INEOS Köln GmbH v Bundesrepublik Deutschland.
Date: 2018-01-18
22


For the purpose of examining that question, it should be recalled, as a preliminary point, that Directive 2003/87 is intended to establish a scheme for greenhouse gas emission allowance trading which seeks to reduce those emissions into the atmosphere to a level that prevents dangerous anthropogenic interference with the climate and the ultimate objective of which is to protect the environment (see, inter alia, judgment of 8 March 2017, ArcelorMittal Rodange et Schifflange, C‑321/15, EU:C:2017:179, paragraph 24).
23


That scheme is based on an economic logic which encourages a participant in the scheme to emit quantities of greenhouse gases that are less than the allowances originally allocated to him, in order to sell the surplus to another participant who has emitted more than his allowance (see, inter alia, judgment of 8 March 2017, ArcelorMittal Rodange et Schifflange, C‑321/15, EU:C:2017:179, paragraph 22).
24


Directive 2003/87 therefore seeks to reduce, by 2020, the overall greenhouse gas emissions of the European Union by at least 20% in comparison with 1990 levels, in an economically efficient manner (judgment of 8 September 2016, E.ON Kraftwerke, C‑461/15, EU:C:2016:648, paragraph 23).
25


For that purpose, Article 10a of Directive 2003/87 provides, with regard to installations in certain sectors of activity, for the free allocation of emission allowances, the quantity of which, in accordance with paragraph 11 of that provision, is to decrease gradually over the period 2013 to 2020, in order to arrive at the complete abolition of free allowances in 2027 (see, to that effect, judgments of 8 September 2016, E.ON Kraftwerke, C‑461/15, EU:C:2016:648, paragraph 24, and of 26 October 2016, Yara Suomi and Others, C‑506/14, EU:C:2016:799, paragraph 46).
26


In accordance with Article 10a(1) of Directive 2003/87, the Commission determined, by way of Decision 2011/278, European Union-wide harmonised rules for the free allocation of emission allowances. Those harmonised rules give concrete expression to the essential requirement that distortions of competition in the internal market be kept to a minimum (judgment of 22 June 2016, DK Recycling und Roheisen v Commission, C‑540/14 P, EU:C:2016:469, paragraph 53).
27


It follows from Article 10a(2) of Directive 2003/87 that the Commission determines, in that context, benchmarks by sector or subsector (see, to that effect, judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 60).
28


As is evident from Article 10(1) and (2) of Decision 2011/278, by multiplying those benchmarks with the level of historical activity of each sub-installation, Member States are to determine the preliminary annual number of emission allowances to be allocated free of charge. To that end, they are required to distinguish, in accordance with Article 6 of that decision, the sub-installations based on their activity, in order to determine whether it is necessary to apply a ‘product benchmark’, a ‘heat benchmark’, a ‘fuel benchmark’ or a specific factor for ‘process emissions sub-installations’ (judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 61).
29


In that regard, the Court has already pointed out that the definitions, set out in Article 3 of Decision 2011/278, of product benchmark sub-installations, heat benchmark sub-installations, fuel benchmark sub-installations and process emissions sub-installations are mutually exclusive (judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 62).
30


According to recital 12 of Decision 2011/278, it is only in the case where deriving a product benchmark has not been feasible, but greenhouse gases eligible for the free allocation of emission allowances occur, that those allowances should be allocated on the basis of the three other so-called ‘fallback’ approaches, in accordance with the hierarchy thus determined, in order to maximise greenhouse gas emission reductions and energy savings for at least parts of the production processes concerned (see, to that effect, judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraphs 67 and 68).
31


Furthermore, a ‘process emissions sub-installation’ is qualified as such with regard solely to the generation of specific types of emissions referred to in Article 3(h)(i) to (vi) of Decision 2011/278 (judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 66).
35


In those circumstances, regard must, in accordance with settled case-law, be had to the general scheme of Directive 2003/87 and of Decision 2011/278, as well as to the objectives which they pursue (see, by analogy, inter alia, judgments of 27 June 2013, Malaysia Dairy Industries, C‑320/12, EU:C:2013:435, paragraph 26, and of 11 November 2015, Tecom Mican and Arias Domínguez, C‑223/14, EU:C:2015:744, paragraph 35 and the case-law cited).
36


With regard, in the first place, to the general scheme of Directive 2003/87 and of Decision 2011/278, it must be held from the outset that the taking into account of emissions stemming from the combustion of incompletely oxidised carbon comes, as is already evident from paragraphs 25 to 31 of the present judgment, within the framework of a specific regime for two reasons, since that taking into account occurs, first, for the purpose of the application of the transitional rules relating to the free allocation of emission allowances and, second, in respect of the final so-called ‘fallback’ option represented by process emissions. It follows that Article 3(h)(iv) of Decision 2011/278 cannot be interpreted broadly (see, by analogy, judgment of 7 April 2016, Holcim (Romania) v Commission, C‑556/14 P, not published, EU:C:2016:207, paragraph 48).
39


To that end, the Court has already held that the product benchmarks take account of the efficient energy recovery of waste gases as well as of the emissions stemming from the use of those gases and that, to that end, for the determination of the benchmark values for products the manufacture of which generates waste gases, the carbon content of those waste gases has been taken into account to a large extent (judgments of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 48, and of 26 October 2016, Yara Suomi and Others, C‑506/14, EU:C:2016:799, paragraph 40).
41


While those documents are not legally binding, they nonetheless constitute additional indications of such a kind as to clarify the general scheme of Directive 2003/87 and of Decision 2011/278 (see, to that effect, judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraphs 105 and 112).
43


With regard, in the second place, to the objectives pursued by that legislation, it must be observed that Article 10a(1) of Directive 2003/87 and Decision 2011/278 are intended, in the context of the attainment of the objectives referred to in paragraphs 22 to 24 of the present judgment, to encourage the reduction of greenhouse gas emissions and to improve energy efficiency by taking account of the most efficient techniques, including, in particular, the fullest energy recovery from gas waste, where such facilities are available and do not provide incentives to increase emissions (see, to that effect, judgment of 8 September 2016, Borealis and Others, C‑180/15, EU:C:2016:647, paragraph 102, and of 26 July 2017, ArcelorMittal Atlantique et Lorraine, C‑80/16, EU:C:2017:588, paragraph 47).
44


Indeed, as the Court has already noted, when waste gases are a by-product inevitably emitted during production, the recovery of those gases is, from both an economic and an ecological point of view, greatly more beneficial than flaring them off (see, to that effect, judgment of 26 July 2017, ArcelorMittal Atlantique et Lorraine, C‑80/16, EU:C:2017:588, paragraph 22).