Case C‑5/16

Republic of Poland

v

European Parliament and Council of the European Union

(Action for annulment — Decision (EU) 2015/1814 — Determination of legal basis — No taking into account of the effects of a measure — Article 192(1) TFEU — Article 192(2)(c) TFEU — Measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply — Principle of sincere cooperation — Article 15 TEU — Powers of the European Council — Principles of legal certainty and protection of legitimate expectations — Principle of proportionality — Impact assessment)

Summary — Judgment of the Court (Second Chamber), 21 June 2018

The choice of the legal basis for an EU measure must rest on objective factors amenable to judicial review, which include, inter alia, the aim and content of that measure. Given that, in order to know the real and specific effects of a legislative measure, it is necessary to analyse those effects after its entry into force, the legislature’s choice would have to be based on assumptions as to the likely impact of that measure, which, by their nature, are speculative and are in no way objective factors amenable to judicial review. Consequently, the assessment of the effect of an EU measure on a Member State’s energy policy is not a factor that must be assessed in addition to the aim and content of that act, or by derogation therefrom. (see paras 38, 41, 42)

Point (c) of the first subparagraph of Article 192(2) TFEU can form the legal basis of an EU measure only if it follows from the aim and content of that measure that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of the energy supply of that Member State. With regard to Decision 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme, it follows from both the aim and the content of that decision that the market stability reserve was designed as a tool seeking, in the first place, to remedy existing imbalances and, in the second place, to render that system more resistant to any future event on a sufficiently large scale as to disturb seriously the balance between the supply and demand of allowances. In essence, it is a one-off intervention on the part of the legislature for the purpose of correcting a structural weakness of the greenhouse gas emissions trading system. To that extent, the contested decision contributes to that scheme emitting a carbon price signal at EU level, which allows the Union to reach its goals in terms of emission reductions and logically involves an increase in the price of allowances in the future. However, it should be stated that those effects are only an indirect consequence of the close relationship between the contested decision and Directive 2003/87 establishing a scheme for greenhouse gas emission allowance trading within the Community. Consequently, it does not appear that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of the energy supply of that Member State, with the result that the choice of Article 192(1) TFEU as the legal basis of that decision would be erroneous in view of the legal basis provided by point (c) of the first subparagraph of Article 192(2) TFEU. (see paras 46, 60-62, 67, 68)

Article 15(1) TEU defines the European Council’s task as being to provide the Union with the necessary impetus for its development and define the general political directions and priorities thereof, and specifies that it shall not exercise legislative functions. The Parliament and Council’s legislative power, conferred in Article 14(1) TEU and Article 16(1) TEU, which reflects the principle of conferred powers, enshrined in Article 13(2) TEU, and, more broadly, the principle of institutional balance, characteristic of the institutional structure of the European Union, means, however, that it is for those institutions alone to decide the content of a legislative measure. Acknowledging that the European Council has a power to issue directions to those institutions would lead, first, to the role of the Parliament and the Council being considered to be no more than rubber stamping the conclusions of the European Council and, second, to the European Council being given the power to interfere directly in the legislative sphere, contrary to the principle of the conferral of powers laid down in Article 13(2) TEU. (see paras 83-85)

Sincere cooperation between EU institutions is to be exercised within the limits of the powers granted by the Treaties to each institution. The obligation arising under that provision is therefore not capable of modifying those powers. Consequently, such cooperation cannot undermine one EU institution’s capacity to exercise its powers to the benefit of another institution. (see para. 90)

See the text of the decision. (see para. 100)

No guarantee was given, either on the adoption of Directive 2003/87 establishing a scheme for greenhouse gas emission allowance trading within the Community or on the adoption of Directive 2009/29, which amended it, that the operation of that system as originally described would remain unchanged or could be modified only at the end of a trading period. Not only can an interpretation of Directive 2003/87 that the legislature could change the rules relating to that system only at the end of a trading period not be justified on the basis of the directive itself, but it would also be contrary to the Court’s case-law on that system. (see paras 123, 128)

See the text of the decision.

(see paras 150-153, 167, 169, 170)