Billerud Karlsborg AB and Billerud Skärblacka AB v Naturvårdsverket.
Date: 2013-10-17
25. It follows from the very letter of Directive 2003/87 that the obligation to surrender allowances equal to the emissions for the preceding year by 30 April of the current year in order to have them cancelled applies with particular force. Referred to obligatorily in the greenhouse gas emissions permit under Article 6(2)(e) and formulated unequivocally in Article 12(3), that obligation is the only one for which Directive 2003/87 itself provides for a specific sanction, whereas the sanction for any other conduct contrary to its provisions is, under Article 16, left to the discretion of the Member States. The key role of the allowance surrender process in the scheme of the directive is also apparent from the fact that being ordered to pay the penalty does not release the operator from the obligation to surrender the corresponding allowances during the surrender process the following year. The only flexibility allowed under Directive 2003/87 with respect to the penalty concerns its level, which is lowered from EUR 100 to EUR 40 for the ‘learning’ period for the scheme, that is to say, 2005 - 2007.
26. Furthermore, it should be borne in mind that while the ultimate objective of the allowance trading scheme is the protection of the environment by means of a reduction in greenhouse gas emissions, the scheme does not of itself reduce those emissions but encourages and promotes the pursuit of the lowest cost of achieving a given amount of emissions reductions. The benefit for the environment depends on the stringency of the total quantity of allowances allocated, which represents the overall limit on emissions allowed by the scheme (Case C‑127/07 Arcelor Atlantique and Lorraine and Others  [2008] ECR I‑9895, paragraph 31).
27. The overall scheme of the directive is thus based on the strict accounting of the issue, holding, transfer and cancellation of allowances, the framework for which is provided for by Article 19 thereof and requires the establishment of a system of standardised registries through a separate Commission regulation. That accurate accounting is inherent in the very purpose of the directive, consisting in the establishment of a Community scheme for greenhouse gas emission allowance trading, which aims to reduce greenhouse gas emissions in the atmosphere to a level that prevents dangerous anthropogenic interference with the climate system, with the ultimate objective of protection of the environment (see Arcelor Atlantique and Lorraine and Others , paragraph 29). As observed by the Commission, in introducing itself a predefined penalty, the Community legislature wished to shield the allowance trading scheme from distortions of competition resulting from market manipulations.
31. Even in the absence of specific provisions, however, recognition of circumstances constituting force majeure  presupposes that the external cause relied on by individuals has consequences which are inexorable and inevitable to the point of making it objectively impossible for the persons concerned to comply with their obligations (see, inter alia, Joined Cases 154/78, 205/78, 206/78, 226/78 to 228/78, 263/78 and 264/78, 39, 31/79, 83/79 and 85/79 Ferriera Valsabbia and Others v Commission  [1980] ECR 907, paragraph 140). Consequently, it is for the referring court to determine whether the Billerud companies, despite all due care having been exercised in order to comply with time limits, were faced with unusual and unforeseeable circumstances which were beyond their control (see Case C‑99/12 Eurofit [2013] ECR I‑0000, paragraph 31) and went beyond mere internal breakdown.
34. It should be borne in mind in that regard that the principle of proportionality is one of the general principles of European Union law and requires that measures implemented through European Union law provisions be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not go beyond what is necessary to achieve them (Case C‑58/08 Vodafone and Others  [2010] ECR I‑4999, paragraph 51, and the case-law cited).
35. With regard to judicial review of those conditions, however, the European Union legislature must be allowed a broad discretion when it is asked to intervene in an area which entails political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. In its judicial review of the exercise of such powers, the Court cannot substitute its own assessment for that of the European Union legislature. It could, at most, find fault with its legislative choice only if it appeared manifestly incorrect or if the resultant disadvantages for certain economic operators were wholly disproportionate to the advantages otherwise offered (see, inter alia, Case C‑84/94 United Kingdom  v Council  [1996] ECR I‑5755, paragraph 58; Case C‑233/94 Germany  v Parliament and Council  [1997] ECR I‑2405, paragraph 56; and Case C‑210/03 Swedish Match [2004] ECR I‑11893, paragraph 48).
36.  It is clear that the introduction of an EU-wide scheme for accounting and trading of carbon dioxide equivalent emission allowances was a legislative choice which translated a political orientation in a context of urgency in addressing serious environmental concerns, as evidenced by the Conclusions of the Council of the European Union of 8 March 2001, referred to in recital 1 in the preamble to Directive 2003/87. That legislative choice was, moreover, based on highly complex and lengthily debated economic and technical considerations, set out in Green Paper COM(2000) 87 of 8 March 2000. In order to contribute towards the fulfilment of their commitments by the European Union and its Member States under the Kyoto Protocol, the European Union legislature was thus led to consider itself the future, uncertain effects of its action (see, by analogy, Germany  v Parliament and Council , paragraph 55).
37. In addition, it should be recalled that the proportionality of a European Union measure cannot depend on retrospective assessment of its efficacy. Where, as in the present case, the European Union legislature has to assess the future effects of legislation to be enacted although those effects cannot be accurately foreseen, its assessment is open to criticism only if it appears manifestly incorrect in the light of the information available to it at the time of the adoption of the legislation in question (see, to that effect, Case C‑189/01 Jippes and Others [2001] ECR I‑5689, paragraph 84 and the case-law cited).