Case T-27/07: Action brought on 7 February 2007 — US Steel Košice v Commission
Date: 2007-03-24
Institutions: Court of First Instance
Subjects: EU environmental policy, European Commission, Slovakia, action for annulment (EU), greenhouse gas, reduction of gas emissions, tradeable emission permit

24.3.2007

EN

Official Journal of the European Union

C 69/25

Pleas in law and main arguments

Action brought on 7 February 2007 — US Steel Košice v
Commission

The application lodged by Iride SpA and Iride Energia SpA (‘the
applicants’) concerns the Decision of 8 November 2006 by
which the Commission closed the proceeding initiated pursuant
to Article 88(2) EC to investigate the compatibility with Com-
munity law of a refund that Italy intends to grant to AEM
Torino for stranded costs in the energy sector (1).

The applicants claim that the Court of First Instance of the
European Communities should declare that the Decision is void
in so far as it classes as State aid the measures taken to reim-
burse AEM Torino in respect of the stranded costs incurred
during the liberalisation of the energy sector, and in so far as it
suspends payment of
the aid until such time as Italy has
provided the Commission with evidence that AEM Torino has
not received the aid declared to be unlawful and incompatible
with Decision 2003/193/EC concerning tax relief for former
municipalizzate [municipal administrative bodies] (‘the Tax Relief
Decision’), or with evidence that AEM Torino has reimbursed,
with interest, any such aid that it may have received.

The application is based inter alia on the following main pleas:

(a) The measure in question does not constitute State aid in
that it was not financed through the use of State resources
and does not accord the recipients gratuitous advantage.

(b) The judgment

in Deggendorf (2)

is not applicable in the
present case. The Commission has failed, in particular, to
show that the conditions that must be met — according to
the principles that may be extracted from Deggendorf — in
order for payment of the aid to be suspended, have in fact
been met. (In particular, the Commission has not shown the
potential cumulative effect of the new measures and the
earlier measures.)
In particular, the Commission has not
explained how it is possible that cumulative effects can arise
as a result of the aid which is the subject of the Tax Relief
Decision, and measures like the stranded costs, which are
designed merely to bring about equalisation, and thus the
effects of which are exhausted in the past, enabling the costs
incurred during the period when the market was regulated
to be amortised in a manner similar to the manner in which
the undertakings would have proceeded if the sector had
not been liberalised before those costs had been fully amor-
tised.

(1) OJ L 366, 21.12.2006, p. 62.
(2) Case C-355/95 TwD v Commission [1997] ECR I-2549.

(Case T-27/07)

(2007/C 69/54)

Language of the case: English

Parties

Applicant: US Steel Košice sro (Košice, Slovakia) (represented by:
E. Vermulst, lawyer, and C. Thomas, solicitor)

Defendant: Commission of the European Communities

Form of order sought

— Annul

the Commission decision of 29 November 2006
concerning the national allocation plan for the allocation of
greenhouse gas emission allowances notified by Slovakia in
accordance with Directive 2003/87/EC of
the European
Parliament and of the Council;

— order the Commission to pay the applicant's costs.

Pleas in law and main arguments

The applicant seeks the annulment of Commission decision of
29 November 2006 concerning the national allocation plan for
the allocation of greenhouse gas emission allowances for the
period 2008-2012 notified by Slovakia in accordance with
Directive 2003/87/EC (1).

In support of it's application, the applicant firstly alleges that
the contested decision infringes Title 4, point 2(a) of Annex XIV
to the Act of Accession 2003 (2) in that it incorrectly asserts
that the conditions in that provision are independent obligations
applying until 2009 regardless of whether Slovakia continues to
grant the applicant the tax exemption that Slovakia may apply
to the applicant until the end of the fiscal year 2009 notwith-
standing Article 87 and 88 EC. The applicant argues that,
accordingly, the decision is also contrary to criterion (4) of
Annex III to Directive 2003/87/EC, which provides that the
national allocation plan shall be consistent with other Com-
munity legislative and policy instruments.

the applicant submits that

the contested decision
Secondly,
infringes the principle of
legitimate expectations in that the
Commission at several occasion made the applicant expect that
the production limitations provided for in Title 4, point 2(a) of
Annex XIV to the Act of Accession would cease to apply once
the applicant no longer benefited from the tax exemption.

C 69/26

EN

Official Journal of the European Union

24.3.2007

Thirdly, the applicant contends that the contested decision is
unlawful because, instead of carrying out its limited functions
under Article 9(3) of Directive 2003/87/EC, the Commission
carried out an entirely independent calculation of the appro-
priate total emissions in Slovakia and imposed this on the
Slovak Republic. Thereby the Commission usurped the compe-
tence of the Member States under Articles 9 and 11 of Directive
2003/87/EC.

Fourthly, the applicant submits that the contested decision is
unlawful in that it was based on a rigid mathematical calcula-
tion which was imposed without public consultation and which
ignored known factors influencing emissions specific to Slovakia
in the period 2008-2012. The applicant finds that this approach
violated Article 9(1) and 11(2) of Directive 2003/87/EC,
criteria (1), (2) and (3) of Annex III to the said directive as well
as
legitimate expectations. The applicant
contends that insofar as the Commission possessed any margin
of appreciation, the Commission committed a manifest error in
that appreciation.

the principle of

the applicant claims that

Finally,
the contested decision is
vitiated by a misuse of powers as it was motivated by a desire to
achieve a scarcity of allowances as such in order to drive the
prices of allowances upwards.

(1) Directive 2003/87/EC 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 L 275, 2003, p. 32).

the European Parliament and of

(2) Act concerning the conditions of accession of the Czech Republic,
the Republic of Estonia, the Republic of Cyprus, the Republic of
Latvia,
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 L 236, 2003, p. 33).

the Republic of Lithuania,

the Republic of Hungary,

Defendant: Commission of the European Communities

Form of order sought

— Annul Article 1.2 of

the Commission's Decision of
29 November 2006 on the national plan for the allocation
of greenhouse gas emission allowances notified by Germany
pursuant to Directive 2003/87/EEC of the European Parlia-
ment and of the Council (document number unpublished),
insofar as it declares the allocation guarantees in respect of
the first action period described in Chapter 6.2 of Germany's
national allocation plan under the headings ‘Additional new
installations under Paragraph 11 of
the ZuG 2007’ and
‘Allocations under Paragraph 8 of the ZuG 2007’ to be
incompatible with Directive 2003/87/EC;

— annul Article 2.2 of that decision insofar as it issues to the
Federal Republic of Germany instructions for the application
of the allocation guarantees in respect of the first action
period described in Chapter 6.2 of Germany's national allo-
cation plan under the headings ‘Additional new installations
under Paragraph 11 of
the ZuG 2007’ and ‘Allocations
under Paragraph 8 of the ZuG 2007’ and in so doing also
requires the application of the same performance factor as
for other comparable existing installations;

— order the Commission to pay the costs.

Pleas in law and main arguments

Action brought on 7 February 2007 — Fels-Werke GmbH
and Others v Commission of the European Communities

(Case T-28/07)

(2007/C 69/55)

Language of the case: German

Parties

Applicants: Fels-Werke GmbH (Goslar, Germany), Saint-Gobain
Glass Deutschland GmbH (Aachen Germany) and Spenner
Zement GmbH & Co KG (Erwitte, Germany) (represented by:
H. Posser and S. Altenschmidt, lawyers)

challenge

applicants

the Commission's decision of
The
29 November 2006 concerning the national plan for the alloca-
tion of greenhouse gas emission allowances which Germany
notified in accordance with Directive 2003/87/EC of the Euro-
pean Parliament and of
In that decision the
Commission objects to certain aspects of the national allocation
plan for Germany on account of incompatibility with Annex III
to Directive 2003/87/EC (1).

the Council.

The applicants, operators of installations subject to compulsory
emissions
claim to be directly and individually
concerned by the contested decision.

trading,

In support of their action that they put forward four pleas:

First of all, they submit that on 29 November 2006 the defen-
dant was no longer entitled to reject the German national allo-
cation plan, as the mandatory time-limit
for doing so in
Article 9(3) of Directive 2003/87/EC had already expired.

Moreover, on the merits, the applicants complain of an incorrect
application of Article 9(3) in conjunction with the criteria of
Annex III to Directive 2003/87/EC. In their view, the allocation
guarantees criticised by the Commission for new installations
are not State aid within the meaning of Article 87(1) EC. No
unjustified preference was given to the installations in question.