Source: https://gavclaw.com/tag/trade-and-environment/
Timestamp: 2019-04-18 22:58:04+00:00

Document:
Essent 2.0. The CJEU surprisingly does distinguish. Support for renewable, ‘green’ energy not entirely carte blanche.
Excuse the attempt at pun in the title (which readers may have even missed. ‘Green’ v carte ‘Blanche’. It’s Thursday, and these are busy weeks). Apologies also to the readers who are new to the debate. The legality of support schemes for renewable energy EU law has occupied mine and others’ mind for a little while now. One may want to refer eg to my paper on the Vindkraft et al judgment or to various postings on this blog. Specifically, for the latter, my post on the AG’s Opinion in Essent 2.0, case C-492/14., judgment issued today.
Bot AG had opined, very very reluctantly, that the Court’s case-law meant that Flanders could indeed reserve the benefit of the free distribution of electricity produced from renewable energy sources solely to generating installations directly connected to the distribution systems located in Flanders, thereby excluding generating installations located in other Member States.
The Court itself has now distinguished its own case-law: the EU has not harmonised the national support schemes for green electricity; this means that it is possible in principle for Member States to limit access to such schemes to green electricity production located in their territory. However the Court’s sympathy is now limited to schemes that support producers only. Green energy support schemes, whose production costs seem to be still quite high as compared with the costs of electricity produced from non-renewable energy sources, are inherently designed in particular to foster, from a long-term perspective, investment in new installations, by giving producers certain guarantees about the future marketing of their green electricity (at 110, with reference to Vindkraft).
However it is not the purpose of the Flemish scheme to give direct support to producers of green electricity. Rather, the free distribution of green electricity constitutes a financial advantage conferred primarily on the supplier of such electricity, which may, in certain circumstances, depending notably on the sale price which the consumer is charged by the supplier for his electricity, to a certain extent and indirectly also benefit the consumer (at 112).
Such a support mechanism offers no certainty that the economic advantage thus obtained for suppliers will ultimately actually and essentially be required to benefit producers of green electricity, particularly the smallest local generating installations which the Flemish Region claims to have wanted to support, which are not both producers and suppliers (at 113).
The Court is not game to assist the AG with his call for an explicit recognition of the potential to use discriminatory measures within the context of mandatory requirements (the implications of Cassis de Dijon). That is a pity, but not a surprise.
Overall, the Court’s judgment is a welcome safeguard to its more open-ended sympathy for renewable energy support schemes. Those who challenge such schemes in future, know what to do. They need to show that there is no certainty that the economic advantage obtained for suppliers will ultimately actually and essentially be required to benefit producers of green electricity, as opposed to distributors or consumers.
Next-up: a reversal of T-351/02 Deutsche Bahn?
Ach no! CJEU distinguishes rather than extinguishes its Preussen Elektra case-law in Germany v EC. State aid for renewable energy.
The rather long judgment in T-47/15 Germany v Commission is neatly summarised by the CJEU here. I have reported before on both the State Aid and the free movement implications of the Court’s seminal findings in Preussen Elektra. In current case, the Court essentially upholds the EC’s finding of the more recent German regime amounting to illegal State aid and incompatibility with the Internal Market – in contrast with its earlier findings in Preussen Elektra.
Disappointingly, Preussen Elektra was distinguished rather than its merits called into question. Rather like Advocate-General Bot I stubbornly insist that Preussen Elektra is bad case-law and I continue to call upon the Court to scrap its findings in same.
‘We did not like it. Not one little bit!’ Bot AG reads Dr Seuss in Essent 2.0.
I was reminded of the line, reading Bot AG’s Opinion in Case C-492/14, ‘Essent 2.0’ (not yet available in English at the time of writing). In order to promote the generation of renewable energy, Flanders law makes transmission of electricity generated from renewable sources, free of charge. However this courtesy is limited to electricity generated in installations directly connected to the grid. Essent imports (a considerable part of) its green electricity from The Netherlands. It does not therefore enjoy free transmission.
Bot’s disapproval of trade restrictions like these is well established and has often been reported on this blog. The CJEU disagrees with its AG on many of the issues. I am in general of the same view as the AG. Mr Bot continues to find the Court’s case-law unconvincing and makes no attempt to hide it. He repeatedly mentions that he is duty-bound to apply Essent /Vindkraft without believing they are good law. It is with obvious regret that he Opines that given the Court’s stand in Essent /Vindkraft, he has no option but to propose that the Court find the Flemish regime acceptable.
The AG does however leave open a future window for change: in particular, if and when the secondary law regime on renewable energy specifically, and energy as a whole, is amended, one may be able to distinguish Essent /Vindkraft.
Bot also reminds us of the unclear position of environmental exceptions under Article 36 TFEU and the Rule of Reason. He calls upon the Court formally to acknowledge that the Cassis de Dijon distinction between the Rule of Reason and Article 36 (the former does not allow ‘distinctly applicable’ national measures (read’ discrimination) while the latter does) no longer exists.
I do not like judgment in Preussen Elektra. Or in Essent. Not one little bit. It discourages the creation of a true European energy market. Perhaps the Court will surprise us all in Essent 2.0 and will correct some of the damage it has done with its standing case-law on the matter.
Cheers to that! The CJEU on excise duties, alcohol, packaging and regulatory autonomy in Valev Visnapuu.
Postscript 10 December 2015 For a similar exercise, see Sharpston AG in C-472/14 Canadian Oil.
Less is sometimes more so I shall not attempt to summarise all issues in Case C-198/14 Valev Visnapuu. The case makes for sometimes condensed reading however it perfectly illustrates the way to go about dealing with obstacles to trade put in place for environmental, public health or, as in this case, both reasons.
Mr Visnapuu essentially forum shops Estonia’s lower prices on alcohol by offering Finnish clients home delivery of alcoholic beverages purchased there. No declaration of import is made to Finish customs and excise, thereby circumventing (accusation of course is that this is illegal) a variety of excise duties imposed for public health and environmental reasons, as well as a number of requirements relating to retail licenses and container requirements (essentially a deposit-return system) for beverages.
Confronted with a demand to settle various tax debts, as well as with a suspended prison sentence, Mr Visnapuu turns to EU law as his defence in a criminal proceeding. The CJEU then had to settle a variety of classic trade and environment /public health questions: whether the packaging and packaging waste Directive is exhaustive on the issue of deposit-return system (answer: no and hence the system additionally needs to be assessed vis-a-vis EU primary law: Article 34 ff TFEU or Article 110 TFEU); whether in the context of that Directive excise duties on packaging may be imposed (yes) and packaging integrated into a functioning return system exempt (yes; in the absence of indications that imported systems are less likely to enjoy the exemption); whether the relevant excise duties fall under Article 34 ff TFEU or Article 110 TFEU (answer: it is part of an internal system of taxation hence needs to be judged vis-a-vis Article 110 TFEU); and finally whether the retail licence requirement needs to be judged viz Article 34 or Article 37 TFEU (answer: mixed, given the various requirements at stake). Final judgment on proportionality is down to the Finnish courts.
Readers in need of a tipple would be advised to postpone until after reading the judgment. Again though the case shows that if one keeps a clear head, classic structures of applying EU law go a long way in untangling even complex matters of law and fact.

References: CJEU 
 CJEU 
 CJEU 
 CJEU 
 CJEU 
 CJEU