary to examine whether, in that regard, those provisions concern it directly.

106 Second, as regards the applicant’s argument that it is part of a closed group of operators which are particularly affected by the contested provisions, it should be noted, first, that the possibility of determining, at the time of adoption of the contested measure, more or less precisely the number, or even the identity, of the persons to whom a measure applies by no means implies that it must be regarded as being of individual concern to those persons as long as it is established that that application takes effect by virtue of an objective legal or factual situation defined by the measure in question (see, to that effect, the order in Case C‑503/07 P Saint‑Gobain Glass Deutschland v Commission [2008] ECR I‑2217, paragraph 70 and the case‑law cited therein). Second, the fact that certain operators are more affected economically by a measure of general application than others is not sufficient to distinguish them individually from all other operators, since the application of that measure takes effect by virtue of an objectively determined situation (see, to that effect, the order in Case C‑409/96 P Sveriges Betodlares and Henrikson v Commission [1997] ECR I‑7531, paragraph 37; order of 11 September 2007 in Case T‑28/07 Fels-Werke and Others v Commission, not published in the ECR, paragraph 60 and the case‑law cited therein; and order in Case T‑391/02 Bundesverband der Nahrungsmittel- und Speiseresteverwertung and Kloh v Parliament and Council [2004] ECR II‑1447, paragraph 53 and the case‑law cited therein).

107 It must be noted that the applicant is affected by the contested provisions primarily in its objective capacity as an installation operator producing greenhouse gas emissions, on the one hand, and as a pig iron and steel producer, on the other, in the same way as any other operator or pig iron or steel producer whose activity is listed in Annex I to the contested directive. Therefore, even if, at the time when the contested directive came into force, the applicant was one of a group of only 15 pig iron or steel producers operating within the internal market, that fact alone is not sufficient to distinguish it individually, in the same way as an addressee, from all other operators pursuing activities covered by Annex I to the contested directive, including pig iron and steel producers in that same group.

108 In addition, even considering that pig iron and steel producers constitute a group of operators which is particularly affected, they are all liable to suffer the same legal and factual consequences as the applicant by reason of an objectively determined situation, namely the inclusion of their activity in Annex I to the contested directive. Thus, the alleged technical and economic impossibility for those producers, compared with operators in other industrial sectors, to reduce their greenhouse gas emissions further and to pass on to their customers the additional costs incurred in purchasing emission allowances, affects the pig iron and steel production sector as a whole and in exactly the same way. Likewise, since the implementation of the allowance trading scheme, all of those producers are exposed in the same way to developments on the trading market and on the market for the goods at issue, including competition from other industrial sectors or pig iron and steel producers from third countries.

109 In that respect, the applicant’s claim that the pig iron and steel producers established in the internal market constitute a closed group of operators, whose composition is no longer likely to change, must also be rejected. In that regard, the Parliament and the Council were correct to refer to the increase in the number of pig iron and steel producers coming within the scope of the contested directive following the enlargement of the European Union since 2004 and to the possibility that other European countries with a steel industry may join the Union in the future. Furthermore, the applicant has failed to demonstrate that, at the time of the entry into force of the contested directive, those pig iron and steel producers had particular characteristics which distinguished them from other producers or new entrants, for example the fact that they held earlier specific rights (see, to that effect, Case C‑125/06 P Commission v Infront WM [2008] ECR I‑1451, paragraphs 71 to 77). Even supposing that those producers held emission rights granted under Directive 96/61 (see paragraph 49 above), those alleged rights, far from being specific, or unique to the applicant, would have benefited in the same way all operators pursuing the activities listed in Annex I to the contested directive. Finally, the mere fact that, in the applicant’s view, entry on to the relevant market is possible only by means of acquisition of a producer which is already established on the market does not rule out the possibility that the identity of the producer or new entrant which buys it out may change and thus alter the composition of the group of producers at issue.

110 Consequently, the legal effects of the contested provisions, namely the obligations to have an emissions permit and to surrender allowances, penalties in the event of non-compliance with those obligations, and the alleged capping of allowances under Article 9 of the contested directive, affect the economic activity and legal position of the operators concerned by Annex I to the contested directive, including those in the pig iron and steel production sector, in the same way and by reason of an objectively determined situation. Those provisions are thus not capable of characterising the factual and legal situation of the applicant in comparison with those other operators and, consequently, of distinguishing it individually in the same way as an addressee, with the result that there is no need to examine whether those provisions are of direct concern to it.

111 Third, as regards the argument based on the applicant’s large size, its annual production volume and its individual economic and/or technological inability to reduce further its CO 2 emissions, it should be noted that the applicant fails to give any reasons why the pig iron and steel producers in competition with it are not exposed to adaptation problems and to similar difficulties as regards their size, volume of production and their efforts to reduce emissions. A smaller operator with a lower pig iron or steel production than the applicant will inevitably have a lower quantity of allowances, with the result that, proportionately, its economic and/or technological difficulties in reducing its emissions should be comparable to those of the applicant. In accordance with Annex I to the contested directive, the obligations resulting from the contested provisions apply in a uniform and general manner to all installation operators whose production exceeds the threshold set out therein, irrespective of their size. In addition, the extent of those obligations depends solely on the quantity of greenhouse gas emissions which, in the absence of proof of the contrary, is likely to increase with the size and production capacity of the installation at issue, in such a way that all operators concerned are in a comparable situation (see, to that effect, Arcelor Atlantique et Lorraine and Others, cited in paragraph 42 above, paragraph 34). Therefore, the applicant cannot reasonably claim that it is particularly affected in such a way as to distinguish it individually in the same manner as an addressee and, consequently, there is no need to examine whether it is directly concerned in that regard.

112 Fourth, the applicant has failed sufficiently to demonstrate that its alleged ‘unique lock-in situation’, in particular as a result of the restructuring of its group, was capable of distinguishing it individually from all other operators. Even if it were the only pig iron and steel producer established in the internal market which had undertaken such restructuring, the applicant has not shown that there were no other producers in the other sectors covered by Annex I to the contested directive which were affected by similar consequences following the implementation of that directive on the ground that they undertook or abandoned similar steps. In that regard, the applicant’s claims that the undertakings in the other sectors covered by Annex I to the contested directive cannot have been exposed to the same difficulties as itself are too vague and hypothetical for it to be ruled out that other producers were affected in a similar way, for example, those in the energy sector, which, following the liberalisation at Community level, was subject to significant cross‑border restructuring.

113 In any event, the applicant has not proved that the fact that it was affected by reason of its alleged ‘unique lock-in situation’ was due specifically to the legal effects of the contested provisions in such a way as to concern it directly. According to the applicant’s own statements, that situation essentially results, first, from the alleged lack of emission allowances allocated free of charge by the national authorities which make it a ‘net buyer of allowances’, second, from the possible increase in the price of allowances available on the exchange market, or the high level of that price, and, third, from the impossibility for it to transfer, within the internal market, allowances allocated to installations earmarked for closure to other installations in which it plans to increase production capacity.

114 Similarly, even supposing that the alleged restructuring is a characteristic particular to the applicant, it must be noted that the alleged ‘unique lock-in situation’ resulting from the aspects described in paragraph 112 above is not attributable to the obligation to be in possession of an emissions permit under Article 4 of the contested directive, or to the obligation to surrender under Article 12(3), in conjunction with Article 6(2)(e), or to the penalties provided for in Article 16(2), (3) and (4) of that directive, but, if that situation were proved to exist, is the consequence of the implementation by the Member States of their NAPs and the relevant legislation. Under Article 9(1) and Article 11(1) of the contested directive, the Member States have a broad discretion both as regards the allocation of allowance quotas to various industrial sectors and the issue of allowances to, or withdrawal from, individual operators, including in the case of closure of an installation (see, to that effect, Case T‑374/04 Germany v Commission [2007] ECR II‑4431, paragraphs 102 to 106).

115 Article 4 of the contested directive does nothing more than subject all operators which emit greenhouse gases to an obligation to obtain an emissions permit, but does not specify the conditions or specific rules for the allocation or withdrawal of emission allowances, which is the case in certain Member States. The applicant claims that such conditions and rules are at the origin of its restructuring problems. That reasoning is applied by analogy to the obligation to surrender laid down in Article 12(3) of the contested directive, in conjunction with Article 6(2)(e), and to the penalties provided for in Article 16(2), (3) and (4) of that directive, since the applicant has not explained why it considers that those provisions are in some way linked to its difficulties. Accordingly, the possible harm suffered by the applicant because of the price increase for the acquisition of allowances and/or a possible loss of allowances, even though it may be substantial and greater than for other operators, following the closure of one of its installations or the withdrawal of the allowances allocated to that installation by the national authorities, cannot be attributed to the obligations resulting from those provisions in order to enable the applicant to base its claim that it is directly concerned within the meaning of the fourth paragraph of Article 230 EC.

116 Finally, in so far as the applicant also challenges Article 9 of the contested directive, read in conjunction with criterion 1 in Annex III thereto, on the ground that it imposes on the Member States an ‘absolute cap on allowances’, suffice it to point out that, even if that argument were well founded, such a cap would not directly affect the applicant for the purposes of the fourth paragraph of Article 230 EC since it would not make it possible to identify, even approximately, the number of allowances which are to be allocated by the national authorities to the various industrial sectors and even less those to individual operators. That finding is confirmed by the fact that, throughout the proceedings, the applicant has been unable to specify or anticipate, with regard to the contested directive and Decision 2002/358, either the quantity of allowances which the Member States will allocate it free of charge for its production installations established in the internal market or the extent of the possible burden which it would have to assume in the event that those allowances prove to be insufficient.

117 Consequently, the applicant has not established that it was directly and individually concerned by the contested provisions by reason of its alleged ‘unique lock-in situation’ resulting, in particular, from the cross‑border restructuring of its group.

118 Fifth, as regards the long-term agreements for the supply of gas which the applicant claims to have concluded with several power stations prior to the entry into force of the contested directive, those agreements are also not capable of distinguishing the applicant individually in relation to the contested provisions. Those provisions govern, in a general and abstract manner, the obligations of operators which are subject to the allowance trading scheme, but do not specify the conditions or specific rules for the allocation or withdrawal of emission allowances by the Member States (see paragraphs 112 to 116 above). It follows, in any event, that the possibility that the performance of those gas supply agreements may be affected can result only from national rules governing the allocation of allowances, with the result that, in this regard, the applicant also has no basis on which to support its claim that it is directly concerned. In addition, as submitted by the Council, the applicant itself states that those gas supply agreements concern, at least in part, power stations belonging to its own group of undertakings. Thus, in so far as the activity of those power stations falls within the scope of Annex I to the contested directive because it exceeds the production volume set out therein, the applicant will, on the basis of the NAPs and national rules applicable, necessarily be in possession of emission allowances for the combustion of the gases at issue. Finally, in spite of the fact that energy production constitutes, in principle, an activity covered by Annex I to the contested directive, the applicant has neither specified the extent to which those gas supply agreements link it to third party power stations, nor indicated whether the latter were in a position to obtain emissions allowances of their own accord or needed them because they were included in that annex, nor explained under what circumstances a possible lack of allowances for those power stations affected the performance of those agreements. Accordingly, the conclusion must be that the applicant has not demonstrated that it was directly and individually concerned by the contested provisions on the basis that the performance of the long-term agreements for the supply of gas at issue was allegedly affected.

119 Sixth, as regards the applicant’s argument, which is very short on detail, that it participated in the decision-making procedure which led to the adoption of the contested directive, it should be noted that the fact that a person intervenes in one way or another in the procedure leading to the adoption of a Community measure may distinguish that person as an individual in relation to the measure in question only when the applicable Community law grants that person certain procedural guarantees. Except where there is an express provision to the contrary, neither the process of enacting measures of general application nor those measures themselves require, under the general principles of Community law, such as the right to a hearing, the participation of the persons affected as the interests of those persons are deemed to be represented by the political bodies called to adopt those measures. Consequently, in the absence of expressly guaranteed procedural rights, it would be contrary to the letter and spirit of Article 230 EC to allow any individual, simply because he has participated in the preparation of a measure of a legislative nature, subsequently to bring an action challenging that measure (see, to that effect, the order in Case T‑369/03 Arizona Chemical and Others v Commission [2005] ECR II‑5839, paragraphs 72 and 73 and the case‑law cited therein).

120 In the present case, it must be noted, first, that the process of enacting and adopting the contested directive, under Article 175(1) EC and Article 251 EC, constituted a decision-making process involving the joint participation of the Council and the Parliament as the Community legislature and resulting in the adoption of a measure of general application. No form of intervention on the part of operators is foreseen in that context and, second, the applicant has neither claimed nor shown that it had procedural rights capable of establishing its standing to bring an action within the meaning of the case‑law cited in paragraph 116 above.

121 It follows that the applicant’s alleged participation in the decision‑making procedure which led to the adoption of the contested directive is not capable of distinguishing the applicant individually for the purposes of the fourth paragraph of Article 230 EC, without there being any need to examine whether it was directly affected in that regard.

122 It follows from all of the foregoing considerations that the applicant is not individually or directly concerned by the contested provisions within the meaning of the fourth paragraph of Article 230 EC and its application for annulment must therefore be declared inadmissible, without there being any need to examine whether the contested provisions can be severed or not from the contested directive as a whole.

123 This solution is, moreover, not brought into question by the fourth paragraph of Article 263 TFEU. As has been pointed out in paragraph 114 above, the Member States have a broad discretion with regard to implementation of the contested directive. For that reason, contrary to what the applicant contends, that directive cannot, in any event, be regarded as being a regulatory act which does not entail implementing measures w